How the streaming-music boom is screwing over recording artists

$0.000014 per song? Sign me up!

Musician David Lowrey, formerly of the bands Cracker and Camper Van Beethoven, has been on the warpath against the modern music industry – that of Spotify, Pandora and iTunes – for a while now. His blog, the Trichordist, catalogues the exploitation of artists by the new overlords, and acts as a call to arms.

But sometimes, that exploitation is less severe than it looks on first glance.

Yesterday, Lowrey posted a piece titled "My Song Got Played On Pandora 1 Million Times and All I Got Was $16.89, Less Than What I Make From a Single T-Shirt Sale!". It recounts Lowrey's quarterly earnings for the song "Low", a 1993 hit by Cracker which has had an unexpected renaissance due to being featured in the Emma Watson film The Perks of Being a Wallflower.

From Sirius, 179 plays netted him $181.94; FM/AM radio paid him $1373.78 for 18,797 plays; Spotify gave him $12.05 for 116,260 plays; YouTube gave him $1.95 for 152,900 plays; and Pandora paid $16.89 for 1,159,000 plays.

That's a massive difference for Pandora, and it's no wonder that Lowrey writes angrily that:

Right now Pandora plays one minute of commercials an hour on their free service. Here’s an idea! Play two minutes of commercials and double your revenue!

But the story is actually more complicated than that. For one thing, as Lowrey writes, he only owns 40 per cent of "Low", so the numbers are artificially, er, not-high. For another, the royalties schemes Lowrey is discussing only cover songwriting credits. The performance royalties come through a different channel, and can be quite a bit higher.

But the most important difference is that, although all those services are technically "radio" – which is why they are covered by blanket licensing schemes – they are used in very different ways.

Take a look at the price per play:

Sirius 101.6424
FM Radio 7.3085
Spotify 0.0104
Pandora 0.0014
YouTube 0.0012
Service Price per play (¢)

That runs the gamut alright; but there's three clear categories of service in there. The top end plays the same song to thousands of people at a time. Assuming the average commercial radio station has 5,000 listeners, then the price per listener is actually better than it is on Spotify. Sirius pays much more, but it's also national; and so requiring 73,000 listeners to equal Pandora's price-per-user isn't that big of a deal.

The next most valuable is Spotify. That only plays to one user at a time (theoretically), but lets them choose what they can hear. That leaves it more likely to cannibalise record sales, but also offers the chance for an artist to earn more from their die-hard fans.

After that comes Pandora, which is a real internet-radio service; you can't choose what songs play, nor can you skip through too many you don't like. You can, however, adjust the playlist by giving it an artist or genre to focus on, and it will play things like that.

With all of that considered, it's pretty clear who the real rip-off is: not Pandora, but YouTube. It pays less per play than Pandora, even though it lets you pre-select the songs that will be played. And if you spend enough time with children, you'll know that it's perfectly possible to use YouTube as a jukebox, with judicious use of the playlist function.

But the real problem for artists like Lowrey isn't really the exploitation by the music services at all. Instead, it's that it's getting ever harder to get the millions of listeners required to make a living. To get $1,400 for one song on terrestrial radio, Lowrey probably had to win over ten, maybe twenty people who set the playlists for nearly every commercial radio station in the country. To get that much from Spotify, he would have to get 100,000,000 plays – and even if people love the song, that still requires convincing a good million people to click play.

The economics are against him on that one.

Sirius 101.6424
FM Radio 7.3085
Spotify 0.0104
Pandora 0.0014
YouTube 0.0012
Service Price per play (¢)

 

Photograph: Spotify

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Former Irish premier John Bruton on Brexit: "Britain should pay for our border checks"

The former Taoiseach says Brexit has been interpreted as "a profoundly unfriendly act"

At Kapıkule, on the Turkish border with Bulgaria, the queue of lorries awaiting clearance to enter European Union territory can extend as long as 17km. Despite Turkey’s customs union for goods with the bloc, hauliers can spend up to 30 hours clearing a series of demanding administrative hoops. This is the nightmare keeping former Irish premier John Bruton up at night. Only this time, it's the post-Brexit border between Northern Ireland and the Republic, and it's much, much worse.   

Bruton (pictured below), Taoiseach between 1994 and 1997, is an ardent pro-European and was historically so sympathetic to Britain that, while in office, he was pilloried as "John Unionist" by his rivals. But he believes, should she continue her push for a hard Brexit, that Theresa May's promise for a “seamless, frictionless border” is unattainable. 

"A good example of the sort of thing that might arise is what’s happening on the Turkish-Bulgarian border," the former leader of Ireland's centre-right Fine Gael party told me. “The situation would be more severe in Ireland, because the UK proposes to leave the customs union as well."

The outlook for Ireland looks grim – and a world away from the dynamism of the Celtic Tiger days Bruton’s coalition government helped usher in. “There will be all sorts of problems," he said. "Separate permits for truck drivers operating across two jurisdictions, people having to pay for the right to use foreign roads, and a whole range of other issues.” 

Last week, an anti-Brexit protest on the border in Killeen, County Louth, saw mock customs checks bring traffic to a near standstill. But, so far, the discussion around what the future looks like for the 260 border crossings has focused predominantly on its potential effects on Ulster’s fragile peace. Last week Bruton’s successor as Taoiseach, Bertie Ahern, warned “any sort of physical border” would be “bad for the peace process”. 

Bruton does not disagree, and is concerned by what the UK’s withdrawal from the European Convention on Human Rights might mean for the Good Friday Agreement. But he believes the preoccupation with the legacy of violence has distracted British policymakers from the potentially devastating economic impact of Brexit. “I don’t believe that any serious thought was given to the wider impact on the economy of the two islands as a whole," he said. 

The collapse in the pound has already hit Irish exporters, for whom British sales are worth £15bn. Businesses that work across the border could yet face the crippling expense of duplicating their operations after the UK leaves the customs union and single market. This, he says, will “radically disturb” Ireland’s agriculture and food-processing industries – 55 per cent of whose products are sold to the UK. A transitional deal will "anaesthetise" people to the real impact, he says, but when it comes, it will be a more seismic change than many in London are expecting. He even believes it would be “logical” for the UK to cover the Irish government’s costs as it builds new infrastructure and employs new customs officials to deal with the new reality.

Despite his past support for Britain, the government's push for a hard Brexit has clearly tested Bruton's patience. “We’re attempting to unravel more than 40 years of joint work, joint rule-making, to create the largest multinational market in the world," he said. It is not just Bruton who is frustrated. The British decision to "tear that up", he said, "is regarded, particularly by people in Ireland, as a profoundly unfriendly act towards neighbours".

Nor does he think Leave campaigners, among them the former Northern Ireland secretary Theresa Villiers, gave due attention to the issue during the campaign. “The assurances that were given were of the nature of: ‘Well, it’ll be alright on the night!’," he said. "As if the Brexit advocates were in a position to give any assurances on that point.” 

Indeed, some of the more blimpish elements of the British right believe Ireland, wedded to its low corporate tax rates and east-west trade, would sooner follow its neighbour out of the EU than endure the disruption. Recent polling shows they are likely mistaken: some 80 per cent of Irish voters say they would vote to remain in an EU referendum.

Irexit remains a fringe cause and Bruton believes, post-Brexit, Dublin will have no choice but to align itself more closely with the EU27. “The UK is walking away,” he said. “This shift has been imposed upon us by our neighbour. Ireland will have to do the best it can: any EU without Britain is a more difficult EU for Ireland.” 

May, he says, has exacerbated those difficulties. Her appointment of her ally James Brokenshire as secretary of state for Northern Ireland was interpreted as a sign she understood the role’s strategic importance. But Bruton doubts Ireland has figured much in her biggest decisions on Brexit: “I don’t think serious thought was given to this before her conference speech, which insisted on immigration controls and on no jurisdiction for the European Court of Justice. Those two decisions essentially removed the possibility for Ireland and Britain to work together as part of the EEA or customs union – and were not even necessitated by the referendum decision.”

There are several avenues for Britain if it wants to avert the “voluntary injury” it looks set to inflict to Ireland’s economy and its own. One, which Bruton concedes is unlikely, is staying in the single market. He dismisses as “fanciful” the suggestions that Northern Ireland alone could negotiate European Economic Area membership, while a poll on Irish reunification is "only marginally" more likely. 

The other is a variation on the Remoaners’ favourite - a second referendum should Britain look set to crash out on World Trade Organisation terms without a satisfactory deal. “I don’t think a second referendum is going to be accepted by anybody at this stage. It is going to take a number of years,” he said. “I would like to see the negotiation proceed and for the European Union to keep the option of UK membership on 2015 terms on the table. It would be the best available alternative to an agreed outcome.” 

As things stand, however, Bruton is unambiguous. Brexit means the Northern Irish border will change for the worse. “That’s just inherent in the decision the UK electorate was invited to take, and took – or rather, the UK government took in interpreting the referendum.”