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.

Photo: Getty
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The Conservative-DUP deal is great news for the DUP, but bad news for Theresa May

The DUP has secured a 10 per cent increase in Northern Ireland's budget in return for propping up the Prime Minister.

Well, that’s that then. Theresa May has reached an accord with the Democratic Unionist Party to keep herself in office. Among the items: the triple lock on pensions will remain in place, and the winter fuel allowance will not be means-tested across the United Kingdom. In addition, the DUP have bagged an extra £1bn of spending for Northern Ireland, which will go on schools, hospitals and roads. That’s more than a five per cent increase in Northern Ireland’s budget, which in 2016-7 was just £9.8bn.

The most politically significant item will be the extension of the military covenant – the government’s agreement to look after veterans of war and their families – to Northern Ireland. Although the price tag is small, extending priority access to healthcare to veterans is particularly contentious in Northern Ireland, where they have served not just overseas but in Northern Ireland itself. Sensitivities about the role of the Armed Forces in the Troubles were why the Labour government of Tony Blair did not include Northern Ireland in the covenant in 2000, when elements of it were first codified.

It gives an opportunity for the SNP…

Gina Miller, whose court judgement successfully forced the government into holding a vote on triggering Article 50, has claimed that an increase in spending in Northern Ireland will automatically entail spending increases in Wales and Scotland thanks to the Barnett formula. This allocates funding for Wales, Scotland and Northern Ireland based on spending in England or on GB-wide schemes.

However, this is incorrect. The Barnett formula has no legal force, and, in any case, is calculated using England as a baseline. However, that won’t stop the SNP MPs making political hay with the issue, particularly as “the Vow” – the last minute promise by the three Unionist party leaders during the 2014 independence referendum – promised to codify the formula. They will argue this breaks the spirit, if not the letter of the vow. 

…and Welsh Labour

However, the SNP will have a direct opponent in Wales. The Welsh Labour party has long argued that the Barnett formula, devised in 1978, gives too little to Wales. They will take the accord with Northern Ireland as an opportunity to argue that the formula should be ripped up and renegotiated.

It risks toxifying the Tories further

The DUP’s socially conservative positions, though they put them on the same side as their voters, are anathema to many voters in England, Scotland and Wales. Although the DUP’s positions on abortion and equal marriage will not be brought to bear on rUK, the association could leave a bad taste in the mouth for voters considering a Conservative vote next time. Added to that, the bumper increase in spending in Northern Ireland will make it even harder to win support for continuing cuts in the rest of the United Kingdom.

All of which is moot if the Conservatives U-Turn on austerity

Of course, all of these problems will fade if the Conservatives further loosen their deficit target, as they did last year. Turning on the spending taps in England, Scotland and Wales is probably their last, best chance of turning around the grim political picture.

It’s a remarkable coup for Arlene Foster

The agreement, which ticks a number of boxes for the DUP, caps off an astonishing reversal of fortunes for the DUP’s leader, Arlene Foster. The significant increase in spending in Northern Ireland – equivalent to the budget of the entirety of the United Kingdom going up by £70bn over two years  – is only the biggest ticket item. The extension of the military covenant to Northern Ireland appeals to two longstanding aims of the DUP. The first is to end “Northern Ireland exceptionalism” wherever possible, and the second is the red meat to their voters in offering better treatment to veterans.

It feels like a lifetime ago when you remember that in March 2017, Foster was a weakened figure having led the DUP into its worst election result since the creation of the devolved assembly at Stormont.

The election result, in which the DUP took the lion’s share of Westminster seats in Northern Ireland, is part of that. But so too are the series of canny moves made by Foster in the aftermath of her March disappointment. By attending Martin McGuinness’s funeral and striking a more consensual note on some issues, she has helped shed some of the blame for the collapse of power-sharing, and proven herself to be a tricky negotiator.

Conservatives are hoping it will be plain sailing for them, and the DUP from now on should take note. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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