A fast-growing sector
According to the BPI, “income from music streaming services such as Spotify and Deezer constituted the fastest-growing sector in the UK record industry trade revenues in 2013”.
Most of the record label costs in the pre digital era (manufacturing, storage, distribution) are no longer applicable to digital sales and streaming. It is therefore hugely unfair that many labels are still paying a royalty based on a physical sale. The MU will continue to lobby for a 50-50 split for digital on behalf of its members.
John Smith, MU General Secretary
Streaming has changed the way in which millions of consumers access and organise their music, but given its rapid evolution the rules and regulations governing it are increasingly open to discussion and revision. The Musicians’ Union is involved in such discussions on behalf of its members.
How do they work out payment?
Streaming royalties are based on the number of times a track is played, and those artists whose work is streamed the most receive a larger portion of a service’s overall revenue. This means that if a user pays a subscription fee, that money isn’t directly distributed solely to the artists they listen to, but is rather paid out across all artists whose work is streamed by users of that service.
In this way, streaming royalties differ significantly from digital downloads.
The royalty rates and the manner in which they are calculated and paid out differ from service to service, and it’s difficult to specify exactly what you might receive from a stream of your work. Spotify, for examples, uses a formula to calculate royalties owed, and it can take 200 streams of a song to generate the same amount of money as a download royalty - see Spotify Explained for further details.
Hopefully artist royalities from streaming will increase as the streaming sector becomes ever more popular.
Check your contract
If you are signed to a label, check the royalty rate or percentage split set out in your recording contract.
It is likley that you will be getting the same split as for physical sales.
We believe this is unfair and along with the recently formed Artists, Managers and Performers’ Alliance (AMP) we are arguing that a 50/50 split (in line with licensing agreements) would be fairer when it comes to streaming.