The Penny Paradox

“Isn’t a song worth more than a penny?”

By Neil Portnow

This is the question I posed to the nearly 27 million viewers of the 58th Annual GRAMMYs on Feb. 15 as I spoke about the rate at which music creators are compensated by streaming services and other digital distribution platforms. With GRAMMY-winning hip-hop artist Common and 12-year-old GRAMMY-nominated jazz pianist Joey Alexander by my side as just two examples of the breadth of artistry represented by The Recording Academy, I wanted to drive home the fact that streaming services offer insufficient returns to those who make the music at the core of their businesses.

To clarify: Streaming services offer a new way for creators to reach their audience and for consumers to listen to the music they want to hear. But streaming services, which earn billions through advertising and subscription fees, do not fairly compensate creators for use of their work. As I noted during my remarks, many music lovers have yet to grasp this perplexing reality: When they stream a song, all the people who created that music collectively get paid a fraction of a penny. That fraction of a penny gets slightly larger when the listener pays to subscribe to the service — a proposed 0.0022 cents per stream for 2016 versus 0.0017 cents from the free tier on Pandora, for example.

This is more than unfair, it’s unjust. How can a piece of music — which can take many people to create, perform and record, which provides so much pleasure and enjoyment, which can inspire, motivate and heal listeners — return mere fractions of a penny to its creators? There is a paradox here. No other professional endeavor in this country returns so little in compensation in exchange for so much.

The good news is we can do something about it. When we support music makers through music purchases, subscribing to paid streaming services and buying concert tickets, we contribute positively to the economy that keeps music creators creating. Subscribing to a paid music service — rather than using a service’s free tier — makes a small but significant difference.

These actions alone don’t go far enough to address the issue of pay inequity for creators. We must join together — creative professionals with the public at large — to ask Congress to modify the legislation that dictates how much music creators are paid in royalties for their contributions.

Streaming services themselves are not the enemy, nor is digital technology. Music creators love and embrace the innovations that technology provides. Thanks to technological advances, music fans now have a wealth of ways to enjoy music, and are able to listen to whatever they want wherever they are. The ready access to music through digital platforms has launched numerous emerging creators, extended the popularity of existing performers and revitalized the careers of many of our legacy artists.

We can embrace these new platforms, yet also demand that technology not diminish the value of music in our society or economy. As Common noted in our telecast presentation, there are thousands of musicians, songwriters, producers, engineers, and other music professionals dedicating their lives to making great music. They deserve to make a living so that they can continue to create art the world can enjoy, and become the standard-bearers for a profession the next generation of creators can emulate. Our audience agreed, as the #SupportMusic hashtag we promoted became one of the top trending items on Twitter during the GRAMMY telecast.

We all know a song is worth more than a penny. If you love music, I hope you will join me by asking Congress to act now to pass pro-music creator legislation and by spreading the #SupportMusic message everywhere.

The Recording Academy’s Advocacy & Public Policy office in Washington, D.C., serves as policymakers’ go-to representative of the collective world of recording professionals — performers, songwriters and studio professionals.

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