Jay-Z and co. have just launched Tidal, a streaming service whose avowed aim is to address a widely perceived and commonly-cited problem: that musicians aren’t being paid fairly for streams of their songs.
At the same time, a data journalist has published an infographic showing how much musicians actually make from streams of their music, compared to how much they used to make from CD sales.
This seems like as good a time as any to try to address this question with some cold, hard facts:
Has streaming meant artists get paid less for their music?
In amongst the many details of the infographic (included in full below), there are a few salient figures that let us answer this question with some simple maths.
Price of an album on CD = $12.00
Artist revenue from selling a single album on CD = $1.20
After the label, the distributor and the retailer took their cut, an artist could expect to make $1.20 from selling an album on CD.
Let’s assume there are 10 tracks on an album — seems like a fair average. So:
Artist revenue from selling a single track on a CD = $0.12
So far so good. In the 90s, we can assume that a musician would make $0.12 for every track of theirs that someone bought as part of an album.
Now, let’s look at streaming:
Artist revenue from a single Spotify stream = $0.0011
(This is less than Spotify claims it pays artists, but it’s the figure that the author of the infographic thinks is most reliable.)
This is where the maths comes in. An artist gets $0.12 per track bought on CD, and $0.0011 per track streamed.
0.12 / 0.0011 = 109
109 Spotify streams = 1 track purchase
It takes 109 Spotify streams for an artist to generate the same revenue they’d get by selling that track on CD.
So are artists making less money per track?
This question can be rephrased in a very simple way:
When you bought a CD in the 90s, how many times would you listen to a particular track over the course of your life?
If the answer is 109 or greater, then artists are making just as much money per track as they used to.
So that’s the question to ask yourselves: how much did you used to listen to the tracks you bought? And I reckon I can confidently say that I listened to the songs I bought in the 90s — at least the best songs, the ones I bought the album for — more than 109 times.
So no — by this reckoning, artists don’t make any less per track than they used to.
So why do we feel like artists are making less money?
There’s a simple answer to this question: artists are making less money. But it’s got nothing to do with streaming revenues.
The reason artists are making less money is that consumers no longer have to buy albums full of tracks they don’t want just to get the ones they do.
In the 90s, if I wanted to buy the latest Oasis song, I had to go out and get the entire album. This bundling up of tracks into albums was bad for consumers but great for artists and labels — people were forced into paying for a load of stuff they didn’t want.
Now, we just play the tracks we want to listen to — so artists and labels don’t make nearly as much money on the filler that continues to make up the lion’s share of many albums.
So yes, artists are making less money. But it’s a fairer system for everyone — artists are finally being paid according to what people actually want to listen to.
And no, Jay-Z — it looks like artists aren’t being paid any less per track than they used to be.
Here’s that infographic in full: