Being a struggling musician has never been so hard as it is in the modern age. 21st century kids have grown up exposed to a plethora of new fangled technologies. With the progression of science (technological or not) it’s only natural that aspects of our social life and culture would change. Sadly, the music industry is one of the most prominent industries to have been hit by major change. The days of vinyls, CD sales and physically buying music are, generally, long gone. Independent record stores have fallen like dominoes, and now the same fate is befalling even the bigger chain music stores. Artists are turning increasingly to tours, merchandise and endorsements to make a living.
Nowadays, the trend is to download music – often, unfortunately, illegally and for free. Illegal music downloads, through file-sharing, has been around since the internet first became widely accessible. This has endangered the artists’ livelihood and, indeed, the livelihoods of everyone involved in music production. The implementation of stricter regulations has heralded some improvements, with an abundance of websites offering music downloads and streaming cheaply. These sites pay artists royalties per download or play. However, these payments are sometimes tiny – fractions of cents! – and only after an astronomical volume of plays can the artist secure his or her earnings. While the true earnings of musicians online can be a bit of a cloak-and-daggers situation, we’ve collected information on the five websites that are considered the worst when it comes to paying royalties to artists. We’ve listed the offenders from best of the worst to the worst of the worst, citing reported figures on artist pay outs per album download or song download / stream.
If you thought the musician’s lifestyle was all glam rock and roll, these figures will make you think twice.
5. Napster- $0.94 per album download
Let’s begin with the best of the worst: former music store/sharing service engine, Napster. In 1999, after coming to life, the plan (at least the original one) was to enable users to share MP3 files between them for free. After running into highly publicized copyright infringement issues, Napster reincarnated itself into a music store. Unfortunately, the service went bankrupt and was subsequently bought by Best Buy, before merging with music store Rhapsody in 2011. But we’ll talk about Rhapsody later.
Napster was accused by many artists of stealing royalties and being unfair to the artists. Black Keys member Patrick Carney even publically called Napster founder Sean Parker an “a**hole”. And, if we are honest with ourselves, the facts prove it. Before Napster disappeared, it was reported that the music download site paid the artist under $1 for a full album download. That seems so low as to amount to exploitation, but Napster probably reasoned that at least the artist is being paid something rather than – as was previously the case – nothing. Artists can seek some comfort in the fact that Napster, on its own, no longer exists.
4. ITunes- $0.09 Per Song
Second best on our list is the universally popular music and video store, iTunes. Originally called SoundJam MP by creator Bill Kincaid, it was re-baptized iTunes after being bought by Apple in 2001. The iTunes application, available across all Apple platforms and as a standalone player on most PCs, allows users to pay for and download a diverse range of online files, from music to apps to movies to podcasts. Of course, users can only play their downloads on the iTunes player. Recently, in order to compete with other streaming sites, iTunes Radio was released.
Though the royalty rates are still quite small, iTunes is not as bad as other sites. A song download is 99c on iTunes, and a third of the money goes to Apple. After net and wholesale rates, the artist receives around $0.09-$0.10 per stream. does. Though the royalties are bite-sized, relative to the others in this list iTunes is a better option in the long run. The popularity of the platform makes it a good place to get your music noticed, too; a reported 75% of all songs on iTunes have been downloaded at least once and 90% of customers are regulars.
3. Rhapsody – $0.0022 Per Song
Online music store Rhapsody has been around since December 3rd 2001. It’s the father of on-demand web services and one of the first places to offer legal free music streaming. Regardless of its online pioneer status, the website has suffered great accounting losses due to management problems. Many have come to Rhapsodys’ defense and blamed the financial difficulties on an inability to compete with fellow streaming websites, Pandora and Spotify. Though that may be true, many other factors came into play to cause Rhaspsody’s troubles.
There’s the fact that Rhapsody executives failed to develop new mobile apps or other media. There’s also the fact of the menial royalties paid to artists – are the royalties so low because the site is struggling, or is the site struggling because the royalties are so low? For every song, on average, the payout to the label and artist combined is about one cent. Of that one cent, the label would receive $0.0091 and the artist receives $0.0022. Mostly, artists receive fractions of a cent. The former CEO of eMusic claims that this is due to lack of advertising revenue. Rhapsody is a prime example of a pioneer who, despite toiling for over 12 years, could not keep up with the times and remain profitable in the music business.
2. Last.fm- $0.00075 Per Song
We’ve reached the penultimate contestant on the list. The music and social networking site, Last.fm, one of the many examples of online radio. It revolves around its music recommendations. Its one distinction from competitor Pandora is how its recommendations are generated. Instead of matching the user to his or her self-reported musical interests, it matches him/her to data that the rest of the Last.fm community has used. Said data is transmitted or, “scrobbled” as the company puts it, through 600 different media outlets and devices. Another major contrast is its extensive API, which allows other products, like SongKick and Xbox’s Kinect to use its content to develop new features. Using social media, like Facebook and Tumblr, Last.fm makes web users aware of various playlists and favorite tracks from the internet community.
But then comes the fifty million dollar question: does it provide the artists with the royalties that are due to them? The answer to that is unclear at best. Last.fm pays out around $0.0005 per play, probably on top of other performance revenues. These rates themselves are miniscule…. and that has to be split! This boils down to the label getting paid around $0.004 and the artist gets $0.00075. And we haven’t even factored in all of the other people involved in the making of one little song who need to make a livelihood…
1. Spotify- $00029 Per Song
Now, onto the worst digital royalties website of all time. Ever since its launching in Sweden, in October 2008, Spotify has accumulated about 20 million users of which a quarter are registered, paying users – free users can stream content when connected to the internet, but if you want to have offline access to your favourite tunes and you want to avoid interruption through ads, you can pay about $10 per month for a premium service. The music streaming service streams content from various record labels, including Sony, EMI, Warner Music Group and Universal, paying more than €45 million in the process. Spotify launched its services in the United States in July 2011, after four years of negotiations with four major record companies. It has yet to grace the computers of our Canadian cousins, though.
Despite Spotify’s success in its seven years of existence, it has come under fire from various musicians – including Radiohead’s lead singer, Thom Yorke, who says that Spotify’s endangering the record industry. Songs usually generate between $0.006 and $0.0084 per stream. The usual splits between the label and the artist average about $0.0016 for the label and $0.00029, but that payout is only guaranteed after the song has gained about 4 million plays in a month. Though Spotify claims that the payouts add up eventually, they fail to mention that their figures are likely skewed by earnings of already-popular artists. Recent most popular songs – Eminem’s The Monster and Pitbull’s Timber to name a few – have garnered between $192 000 and $294 000 since their release on Spotify. But of course, the biggest artists will obviously have it easier than the smaller acts. According to Time, Spotify state that a nice indie album can generate around $3300 in a month while classic rock albums can bring in around $17000.
Though good for an artist’s popularity given its huge user base, Spotify doesn’t seem to be a profitable platform on which to post music. Spotify naysayer Thom Yorke has pulled some of his solo work off of the site, claiming that the streaming service barely paid. Other high-profile artists like The Black Keys and singer-songwriter Aimee Mann have avoided releasing their music to the site to protect their record sales.
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