Back in the days when “music” meant CDs and vinyl, a songwriter could make a decent living: their percentage of a song or songs on the average $18.99, 12-song CD could add up quite nicely, as anyone with a credit on a blockbuster album like “Thriller” or “The Bodyguard” could attest.
But when streaming — which pays around $.004 per play — became the dominant format, songwriters were quickly shunted to the bottom of its economy, and anyone who tries to tell you otherwise is probably under the influence of a streaming service or another interested party. Songwriter royalty rates — which are appallingly low, as you’ll see below — have increased only slightly in the 13 years since Spotify launched in the U.S. and it’s still almost impossible for any but the most successful songwriters (as opposed to performers) to make a decent living.
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And with Spotify, the world‘s largest streaming service by a wide margin, dodging those rate increases by introducing subscription-bundling options that will lower its royalty payments to songwriters by an estimated $150 million in the next year, it’s about to get even worse.
This situationis presented in sobering detail by a new study titled “Songwriters Take the Stage” from London-based marketing intelligence and consulting firm MIDIA Research, written by former Billboard reporter Tatiana Cirisano and songwriter Fernanda Balzaretti. The data in the report is proprietary and thus PvNew can only share a small amount, but there’s more than enough to make the point.
Of the over 300 songwriters surveyed for the study, only 10% earn more than $30,000 annually, while over half (54%) earn between $0 and $1,000. Some 67% of the respondents said the “lack of meaningful streaming income” is their primary challenge.
Why is this the case? In part, because of the discrepancy in what a songwriter earns of that $.004 versus the performer’s share: The songwriter gets an average of 9.5% while the artist receives nearly double that amount, according to the report. (The report’s writers note that mostly lower-earning songwriters participated in the survey.)
A stream is divided thus: the recording side (including the label, distributor and artist) gets 56%; the streaming service gets 30%; and the publishing side (including the publisher, the performing rights organization — such as ASCAP or BMI —and the songwriter) gets just 14%, according to the report.
Of that 14%, the songwriter gets 68%, the publisher 17% and the PRO 15%, the report states. But those numbers don’t take into account the fact that most hit songs these days have between 3 and 12 writers splitting that 68% of the 14% of $.004 per stream, and that they have managers and possibly other interested parties earning a percentage of their share. The human brain can’t even comprehend the infinitesimal amount the creators of most songs earn per stream.
The streaming economy is deeply unfair to most artists as well, but they have opportunities to diversify that non-performing songwriters do not: Touring — which is how most performers have compensated for the vast decline in income that accompanied the streaming era —merchandise sales, synchs (such as film/TV and advertising), endorsements and other ways to monetize their popularity.
But most people would never recognize the most successful non-performing or even non-superstar songwriters, even though they might know and love a dozen of their songs. Small wonder, then, that among the 309 songwriters surveyed for the report, a whopping .04% — yes, 11 —identified themselves as only songwriters; most of the rest are also producers, performers, film/TV composers or jingle writers. And just 23% say they’re full-time songwriters.
How did it come to this? Put simply, because even though there is no music without a songwriter, they have the least leverage in the streaming economy. As the data above shows, record labels make a lot more money per stream than a publisher does — and because the companies that own the largest labels also own the largest publishers, it is in their interest to keep things that way, because they make a significantly larger profit on recorded music than they do on publishing. And the collaborative “writers rooms” where many of today’s hit songs are created don’t pay a salary or even a per diem — the songwriters only get paid if the song is recorded and released, which means they’re often paying out of their own pockets just to work.
Songwriters also do not have a union or a powerful trade group, like the labels (the Recording Industry Association of America, or RIAA) or the publishers (the National Music Publishers Association, or NMPA). There are advocacy groups like the Songwriters of North America (SONA), the Nashville Songwriters Association International (NSAI) and the smaller, more-outspoken 100 Percenters, but those are primarily part-time organizations with much less clout than the previously mentioned ones. And although the NMPA punches far above its weight and fights for songwriters’ rights, the interests of songwriters and publishers are not always in perfect alignment (and remember who owns the biggest publishing companies).
Even producers have managed to leverage their situation better, often negotiating “points on the master” —a percentage of the recorded-music royalties — as part of their deal. Such arrangements are extremely rare for songwriters.
The end result is a situation that everyone knows is wrong but no one is able and/or willing to risk their own livelihood to fix (like a lot of other current existential crises). Some streaming services, like Apple Music and especially Tidal, do pay a higher rate than Spotify, but you have to rack up millions of streams to notice a difference between $.004 and $.0125. And songwriter groups have advocated for points on the master — British superstar singer Raye, who began as a professional songwriter, argued for it forcefully onstage at this year’s BRIT Awards —as well as a salary or per diem for writers rooms.
But the situation has gotten so dire that when a group of writers refuses to accept the going conditions —as a short-lived songwriter collective called the Pact did three years ago —there are plenty of others eager or desperate enough for work to cross their picket lines.
For more information read the MIDIA report (available here), PvNew’s extensive past reporting on this subject, and contact SONA, NSAI or the 100 Percenters. And most of all, pay for your music, because there’s no art without artists.
