Rhapsody’s President “Trusts” That Artists Are Getting Paid

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But, how much are they getting paid, exactly?

We already tried asking Rhapsody that question, and quickly got the PR hand.  But Rhapsody president Jon Irwin now says the company has paid out “hundreds of millions” to rightsholders since 2001, and “trusts” that artists are getting their piece.  “Royalties have been the company’s greatest cost since launch,” Irwin responded in an op-ed for Billboard.  “We trust that this royalty revenue is flowing to artists, writers and the other creative folks responsible for the music we proudly distribute via Rhapsody.”

It’s a loaded comment, one that raises another thorny issue. For example, major labels typically demand tens of millions of dollars for the rights to stream their recordings, though serious questions surround the ‘trickle down’ to artists.  In fact, we’ve heard from attorneys and managers that creative accounting is alive-and-well at the big four, with even major artists seeing paltry portions.  And what does that leave others, like indies?

Meanwhile, the industry is wrestling with the broader issue of compensation.  But Irwin “disagrees with the tone” of Digital Music News’ coverage on the issue – though in fairness, he may be referring to some very vocal industry debates happening on our site.  “We welcome the recent discussion over artist payouts from streaming services, but we disagree with the tone of the recent coverage of the issue,” Irwin wrote (which would explain the retort in Billboard).

Perhaps we can all agree that on-demand means pennies for most participating artists, but Irwin says comparisons are misleading. “We have seen some of the artist income numbers being reported, and we agree, they seem awfully small – particularly those cited as generated by some of the free services,” Irwin admitted. “However, to look at these numbers through the lens of a single transaction is myopic.  If an artist sells a download, they may get a bigger cut, but they only are paid once.”