Major Labels: Don’t Blame Us for Underpaying Artists, Blame the Streaming Services…

“This is an important topic.  Too many artists, songwriters, labels and publishers today are being paid below market rates – or not at all — by many streaming services and radio platforms. That needs to change.”

Statement from major label trade group the Recording Industry Association of America (RIAA), in response to a Rethink Music report showing that the average artist is underpaid on royalties by 20-50%.  The RIAA represents major labels Warner Music Group, Universal Music Group, and Sony Music Entertainment. 

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When it comes to the whole ‘streaming services screw artists’ thing, companies like Spotify have always had a quick defense: they pay the labels, not artists.  And if labels steal money from their own artists, that’s not Spotify’s fault.  “But again, our relationship right now – we pay out the money to the labels, and the labels are in turn paying out to the artists,” Spotify CEO told the Wall Street Journal’s Walt Mossberg, part of a well-worn defense.  Add recently-leaked major label agreements that confirmed artist-screwing terms like direct lump-sum payments and preferential ad inventory grants, and the glove seems to fit.

Enter Rethink Music, an initiative from Berklee School of Music, which just released a damning report showing just how badly artists are getting screwed in the digital era.  According to the report, artists are routinely underpaid by 20-50%, on average, a figure the Recording Industry Association of America, the major label trade group, is now contesting.

“They offer no support to back that assertion,” the RIAA recently told Billboard, a longtime mouthpiece for big labels.

But the RIAA is also deflecting blame away from the labels, pointing to streaming services – not labels – as the big culprit.  “This is an important subject,” the organization continued.  “Too many artists, songwriters, labels and publishers today are being paid below market rates – or not at all — by many streaming services and radio platforms. That needs to change.”

26 Responses

    • Menan

      There’s no market rate here but if the musicians are not able to make a sustainable living and/or production of new music, it is an unsustainable market.

  1. Name2

    Isn’t the RIAA in fact…… a LOBBYING GROUP?

    (Cue drama hamster)

  2. Anonymous

    Major labels, particularly UMG, should blame themselves. They are the parents of all music KILLING hyenas!

    YouTube/VEVO, Spotify, Pandora and now Beats1 and AppleMusic are alive curtesy of UMG fellowship with no basics in mathematics!
    All those IFPI and RIAA praised music KILLERS are not able to bring $20B in ads and subs before 2025.

    Only exit from current suicide is new fair use act and conversion of Radio and streaming to $100B music store!

      • Anonymous

        Show you name with comment like that, at least we will know who is who in the comment game.

  3. Troglite

    Completely predictable horse puckey.

    Without access to the major label catalogs, the “streaming companies” wouldn’t exist. The major labels signed agreements to grant the streaming companies access to these catalogs willingly. Playing the victim is downright cowardly.

    If the major labels have a better strategy, they should explain and defend it. If granting access to these catalogs was a strategic mistake, they should admit it and explain their strategy for fixing it. Anything else just adds to the FUD, further diminishes transparency, and reduces any credibility the major labels may still have.

  4. Menan

    These labels should take the blame for everything because they agreed to the deals that streaming services came up with and now saying that it’s not their fault. I’m like wtf bro, we’re not dumb.

  5. smg77

    It’s nice to see people finally waking up to the fact that the labels have been the problem all along and not the streaming services or the consumers.

  6. Tcookemusik

    Take effective action to dislodge cumulative power. Reap the reward. Take the hamster around the cul de sac and chill in the hammock. Random attack on a sell out act. Fuse the combine and trick the gate. 100 plays. One lane. Follow me twitter.

  7. Chris

    Says the labels that financially back the streaming services, and benefit from their “below average payouts”

  8. Anonymous

    Before taking this report seriously, I think the table needs to be set as from whence it comes:

    It is co-sponsored by Google (ya know the folks who own YouTube), Kobalt (partially funded by Google) and the long established beard for the tech industry, the Future of Music Coalition (substantially funded by Google.)

    Berklee, sadly, as has happen too many times before, has let the tech industry and the anti creator cabal, lead their public statements and actions around by the nose.

    There are issues in this report that require serious public discourse. There are conclusions in this report that prove that is little more than an infomercial for those whose interests are enhanced when creators don’t prosper.

    • Where?

      Where do you get this B.S?

      Where does it say that the reThink Music piece is “co-sponsored by Google”?

      Why on earth do you think that Kobalt is “partially funded by Google” or that the Future of Music Coalition is “substantially funded by Google.”

      Stop making baseless assertions. It’s dumb. Like your illogical closing line about benefiting when creators don’t prosper.

      Just STFU.

  9. Rickshaw

    Is this April Fool’s Day? The labels have rarely paid artists what they deserve, thus the need for account audits and artist lawsuits. And…exactly how much of that advance money and lawsuit winnings did the labels filter down to the respective artists?

    • Anonymous

      1. Never enter into an agreement with any label without competent, music industry based, legal advice.
      2. As soon as you become successful enter into renegotiations with the label irrespective of when the current term ends; and, by all means,use a lawyer who knows the label intimately.
      3. Audit regularly, and, if you are a major success, in perpetuity. [Same for music publishers.] Hint: record company royalty departments are manned by good people who want to do the right thing – but deals are complicated and change from artist to artist, so, it’s pretty easy to make unintended mistakes. If your auditors find mistakes and the negotiation moves to the company’s legal department, make sure you have auditors or legal advisers that understand how to deal with ax murderers.
      4. If your label wants to extend your agreement beyond the initial term and options – shop around (with competent legal advice) even if you have been able to renegotiate your deal with your original company one of more times during the initial term and options.
      5. Hire personal and business managers that know what the hell they are doing… your bother or uncle may not qualify.

      If you have done all those things and still have reasons to bitch … fire away. If you haven’t, your comments are irrelevant.

      • Rickshaw

        That’s a lot of typing for not saying much. Tell your comments to artists like James Taylor and Eminem, to mention just a couple who have sued their labels for royalties owed.

  10. Josh

    Not only do the labels rob artists by making sure their advances and minimums are covered first, including the complex formulas invented by them and publishing admins, but they’re also to blame for there not being an advanced system for reporting and distributing royalties. A streaming service can’t even easily access an API with all the necessary ISRC codes and publisher info to integrate into their music service.

    How about the labels collectively invest in themselves and the artists they claim to support and create some real software and some fool proof systems more advanced than a sound exchange, ASCAP/BMI/SESAC, and DMCA loop holes. They can put their multi million dollar advances and minimums in to lobbying for and investing in that. Problem solved!!!

  11. Djam

    Labels are in control and have 100% control of the terms. If a streaming service or retailer would not agree to pay what labels set forth, then labels would be pulling music and suing these services for non payment.

    Take back control of your business. Set a fair price let the market decide. You can’t continue to sell this bs forever.

  12. Stan Halaby II

    wow.. what lengths the greedy corrupt rich take to screw us regular folk.. why should they care? they got theirs!

    • Stan Halaby II

      In other words “F you I got mine, and while we’re at it, gimme YOURS too!” sickening how we’ve become as a species isn’t it?

  13. Ed Jennings

    The RIAA is a shill for the record labels. They choose to ignore the SONY Spotify contract which exposes the RIAA as part of the problem, not the solution.