Swizz Beatz Says Streaming Services Should Pay Artists 50/50: ‘We’re Not Getting Paid Enough’

 Acclaimed hip-hop producer Swizz Beatz is calling for a serious compensation overhaul from streaming music services.

Without artistic content, streaming music services would be worthless.  So now that platforms like Spotify are worth billions, why aren’t artists getting a bigger cut of that?

Perhaps more importantly: why are producers, songwriters, and performing artists still receiving such paltry per-stream payouts?

Longtime hip hop producer Swizz Beatz, whose real name is Kasseem Dean, is the latest artist to discuss the growing elephant in the room.

“I’m friends with all the streaming companies, but what I will say on record to them is we’re not getting enough money for those services and those companies to be trading for billions of dollars,” Dean told MarketWatch’s Jeanette Settembre this week.  “I feel that the creatives should be 50/50 because without music, what are you going to stream?

“Without content, what are you going to stream?”

From an industry standpoint, streaming platforms have sparked a turnaround in once-dying recorded music assets.  But pound-for-pound, industry veterans remember a far more lucrative business.  So do artists, producers, and everyone else in the creative food chain.

“Streaming is the big topic,” Swizz Beatz stated.  “I’m still wrapping my head around it just because I’m not one to get excited with hype.

“My thing is like I see the hype, it seems cool, everybody is chasing it, but what does it really mean?  I remember when we were selling a million physical records, for real.”

Fun Fact: Swizz Beatz is actually a Harvard Business School graduate.  So he’s more than qualified to look at the obvious math issues at hand.  “Streaming became very important as a database, but is that database translating into real currency like what we were doing in the late 90s, selling 10 million records?” Beatz questioned.

“I feel that the advancement of the technology should match the advancement, currency wise, of the artist.”

Streaming magnates like Spotify cofounder Daniel Ek fail to see a problem, however.  Ek and others argue that artists are benefitting enormously from streaming — while pointing to billions in royalty payouts.

Ek often waxes about the economic boom created by Spotify, and the positive impact that his platform has had on the broader music ecosystem.  But that impact rubs both ways, with Spotify wielding enormous influence over once-powerful platforms like radio.

“The radio now pulls from streaming services,” Dean relayed.  “If a song is not streaming a certain amount of numbers, then the radio knows to pull off the record.”

Concert promoters and festival bookers are similarly tuned in.  A popular or trending Spotify artist is more likely to resonate with live audiences, and boost a broader festival bill.  But without positive data, the decision becomes far more difficult.

Beatz himself is definitely diversified beyond recordings.

As a producer, publishing is also a major revenue source.  But Swizz is also making money off of lucrative sponsorships, with partners like Reebok allying with the influential urban star.  Those deals obviously pay better than Spotify — but then again, Spotify can help to seal brand sponsorships with the right data.

That’s not as strong a factor for an established star like Swizz Beatz, who owes a lot of his popularity to the major label machine.  But sponsorships remain lucrative options for some artists, some of whom have blown up on streaming platforms.

Add touring, broader publishing, and even celebrity investments into the mix, and streaming can certainly fuel a broader career.

Sounds like huge upside for the rare success story.  Then again, does that rationale justify an unfair streaming split?

 

9 Responses

  1. Avatar
    Nicky Knight

    Thing is, consumers won’t wanna pay more than $5-$12 for a music streaming service.. Only a select number of songs get hundreds of thousands or millions of views/ listens..

  2. Avatar
    Reality

    Why are we still having this conversation as if Spotify doesn’t already pay 70% of their revenue to artists. Swizz is smarter than this, DMN is well versed in this. I really don’t understand what we’re talking about here. If Swizz wants more money from streaming revenue he needs to talk to the companies getting the checks.

    • Avatar
      Ash

      Salient points made by here by some on the overall payout, and I agree in concept. Fact is, assuming an approximate 5-to-1 disparity favoring labels over publishers, who Swiss should be really be mad at is the labels. We can argue that the overall income of DSPs needs to grow (i.e. more conversions to paid subscribers), but what money is being generated is being paid out and (as a general statement) it’s the antiquated and draconian record deals that are keeping artists from seeing anything more than 16-22% of that overall record/label income… a relic of the physical days.

  3. Avatar
    anon

    spotify would jump at a 50/50 deal all-in (recording and publishing). it’s closer to 70/30 now (all in). the issue the aggregated share payout math (compounded by artist deals with labels/publishers deals that may be lopsided). I pay 15/month, but my money doesn’t go to the mostly independent artists I listen to. it gets pooled with everyone else’s money and allocated based on overall popularity, skewing the payments to the top 500 artists. so my hundreds streams of streams add up to very little $ to the artists i listen to. this is very different than physical and downloads where my 15 bucks or 99 cents went to rights owners of the specific albums/tracks i consumed. until this is fixed the top 500 artists will make a even-greater killing at the expense of the lower-streaming artists that might otherwise make a modest, but more significant, sum from their loyal following.

      • Avatar
        Anonymous

        pro-rata by user, not pro-rata by the whole, is how it should have worked from the beginning. you could argue that pro-rata by the whole is how public performance royalties black box (and other black box) $ is allocated, but that is due to a lack of granular usage data. there is no lack of granular data for streaming services. Of course that would skew the per-stream payouts for specific rights owners, but on the whole it would be identical. video streaming is not quite a good analog, as the offerings are more limited and are lump-sum payments as i understand. While youtube contentid payments are terribly low per-stream, i’m curious if they are allocated the same way or if it’s directly connected to a share of the ad revenue generated by the specific tracks users stream….

        I’m not sure if the math would work out, but the only saving grace is for supporters of independent music is to make sure their spotify is always streaming, 24 hours a day, to a big playlist of their favorite artists, so their stream counts can over-index for their spend. i try to do that encourage others to do the same.

  4. Avatar
    Joesph K

    What a dumb fuck. Spotify already pays out 70% of their revenues.

  5. Avatar
    Anonymous

    Yea but not to the artists the labels get the majority of the money

  6. Avatar
    Reality

    They pay more like 80/20. Swizz is smarter than this, I’m shocked he would say something so foolish. But the really foolish thing is DMN keeps writing the same story over and over and over. All those billions of dollars flew right out the window of Spotify. If Swizz or any artist wants some of it they should follow the money. And on their way out they can thank Spotify for increasing their touring revenue and radio play. You used to have to pay for promotion like that, not get paid for it as you do with streaming royalties.