Songwriters Are Getting Drastically Short-Changed In the Streaming Economy, New Study Confirms

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Photo Credit: Sam Moqadam

The streaming music economy massively favors recorded music rights holders over publishers. A new report highlights just how imbalanced this revenue structure is for songwriters.

The 35-page report, called “Rebalancing the Song Economy,” paints a stark picture for songwriters trying to survive the streaming era. It proposes some solutions on how songwriters can earn more revenue for the difficult work of actually writing songs. But the numbers revealed in the report are pretty startling.

Global music industry revenues fell by 30% in 2020 due to COVID-19 and the recession. That includes revenue from recordings, publishing, live performances, merchandise, and sponsorships. Music publisher royalties are more than three times smaller than record label royalties. Streaming is expected to bring in $456 billion in revenue, but the royalty imbalance favors labels 3.3 times more.

It also highlights the ‘industrialization’ of songwriting and how record labels are creating machine-tooled hits. These songs are optimized to do well on music streaming services. “While the upside for songwriters is more work, the downside is sharing an already-small streaming royalties pot with a larger team of creators and co-writers,” the report states.

Songwriters often rely on supplemental income from performance royalties on broadcast TV and radio. But these formats are in decline as fewer people have cable subscriptions or listen to the radio while commuting. Performance royalties are facing a long-term decline, meaning fewer royalties for songwriters.

So what can be done to make royalties fairer for songwriters?

Streaming royalties for songwriters are almost non-existent. Out of the total royalties paid by streaming services to rights holders, between a fifth and a quarter is paid for publishing rights to a song. Independent artists can expect to earn around $3,000 per 1 million streams.

Meanwhile, the songwriter who wrote the hit may earn $1,200 to $1,400 – if they are the only songwriter on the track. Because songwriters often collaborate, many make between a third and a half of what artists do for their work on the ‘song.’

The report suggests three areas of action that are rather complex. Streaming pricing is mentioned as a possible solution, but price increases must benefit all creators. The report also mentions a reduction in the discounting of subscriptions as a potential solution. Currently, Apple, Spotify, and Amazon Music all have four-month free trial offers available through some promotions.

“What is clear is that today’s song economy is not working as it should and that everyone across the value chain will benefit from a coordinated program of change,” the report closes.