Music streaming services are swallowing small artists whole and something needs to change

On December 6th 2018, our social media feeds were inundated with music lovers and artists alike sharing who they’d listened to, or how many people had listened to them on Spotify via Spotify Wrapped.

Whilst Spotify’s end of year campaign is, for many, a celebration and a visual representation of their year in music, Spotify Wrapped has exposed several problems within the world of the music streaming giants. One example is the supposed bot problem which has seen randomly selected tracks enter our top listened to lists, investigated recently by Crack Magazine. The more pressing issue, however, is the royalties that artists are receiving per stream. One tweet from punk band Dream Nails summed it up rather well.

Here’s our Spotify end of year report* This is the reality of music now. If you care about bands success & survival, buy their music!

*tweaked a little once we’d done the maths pic.twitter.com/YhOxl1sb8C

— DREAM NAILS (@yourdreamnails) 7 December 2018

Most of us are already aware that artists don't earn a huge amount from streaming sites, particularly small acts. This was brought to a head when, in 2014, Taylor Swift removed her music from Spotify in order to take a stand against the site, who said that their average payout for a stream to labels and publishers is $0.006 and $0.0084 per stream. An infographic from Information Is Beautiful, published in 2010, suggests that artists retain just $0.001128 per stream after labels take their portion.

Bigger artists who amass billions of streams are likely to do well from streaming sites; Music Business Worldwide have calculated that at a rate of $0.007 per stream, Ed Sheeran and music business rightsholders have earnt over $20.3m from Spotify. Yet, it is quite staggering to see the real, black and white figures in Dream Nails’ tweet; after 78,000 streams, they earnt just £458. The reality, for most artists that aren’t amassing billions of streams, is shocking.

Streaming sites such as Spotify are unavoidably popular, though: it is where most smaller bands have established their fanbases, thanks to the site’s tailor-made discovery playlists. Furthermore, with over 40 million users a month, Spotify’s regularly updated playlists, like New Music Friday, have given huge exposure to bands that have recently started out.

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So it seems that artists are faced with limited options: streaming sites are vital for gaining exposure in the digital age, yet the reality is that this alone cannot constitute enough for smaller bands to make a living. In a bigger dampener, these royalties are continuing to decline. A recent report from Digital News showed that 1,000 streams on Spotify two years ago earned rightsholders more money than 1,000 streams on Spotify today, despite its huge commercial growth.

The reality of society’s shift from tangible to online music via streaming is really taking its toll. Just look at HMV (again) announcing closures of over 60 of its stores in the UK. Since music is so easily accessible at the touch of a button, and films are so accessible from the comfort of our laptops, we are on the brink of losing the physical presence of music in our high streets.

This may well continue to drive subsections of shoppers to independent shops, such as vinyl stores, that seem to continue to hold despite the changing tides of time. If anything, turntables are coming back into fashion, sought after by those who romanticise eras gone by. According to a recent report from RIAA, vinyl sales increased by 13% in 2018, proving that the physical act of playing music still very much resonates with the digital generation. Whilst vinyl sales rise, however, CD sales continue to drop massively. The same RIAA report shows that both digital and physical album downloads have fallen this year and revenue from US CDs fell by a shocking 41% in the first half of 2018.

It would be naïve, however, to think that the closing of HMV is going to change our listening habits on a monumental scale, though it certainly is a wake-up call. I am not, therefore, asking you to stop using streaming sites: this would be unrealistic, and there are many pluses to them, particularly for students whose wet dream it is to only have to pay a fiver a month to have all of your favourite tunes in one neatly organised app.

However, it is so important that we keep the physical presence of music from dying out. Just imagine how much more money Dream Nails might have made from even a portion of the 78,000 streamers buying an album.

So if you love that song, that album, go out and physically buy it. If that artist gives you a sense of feeling alive, then follow them and go and support them by buying tour tickets and merch. Go to more intimate gigs, even if you’ve never heard of the artist before – they may become your new favourites. It is simply not sustainable for smaller artists to merely exist on streaming sites; and by not supporting them physically, we risk losing so much of our generation’s musical talent.