Thanks to the escalating war of words between the independent music community and Google over royalties to be paid by their pending YouTube subscription music service, we're also getting some details as to what the new deal between YouTube and the three major label groups looks like.
Ignore those who suggest that YouTube paid a $1 billion advance to the majors. But the details shared by American Associatian of Independent Music (A2IM) president Rich Bengloff and how they hurt artists are far more likely:
"Universal Music makes the per-stream rate as low as they possibly can so they have to give the artist very little money,” he told Billboard. “Then, on top of that, they have something called a 'listener hour guarantee,' which they know is going to up their compensation by about 40% - since it’s per listener hour, not per track, the artist gets screwed because it’s not attributable to a track, so the artist doesn’t get a royalty
... The third thing they do is get a minimum annual guarantee or an advance if they know the service isn’t going to reach that level of business and be able to recoup - it’s what’s called breakage and they also don't share that with the artists.
...Who said that if Koko Taylor, who is an eight-time nominated Grammy artist, and Justin Bieber release a song, that they should get paid differently?”