Do Musicians Owe Streaming Services When They Go Bankrupt? Asks Top Billboard Journalist
Tweeted by Billboard Senior Editorial Analyst Glenn Peoples
Glenn Peoples' is usually one of Billboard's best informed writers, particularly on the digital side of the music industry.
If he was trying to start a discussion, he succeed. David Lowery of The Trichordist, who is currently suing Spotify for $150 million, fired back that Peoples' tweet should win a Grammy for "Stupidest Tweet of the Year."
What do you think?
If well funded streaming services owe more money to musicians, do musicians owe the services when they go bankrupt?
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It was a straightforward question that requires the context of my other tweets. It was a comment on the often-heard notion that digital companies that license music owe creators when they raise money. People ask, “But what about musicians? Why should the company and its founders get all this money while artists are getting these puny royalties?”
My point is artists aren’t investors in these companies. They’re partners, but they’re not investors. And because they’re not investors, they don’t share in the proceeds of capital raises (either investments or IPOs). Nor do they share any financial responsibility when a digital company goes out of business (in part because it’s paying a large percent of revenue for royalties).
Mr. Lowery believes artists are subsidizing services like Spotify. I assume that’s his term for the difference between the currently royalty rate and the royalty rate he desires. To whatever degree rights holders are being underpaid, I think the market will work that out. Whether it’s lawsuits, grassroots activism that changes business models, or lobbying that leads to favorable legislation, the market will work these things out.
So to answer my rhetorical question, no, artists don’t owe anything to digital services that go out of business because they don’t have the skin in the game that would also allow them to share in financial success.
No skin in the game? Whether you are an artist that’s independent or getting an advance from a label that you have to pay back – it’s a very high cost scenario to provide THE content on Spotify to make Spotify and their investors money. Without artists making the real investment of gear, studio time, a pro mixer, mastering, publicity, etc. (if it’s a commercial product totally $10,000s-$100,000s)there would be nothing to stream. We have plenty of skin in the game and everything to lose in an extremely challenging career path. Much more to lose than the ‘already wealthy person’ looking to make more money off of their money.
-Todd