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How Much Do Digital Music Services Pay Copyright Owners? [INFOGRAPHIC]

StremaingDollarsAs music fans continue to have more options in their digital music consumption, the ways that artists and copyright holders get paid continues to become more complicated and fuzzy – often because of outdated copyright laws and private negotiations occurring between artists, labels and streaming services. Given that digital music services like Spotify and Pandora are continuing to see their user bases grow  at the same time that global music sales continue to decline overall, music services need to become transparent enough so that artists can get a clearer grasp of the viability and sustainability of their music careers through the usage of their recordings.

With that in mind, the following infographic displays the projected revenue for 2012 earned by Pandora, Sirius XM and Spotify, and then compares that to the amount of money copyright holders receive in return for the usage of their recordings.

click image to enlarge

Enhanced-buzz-wide-8746-1350918114-19Source: Buzzfeed

Does This System Benefit Anyone?

The data above describes an interesting reflection of the current state of copyright laws, as they don't seem to work in the favor of either content providers or the creators. Spotify was recently slammed for having an “alarming” and “unstainable” business model by financial analysis firm PrivCo, where "virtually every new dollar of revenue went directly to music companies as royalty payments, evidencing the fact that the more members Spotify adds, the more money the company loses".

Meanwhile, Pandora recently made an announcement regarding how much revenue particular artists are generating through their service, but didn't account for how those payouts are being split between labels and artists. 

One has to ask, then: Since people clearly want to continue listening to music on the Internet, why then are we so slow to advance the space by establishing updated and more straightforward copyright laws that can benefit both musicians and streaming services alike? Are musicians destined to get the short end of the stick, while music services continue to earn millions / billions from the exploitation (for better or for worse) of their art?

Tell us what you think! Leave your thoughts and comments below.

Hisham Dahud is a Senior Analyst for Additionally, he is the head of Business Development for Fame House and an independent musician. Follow him on Twitter: @HishamDahud