Streaming services are NOT underpaying artists, concludes new study

Spotify, other streaming music services, and the major record labels are not making excessive profits at the expense of artists, according to a new UK government study. It’s a conclusion that many struggling artists and independent labels will find disheartening.

While the study was of the UK music market, its implications are global.

The year-long investigation by the UK’s Competition and Markets Authority acknowledged the concerns of artists but claimed that government intervention in the market would not help.

Who Wins?

0.4% of artists accounted for 60% of streams

The top 0.4% of artists accounted for 60% of all streams, leaving the remaining 99.6% of the 11 – 12 million artists on Spotify and other music streaming services to divide what’s left. A UK artist could expect to earn around £12,000 or $14,370 from 12 million streams in 2021, but less than 1% of artists achieve that level.

In addition to a few top artists, the real winners in the shift to music streaming were fans.

Prices for consumers fell by more than 20% between 2009 and 2021, according to the study, with some services also offering free ad-supported music streaming.

Deals for artists and songwriters are getting better, according to the report. Average royalty rates in major label deals have increased from 19.7% in 2012 to 23.3% in 2021, and the share of revenues going to songwriters and publishers increased from 8% in 2008 to 15% in 2021

Read the full report here.

Bruce Houghton is the Founder and Editor of Hypebot and MusicThinkTank, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a professor for the Berklee College Of Music.