Grace Newton-Wordsworth and her band Joan and the Giants have eight songs on Spotify that have been streamed over 70,000 times.
- Spotify Paid On Average $ 0.0042 Per Stream In 2020, Report Says
- Two women try to overthrow the streaming business model
- They have created an app that aims to give local musicians a fairer treatment
And while many would see this as a huge achievement, the monetary reward is negligible.
“It equates to maybe a few hundred dollars,” she said.
“You invest so much in your music and it’s really pretty ridiculous how much you get in return, to be honest.”
The small returns that many artists receive from music streaming platforms were condemned in a recent United Nations report as “unacceptable, especially in light of the billions in market capitalization of streaming services.”
The World Intellectual Property Organization report, released in June, calculated that Spotify paid an average of $ 0.0042 per stream in 2020, or less than half a cent, while Apple Music paid $ 0.010 per stream. song.
In other words, it would take a million streams for an artist to receive roughly $ 4,200 from Spotify and $ 10,000 from Apple Music.
That is compared to the $ 8,000 it cost Grace Newton-Wordsworth and her band to record and master one of their recent songs, create a music video and promote it.
“That’s why we do a lot of things. You have to do gigs, you have to sell merch, you have to do a lot of things to support yourself as an artist, otherwise it’s really hard to make money. ‘money with streaming services. ”the Perth-based singer said
She’s had enough and wants to embrace a new music streaming platform designed to give more back to local musicians.
Reversing the streaming business model
Melanie Bainbridge and Harry Deluxe, who have decades of experience in the music industry – most recently in the band Mama Red and the Dark Blues – observed the decimation of revenue streams for record artists and decided to do something.
“All we’re doing is flipping the streaming business model,” Bainbridge told business leaders at a startup forum on Tuesday.
“Instead of actually benefiting the people at the top, it benefits the creator. So it gives them a source of income.”
They created a music streaming app called The Pack for original and unsigned local artists.
Listeners and businesses can subscribe to The Pack as patrons, with the money going straight into artists’ pockets.
“There are no labels or middlemen, so we’re actually removing a very large part of that conversation, and that’s meaningful for artists because they’ll get a much bigger percentage of the streaming royalties,” Ms Bainbridge said.
Artists would receive 40 percent of all revenue generated by The Pack, with the remainder going back to business development.
They say it will promote unsigned local artists who are “invisible” on major streaming platforms, without the backing of record companies to back them up.
“When we are part of our own cohort in our own communities, we are very visible. We are local. It is much easier for people to find us,” said Ms. Bainbridge.
They want it to be easier for music lovers to discover new singers or bands in their area, as well as businesses that want to play local music, but are struggling to find it on Spotify or Apple Music.
The idea is for listeners to help organize playlists in the companies they attend.
The customer can create his own space: owner of the café
Ali Pasay, owner of Farmology Café in East Perth, is considering becoming a patron.
“The best part is that the customer actually creates the space they want,” he said.
“There’s not much we can do with the decor, but that way they get that vibe they were looking for and they can come back to their favorite places and it’s still their space more than anything else. . “
The app will initially be tested in parts of Perth, with the goal of launching commercially in August next year.
The creators claim that the model can work nationally, with the interest of artists from all over the country and even overseas.
But they admit they’ll never get the membership of a company like Spotify, with its 355 million plus subscribers.
Can there be money without a ladder?
Ms Bainbridge said it has already been shown that the scale of major streaming services does not financially benefit many artists.
“We actually think they’re going to make more money from The Pack, in this hyper-local system than they actually make on Spotify,” she said.
“You will hear local music in your local spaces and places and you can invest in it locally and directly.
“And the other reason is the creator-consumer model, which means that each subscription only goes to the artists that the subscriber has broadcast.”
The UN report looked at different models of streaming services, including “fan-driven” royalty payments, similar to the system offered by The Pack, where a listener’s subscription is paid to the artists they pay. he listens rather than going to a pool.
But the report said “the imbalance between billions of stock market valuations and fractions of pennies in ongoing payments would likely remain.”
Spotify denied paying a fixed amount per stream, but instead distributed its revenue pool based on each artist’s proportion of stream. He said he paid out $ 5 billion to rights holders in 2020.
Nonetheless, the UN report suggested that the goal of “fair remuneration” would be best achieved by additional payment from major streaming platforms to performers and potentially producers.
The “streaming fee” would be outside of any recording agreement, could not be waived by the performer, and would be distributed by a royalty collection agency.
Paul Davies, director of Musicians Australia, said there needs to be a rebalancing of income so that musicians get their fair share.
“There is mass exploitation going on”
While the music industry is worth billions of dollars each year, the union estimated that musicians earned an average of $ 55,000, including through their work outside of music.
“If you do the math on that, very low streaming returns, a very low proportion of streaming revenue, and recorded in general, and very low revenue as well,” he said.
He called for market-wide regulation of streaming services internationally.
But with nothing like it imminent, artists like Grace Newton-Wordsworth are turning to the local level.
“I think that’s the advantage of The Pack because there are people behind you pushing you. It’s a team, it’s support,” she said.