Streaming music services pay for licenses, but do they pay for musicians?

Any Naples residents who has discovered Pandora or Spotify probably only has wonderful things to say about these streaming-music services, which allow users to listen to songs over the Internet for free.

Some music industry professionals like them, too, because they pay for the privilege of playing legally licensed music and take care to observe the copyrights held by artists and record labels.

But musicians? That may be a different story.

About a year ago, a classical musician posted a very detailed spreadsheet to her blog detailing precisely what she gets paid by music-streaming services. In a year of licensing her songs to Spotify, she earned just $547.71. That works out of less than half a cent per play.

This was something of a revelation. Until she did this, the music industry had welcomed streaming music services with open arms. That’s because each play on a streaming music service generates royalties, whereas with a platform like iTunes, only the initial purchase generates such fees.

However, now musicians are questioning whether the sheer volume of royalty payments makes up for the one-time, larger royalty payment generated by an out-and-out purchase.

To us, it seems like the music industry is going to have to go through a rather rocky period of determining how it feels about streaming-music services. It is possible that attorneys for music companies and artists are going to have to refashion the arrangements between their clients.

Source: The New York Times, “As Music Streaming Grows, Royalties Slow to a Trickle,” Ben Sisario, Jan.28, 2013