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Streaming royalties are broken, Rashida Tlaib thinks Congress can fix them – londonbusinessblog.com

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There has never been an easy time to be a musician, but for many in and around the industry, the 21st century has brought disaster after disaster for those hoping to make a living from music. At the turn of the century, record labels imploded at a dizzying pace, and it would be some time before some rescue arrived in the form of streaming services, which finally offered an effective method of making money listening to music.

An important question, however, arises when examined in the harsh daylight: for whom exactly are these services useful? According to the Record Industry Association of America, streaming represented 83% of all recorded music revenue in the US, from 2020. Calculating the revenue an artist makes per stream can be a complex task.

Different rights holders make different deals, and you have a lot of chefs competing for that money, including publishers, distributors, and labels. The generally accepted figure for Spotify is that: somewhere between $0.003 and $0.005 is paid per stream to artists. The figure varies widely from service to service, although it is generally fractions of a cent. Apple, especially unveiled last April that it pays about a penny per stream — a generous amount by streaming industry standards.

Income figures have, of course, been a common complaint among musicians for over a decade, but like so many other labor issues, things have come to a head during the pandemic. Two years or more of limited or no touring has brought sharp relief. In late 2020, the Union of Musicians and Allied Workers (UMAW) launched the Justice at Spotify campaign to raise awareness of the issue.

“With the entire live music ecosystem being jeopardized by the coronavirus pandemic, music workers are more dependent than ever on streaming revenue,” the organization noted at the time. “We call on Spotify to pay more royalties, be transparent in their practices and stop fighting artists.”

The union would eventually find a listening ear in Congress in the form of Michigan Rep. Rashida Tlaib. Last week, reports surfaced that the congressman was drafting a resolution aimed at establishing a royalty program to provide musicians with adequate compensation through royalties per stream. “It was a meeting with the Union of Musicians and Allied Workers,” Tlaib told londonbusinessblog.com. “One of the things that kept coming up was what Congress could do to support their efforts to be protected and also to fairly compensate musicians for their work. Having respect in this area, especially from so many people in the industry who continue to monopolize and so on. They did a great job, came to us with this proposal and taught my team and I so much about the ins and outs of how it works now.”

Tlaib says her team worked closely with UMAW in drafting the resolution. “We are doing the same with our housing bills and trying to address the economic gap in our country. We let ourselves be guided. I work for them, help them and advocate on their behalf. They teach me so much about monopolization in the industry, and how Spotify specifically acts in bad faith in many ways.”

Musician and UMAW member/organizer (and musician/newsletter writerDamon Krukowski said in a statement to londonbusinessblog.com:

Currently, music streaming is building wealth for streaming platforms at the expense of musicians. UMAW is working to restore that imbalance. Rep Tlaib’s proposed legislation would guarantee minimum payment from platforms to the musicians playing on streamed recordings. The infrastructure for such payments already exists, as they are already required for satellite radio. This same principle should be applied to streaming, for fairness and for the permanence of recorded music.

Tlaib’s resolution would use the non-profit royalty group SoundExchange, as well as the Copyright Royalty Board, to calculate and distribute royalties. The two bodies already have a similar function for webcasting and satellite radio. This would actually work under a complementary model, geared to streaming.

With the news of the resolution surfacing at the end of July, the news has spread across the industry. Tlaib said she had not yet spoken directly to Spotify, explaining, “I understand they are aware.” She adds: “My priority is not with the companies. It probably never will be. They have their lawyers, they have their lobbyists, they have their resources to run ads and gaslight people to say that all the things they say will happen if we continue to move this cause forward. My priority is that everything is done right and that there is no fair trade in this market.”

londonbusinessblog.com contacted Spotify for the story, but has not yet received any comment. CEO Daniel Ek has caused a stir in the past for suggesting that the streaming model simply couldn’t — or wouldn’t — support musicians like record sales had done in the past. “Some artists who did well in the past may not do well in this future landscape,” he said in an interview in July 2019“where you can’t record music once every three to four years and think that’s going to be enough.”

Tlaib’s resolution is gaining steam among House colleagues. Most recently, New York Rep. — and fellow Squad member — Jamaal Bowman expressed his support for the draft, which is still awaiting review by the House Legislative Counsel.

Tlaib tells londonbusinessblog.com that she believes such legislation could also gain bipartisan support in Congress.

“I think what’s happening is people don’t realize that a lot of the people who are affected by what’s happening are in all congressional districts. I don’t think you can go to a district that isn’t affected by it or doesn’t understand how incredibly unfair it is. I know we will be able – especially with the work the Union of Musicians and Allied Workers is doing outside of Congress – to make this a viable piece of legislation.”

Tlaib’s own district—which includes western Detroit—can certainly lay claim to that impact.

“Detroit is a global music capital in the world: Motown, techno, jazz, gospel. I wanted to honor that and respect that incredible work that played a huge part in movement work,” she said. “Music played a big part in my growing up in the social justice movement. It was a way of bringing people together to understand not only human pain, but the possibility of ‘better’. When I think of these amazing musicians coming together like this, it’s incredibly inspiring. And why not? Why don’t they earn Spotify and other great people in the industry to pay them what they deserve?”

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