The whole concept of a music fan owning music, caring not only about the artist but the additional players, the production people, the artwork, the care and thought that an artist puts into the concept of an ALBUM of music, meant to be listened to from beginning to end, is truly over. Music is now a commodity, and musicians are not artists, we are merely content providers.
Some examples, from an excellent Wall Street Journal article by Neil Shah:
- as of June 30, 36% of music sales are from streaming, compared to 26% from physical albums and 20% from digital downloads.
- This summer Chance The Rapper released the first streaming-only album. He has no record deal and creates no physical product. He has a deal directly with Apple Music for distribution and his album(?) "Coloring Book" debuted at #8 on the Billboard chart.
- Last week Riahanna's album "Anti" only sold 5,000 physical copies,but it is in the Billboard Top 10 with more than 26 million streams
The good news is that music sales and streams are up. In 2015 317 BILLION songs streamed on-demand. People are listening to more music more often.
The bad news is that although Apple Music, Spotify and other streaming services are getting super-high valuations, the artists are making dramatically less money.
The basic formula that the industry is using is that each stream of a music is worth 1 cent, so 1500 streams should equal $15, the price of an album.
Given that formula, Drake's new album "Views" has streamed 2 BILLION times, and it should be the equivalent of seeing about 1.3 million albums. 2 Billion streams = a million+ selling album.
But the $.01 per stream formula is counting all the revenue that Apple or Spotify pay for the stream. This is divided up between the record label, song writer, the publisher, the artist.
Looking at my digital sales report from my distributor CD Baby, if it is a song that I am all those things (record label, song writer, publisher, and artist) I do get paid 1cent, but in cases where I am only the record label or the artist, I can make as little as 1/10th of 1 cent ($.001)
If I get a Million streams of this song, I earn $1,110. I don't think I will be retiring on my streaming royalties any time soon.
But I might buy stock in Spotify when it goes public...
Here is an example of the report:
Aug 24, 2016
|Jul 2016||iTunes - Apple Music – US||George Kahn||Jazz & Blues Revue||I'd Rather Go Blind||Yes||stream||1.0||$0.00189917||$0.00189917|
|Aug 24, 2016||Jul 2016||iTunes Match - Americas||George Kahn||Jazz & Blues Revue||Something's Got a Hold On Me||Yes||stream||1.0||$0.00111095||$0.00111095|