AUSTIN, TEXAS -- Streaming services have replaced downloads as the trendy new way to access recorded music, and, as usual, huge questions center on who in the recording industry will get paid and how much, if anything.
The record labels, especially the big multinationals, are getting paid first in their deals with relative newcomers such as Spotify, so what does that leave for the artists?
A decade ago, compact discs were still the coin of that lucrative realm, retailing for upward of $15, with artists making about 10 percent once they recouped their upfront money from the record labels. Few artists made a living off their recorded music, but the music industry profited handsomely. The advent of
The "Pennies from the Celestial Jukebox" panel Friday at the
Early stories of Spotify's emergence in Sweden four years ago were tainted by reports that even major artists such as
Under the new math of the music industry, many more people would access the music via streaming at a significantly lower cost than ever before. Yet many of the same disturbing questions remain about equitably dividing the revenue.
Label deals with Spotify and other services lack transparency, artist manager Nick Stern said. Just as 20th Century artists rarely knew how much the labels actually made off their albums, today's artists don't know how much licensing money the Spotify-type services have paid the labels to stream their music. "Its not a problem with the economics of Spotify," Stern said, "it's a problem with the economics of the music business."
One thing is certain. "The days of the $14 billion a year music industry are gone and they're not coming back," Downs said after the panel.
Yet no one was advocating a return to the way things used to be.
"Consumers are telling us they want to experience music this way (via streaming)," Stern said. "So it would be stupid to fight it. Otherwise we're just going to repeat the last 10 years."