From an article that Ben Sisario wrote on The NYT in January 2013,
Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent.
Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.
“In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music,” Ms. Keating said.
The way streaming services pay royalties represents a major shift in the economic gears that have been underlying the industry for decades.
From 78 r.p.m. records to the age of iTunes, artists’ record royalties have been counted as a percentage of a sale price. On a 99-cent download, a typical artist may earn 7 to 10 cents after deductions for the retailer, the record company and the songwriter, music executives say. One industry joke calls the flow of these royalties a “river of nickels.”
In the new economics of streaming music, however, the river of nickels looks more like a torrent of micropennies.
Since condemning anyone to poverty is never good, more data that shows the impact of streaming on musicians’ earnings in three different ways would have been good:
1. The extent to which “streaming royalties” replace “lost” MP3 and CD (?!!) sales,
2. Incremental streaming revenue from those who discovered and listened to someone’s works (one-time and repeat)
3. Incremental revenue from “conversions” = those that discover an artist’s music and then end up buying a song
From an article on Spinner.com,
Most recently, the Black Keys declined to make their latest album, ‘El Camino,’ available for online streaming.
“[Streaming services] are becoming more popular, but it still isn’t at a point where you’re able to replace royalties from record sales with the royalties from streams,” drummer Patrick Carney told VH1.
As Spotify currently operates, it takes about 64 streams to equal one 99-cent iTunes purchase, according to a recent Billboard study. Even users who pay for the service with unlimited or premium accounts are still only making up for a fraction of the potential revenue an artist could be pulling in.
“For a band that makes a living selling music, it’s not at a point where it’s feasible for us,” Carney continued.
One data point does not a trend make, but still, it doesn’t bode well.
I wonder if this means that, soon, being a full-time or “career” musician will become unattractive, (even more so than it is now) deterring “market entry” for vast numbers of aspiring musicians?
And if so, wouldn’t humanity be poorer for that?