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Billy Bragg Says Don't Blame Spotify; Blame The Record Labels

from the there-we-go dept

There's been so much misguided hatred towards successful internet music services lately, with the main targets being the most successful: Spotify and Pandora. Could those services be doing better? Yes, absolutely, but so much of the the hatred seems incredibly misplaced. Here are services that are actually paying artists, and that have built platforms that millions upon millions of people love. Many of the complaints about the "low payout" numbers involve people totally misunderstanding the data as well. But there's also been one elephant in the room which hasn't received as much attention: Spotify and Pandora pay the record labels, since they hold the copyright. Often, a big part of the problem is that the labels then do everything to avoid paying the artists.

In the past, I've disagreed with singer Billy Bragg's view of internet services, but this time around, he's right: in many cases, the real problem (yet again) are the labels and not these services. He's written a detailed Facebook post explaining this position, noting that complaining about Spotify is like "campaigning against the Sony Walkman" when it was first introduced. Going against what music fans want is never a good strategy.

From there, he gets to the real issue: how the labels account for streaming revenue:
The problem with the business model for streaming is that most artists still have contracts from the analog age, when record companies did all the heavy lifting of physical production and distribution, so only paid artists 8%-15% royalties on average.

Those rates, carried over to the digital age, explain why artists are getting such paltry sums from Spotify. If the rates were really so bad, the rights holders - the major record companies - would be complaining. The fact that they're continuing to sign up means they must be making good money.

Here in Sweden - where I'm doing a show tonight in Malmo - artists have identified that the problem lies with the major record labels rather the streaming service and are taking action to get royalty rates that better reflect the costs involved in digital production and distribution. UK artists would be smart to follow suit.
Of course, there have already been lawsuits about similar issues, related to legacy contracts. You hopefully remember Eminem's big lawsuit over whether or not digital sales count as licenses or sales, since "licenses" involve a 50% cut, while "sales" are more like 10 to 15%. As the Guardian article notes, there are some labels that do in fact pay a greater percentage on streaming deals, as they should, but many legacy artists are locked into bad contracts. And, of course, there's always the issue of how well the labels actually handle their accounting, and the way they play games to make sure artists never "recoup," making it difficult to get any royalties.

The internet services definitely can do more to help artists, but much of the blame often seems misplaced, so it's great to see someone like Bragg recognizing that.

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  1. icon
    fogbugzd (profile), 8 Nov 2013 @ 12:56pm

    I have been wondering how the statutory return of copyright to the artists is going to play out with online services. Even if an artist decides to stay with a label it will provide an opportunity to renegotiate rates for digital distribution.

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, 8 Nov 2013 @ 2:07pm

    as stated, if the deals were bad, the labels wouldn't keep signing up. they are getting a damn good deal, but it's still not good enough for them so they keep the artists share, which has been paid to the labels as well. this is where the problem lies. the labels hang on to the artists share for as long as possible, in some cases, not paying out at all until forced by court orders. they make a big play, blaming the services when in actual fact the services have done their bit right from the word go. unfortunately, as we well know, the labels are very good at the passing the buck, so the artists think the labels haven't been paid and go to all out war with the services!
    the other problem seems to be that when new services try to start up, the labels want such extortionate fees, the service stops before it gets going. that means that neither the labels nor the artists get paid. this is exactly what the labels want, because they then keep a tighter rein on the artists work and ultimately, the control they do almost anything to keep.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, 8 Nov 2013 @ 2:17pm

    Honestly I am having a hard time having any sympathy for those musicians there.

    Still I am shocked that one of them stopped to think about where the money is going, I didn't think they had it in them to find out on their own.

    reply to this | link to this | view in thread ]

  4. identicon
    any moose cow word, 8 Nov 2013 @ 3:22pm


    Exactly. And the few that did manage to flourish in spite of all attempts by the labels to whack them down with high fees and uproot them with ridiculous lawsuits are still forced to be as unprofitable as possible, just to make sure that these upstarts can't get enough standing to pay artist directly. Given that the legacy recording industry has little purpose in the digital realm beyond producing the original recordings, they can only remain relevant by extorting would be competitors and stealing from everyone else to buy more corrupt laws in order perpetuate their existence.

    reply to this | link to this | view in thread ]

  5. icon
    PaulT (profile), 9 Nov 2013 @ 1:38am

    "If the rates were really so bad, the rights holders - the major record companies - would be complaining. The fact that they're continuing to sign up means they must be making good money. "

    Yeah, that's always been my thought. In fact, why the hell would major labels sign licences agreements in the first place if they only stood to get ripped off, as Thom Yorke would have us believe? All it would take for Spotify's mainstream appeal to collapse is for a couple of major labels to leave, yet there they are...

    It's a shame that some people are so happy to remove any potential revenue from that service just because they don't think they get enough, but there's 2 sides to any licence agreement, and even if Spotify are an elephant in the business now they sure as hell were not when these licences were being ironed out. Somebody is profiting, it's time to look at the real "grifters" doing so.

    reply to this | link to this | view in thread ]

  6. identicon
    Jennifer, 10 Nov 2013 @ 4:55am

    This is what I've been thinking since the beginning of this controversy. And the labels are sneaky, getting in there and complaining about it too when really they're the problem but they don't want anyone to focus on that. Labels have always been a little parasitic but in the past they had a bigger job than they do now. Personally, I'd rather know when streaming through spotify, or youtube, or torch music that the royalty money is going directly to the artist, where it belongs.

    reply to this | link to this | view in thread ]

  7. icon
    Ninja (profile), 11 Nov 2013 @ 2:31am

    The MAFIAA fucks up everything they touch till the point when they are dragged kicking and screaming to the future only to discover how to rip off the customers AND the artists with the new technologies. If I were Larry Page I'd be on a quest to obliterate the labels (for starters) by either assimilating them (direct buy) or making them go bankrupt (ie: helping lawsuits against them and other destructive processes) always while maintaining the looks as if everything was alright. Good for them I'm not him ;)

    reply to this | link to this | view in thread ]

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