The Dark Side of Streaming: Is It Fair for Artists?

The music industry has rapidly changed after the emergence of online music streaming platforms, as it has become a potential source of monetizing musical content and creating a professional career. However, there are a fair number of music artists who are also getting affected by the wide influence of streaming services. While it may seem beneficial for all kinds of music artists, only celebrity artists are able to generate a good amount of returns from the music streaming platforms such as SoundCloud, Spotify, Tidal, Deezer, etc, to name some.

On Spotify, music artists are getting paid less than one-tenth of a cent for every stream gained on the platform. Therefore, in order to get good amounts of earnings, the artists are required to generate millions of streams for each song, which is practically impossible for emerging artists who have just started their music careers. Spotify has not improved the payout for the musicians yet, even when they tripled the value during the COVID-19 pandemic. Evidently, among the handful of positive qualities, the streaming platforms also have some dark sides. Let’s take a better look at the aspects it is affecting the modern music scene.

Inequalities and Disruptions due to Online Music Streaming

    • Inequality in Revenue Distribution 

The biggest criticism regarding the modern streaming platforms is their flawed payout system, where music artists get a very small amount as monetization benefits for each stream. Low per-stream royalty is one of the major issues that has been flagged by most artists. While it can turn out to be a great amount for the celebrity artists who easily get millions of streams, it can get very difficult for the rising artists who still need to establish themselves. A music artist on Spotify gets around $0.003 to $0.01 per stream, and they are required to get millions of streams, like a famous celebrity, just to reach a decent wage. It gets even worse for the artists who work with record labels, as the label keeps 73% of payouts while the artists only get 11% of it.

The pro-rata system is used by most streaming platforms, where the platforms pool all the revenue generated and then pay the artists based on their market shares and total number of streams. It means that the majority of the revenue is gained by the superstars, which is further re-rolled to offer pay-out for the emerging music artists, and the amount of it is very little. Besides, payout for each stream is not equal in nature, and it keeps fluctuating along with it. It is said that stream from the paid users more value than a non-subscribed user, but every one of them is a music lover and a fan. The system is designed in a way that it benefits the biggest artists on the platform, while emerging and niche artists receive very little for their contributions. Some of the platforms, like SoundCloud and Deezer, have brought a change with a "user-centric" model where the subscription fee of the listeners will be directly paid to the artists they listened to, and that is a fair model for the independent artists as well.

    • Fraud in Music Streaming Sites

Just like streaming has become quite important for music artists, a lot of people in the market are also cultivating and offering a chance to farm streams. The automated systems and bot views are being widely used to improve the number of play-through fake streams. The fraudulent use of fake plays is risky, and it makes the artist prone to getting banned from the platform. In such a way, the royalties from the general revenue pool are extracted, and it stops legitimate artists from getting paid. There are also many fraudulent promotional agencies that claim to offer more streams for the artists from credible sources, but only provide bot-generated views. This can harm your music career significantly.

In this modern age of AI (artificial Intelligence), the authenticity of music creation is getting ruined by the lack of human effort and the wide use of AI-based tools. AI-generated music is trying to be part of the industry as well, and it has already become part of the music industry. As a result, the revenue pool, musical data, and the royalty system are getting distorted with the streaming platforms and their acceptance of AI-generated content. With a lack of verification, it has become easier for anyone to upload music, and that person does not necessarily have to be a music artist, either. Therefore, inauthentic music uploads have also become a major issue that occurred due to streaming.

    • Loss of Identity and Manipulation of Algorithm

The evolving music ecosystem is offering new avenues of income and creativity for the rising artists, but it is also getting more difficult in this highly competitive digital landscape. Music artists are currently studying the promotional practices that can help them spread more awareness for their music. The key here is to become a part of the algorithm so that it pushes forward the rank for search engine result pages (SERP). The streaming platforms usually utilize a complex algorithmic system that offers exposure to new songs or not. The power of playlists is not unknown to anyone, and getting featured in curated playlists can help to gather organic exposure from like-minded listeners. However, the mix of playlists can also use human-curated playlists in order to promote and recommend music. Therefore, an artist is required to make consistent approaches to get featured in these playlists, which allows improving their income as well as discoverability.

There is also a situation of unfair competition as popular music labels can use their relationship with the streaming platforms in order to push artists forward who have signed and are working under the label. They make sure that their artist can get a feature on the prominent playlists, which offers them grand exposure among the listeners. However, a smaller and independent artist will struggle in this phase due to the lack of a network and money.

    • Lack of Artistic Freedom and Transparency 

The streaming culture has also given birth to a potential viral culture where a music creation does not always have to be good in order to gain major attention. The wide influence of short-form content is noticeable everywhere, especially through social media platforms like Facebook, Instagram, YouTube, and TikTok. In modern days, many songs and portions of a track are being utilized in user-generated content, and then it is followed by other users as a trend. This trend can quickly make the artists famous as thousands of users are getting to know about the track, and when they are listening to the full track, it adds a stream. The biggest flaw of this trend is that any song or music can go viral regardless of the artistic quality, and even old songs are getting hit again, but the new artists are not getting ample chances.

Another major issue is the lack of artistic freedom, where any kind of musical work is considered a song or a full-fledged track, whereas it is not.  The standard for good music is falling rapidly, and there is repetition in the pattern of creation as artists are following the viral trends in order to get famous, but they are only supposed to embrace their individuality. Just like radio-friendly pop tracks in the early days, modern artists are making stream and internet–friendly songs which can be used as a background score to some user-generated content and the lowest point of creativity for a music artist who has honed the skills after years of practice.

The lack of transparency is also widely visible in the music streaming industry since there are many conflicting incentives, too. There are various stakeholders, labels, and streaming services in the industry, and they often come up with conflicting needs that are misaligned. The lack of transparency and hidden charges makes the independent artists skeptical, and they are more likely to handle it alone than to ask for help. It is safe to say that streaming services have made the industry self-dependent, but have not offered any chances to grow further. The non-disclosure agreements that take place between streaming services and rights holders have made it difficult for the artists to understand where their money is being taken or what fee they are paying for. Pricing and royalties are still a mystified zone.

Final Thoughts

It is evident that streaming services have brought a dark age for music artists, but it is also through those streaming services that all the artists and listeners come together from around the world. Online platforms with algorithmic suggestions have also improved the music listening culture for global music. Undeniably, the industry has become quite competitive, and so are the streaming platforms. Artists need professional help to navigate through this phase rather than losing hope. Streaming platforms will stay, and it is your duty as an artist to understand the current music landscape.