Laura Brehm strummed an acoustic guitar as a singer-songwriter before finding success as a featured vocalist on electronic dance-music tracks — a gig that has brought her international work and tens of millions of plays on services such as Spotify and YouTube Music.
But even as music-streaming revenues are projected to hit $23 billion this year — an increase of 50% over 2020, or $3.3 billion, according to a Statista survey — the Colorado musician will see only a fraction of the money that her work generates.
“There are so many splits involved,” said Brehm, 30, last month via phone from her one-bedroom apartment in Louisville, where she recorded and streamed live shows in 2020. “It gets confusing because there’s a producer, songwriter and vocalist, then there’s the label distributor and the streaming service. They all take a fee.”
However, 2020 was also the first year Brehm was able to financially support herself solely from music streaming revenues, reaching 116 million total streams on Spotify, the service she’s invested in most.
“I had about 150,000 daily streams on average, and that didn’t even include the tracks where I’m a ‘featured artist,’ ” said Brehm, who declined to say how much money she made. “But growing my fan base is what it’s all about right now.”
Streaming is how an increasing number of people listen to music these days, with hundreds of millions of paid subscribers on leading platforms such as Spotify, Apple Music, Amazon Music and Deezer. It’s also become an essential service for artists, some of whom have skipped the industry’s dues-paying ladder (touring, management, etc.) and jumped right into a fan base.
But most musicians are at the mercy of streaming services. They and their management strive to add each new single to “editorial playlists” that reach millions of potential new fans. Artists who hail from and live in Denver — such as Illenium, The Lumineers, Nathaniel Rateliff and Ingrid Andress — have helped grow these streaming services with their art. It’s only fair to pay them commensurately, right?
Music streaming platforms do not share their revenue formulas publicly, but industry estimates range from $0.003 to $0.005 per play. At that rate, a song needs a minimum of 250 plays to make $1. It took millions of those plays for Brehm to approximate a living wage in 2020, thanks to both paid users (spending roughly $10 per month on these services) and free users (watching ads between songs).
That has led her and other Colorado artists to wonder: Is there a better way? Streaming’s complex revenue model remains opaque to most. Despite becoming a vital income source for some musicians in recent months, it remains a thin financial bridge for others.
“We were not able to make a living on streaming last year,” said Alaina Moore, singer and co-founder of the Denver indie band Tennis. “The only thing that changed is that we lost touring.”
Tennis, which has released five critically acclaimed albums since 2011, is one of the lucky ones, Moore said. She and husband/guitarist Patrick had already established Tennis before the pandemic. Having released their last couple of albums on their own label, Mutually Detrimental, they also had socked away enough cash to ride out the last few months.
But if this had happened two years ago, Moore said, it would have ruined her and her husband’s careers — particularly since Tennis released its new album, “Swimmer,” on Feb. 14, 2020 — less than a month before all touring was canceled. Moore estimates the band spent between $70,000 and $90,000 on engineering, production and promotion for “Swimmer.”
“Streaming can’t even approximate what we made from touring,” she said when asked about recouping those expenses, despite the fact that the band’s new album has produced 21 million plays on Spotify. “There’s absolutely no way a band like ours could survive on it. … We don’t even know what we get paid (from streaming), which blows my mind. As a musician, I can’t think of another industry where you can’t price a manufactured good, or even know how to price it.”
“I used to think about boycotting (streaming), because the label is usually taking a big cut,” said Wesley Schultz, lead singer for Denver’s The Lumineers, which has about 12.5 million monthly listeners on Spotify and enjoyed nearly 60 million plays between mid-January and mid-February. “But over the years, it’s gotten better. The amount of people listening, the volume, makes all the difference. There’s a chance here to make a musical middle-class and provide a living wage for musicians.”
Record labels (which used to hold all the power) and streaming services (which are taking over as the de facto industry dealmakers) are not rushing to change the system, said Jeff Price, a New York-based copyright expert. Price went from running an indie-rock label in the 1990s and early 2000s — SpinART, which featured The Pixies and Denver’s Apples in Stereo — to becoming an evangelist for equity in the streaming world.
“Even the people who are supposed to know it — the lawyers, attorneys and collections agencies — don’t know what the hell they’re talking about,” said Price, the former CEO of TuneCore and Audiam. “You just have to follow the money.”
Doing that led Price to the same frustrations artists have found. His explanation of how streaming revenues work is a 50-page document larded with industry jargon and flow charts. Passages detail the separate licenses required for lyrics-and-melody (the songwriter) and the recording of the song (the performing artist), as well as the head-spinning differences between U.S. copyright and the rest of the world (the U.S. is generally better about paying artists).
“How the hell does a musicians’ organization in England or Japan represent a 16-year-old songwriter in Denver?” he said. “And yet, that’s the current model.”
For artists just starting out, like Evergreen’s Nick Reid, streaming has delivered thousands of fans who he wouldn’t have found offline. His single, “You,” has been streamed more than 71,000 times since it was released in November on Spotify. Based on that, he’s been contacted by producers with Interscope, UMG and Republic Records, he said.
“I use a distributor that pays me every month, but some can take up to three months,” said Reid, 16. “For me, it’s been about $200 a month, up from $50 when I started. I’ve been using the artist tools that Spotify provides and looking at my analytics very closely.”
That’s essential as artists increasingly lean on streaming sites as one-stop shops, said Spotify’s Sam Duboff, director of creator-product and brand marketing.
“We have over a million artists and their teams using Spotify for Artists every month,” he said, noting the profile-managing and video software, ticketing links and other tools available to those who “claim” their Spotify profile. “The goal is to give them direct access to tons of streaming data and help them grow their audiences, and we dropped everything at the beginning of the pandemic to do that.”
Last year, about 6,500 artists who released music for the first time on Spotify crossed the 100,000 monthly-listeners mark, or 180% more than in 2019. While that’s a significant milestone, it’s only about one-tenth of a percent of the more than 3 million artists the service admitted to hosting in 2018 (it’s likely much higher now). Last year, 90% of the streams on the service were shared among 43,000 artists, according to Spotify.
“All of its royalty money gets virtually dumped into one pot, from which artists are paid according to their share of all streams on the platform,” Rolling Stone reported. “So if a group of artists is getting 90% of the streams, they’re also getting 90% of the money.”
Companies have little incentive to untangle the financial mess of streaming royalties, Price said. Artists and managers of big acts often can’t be bothered, since streaming revenues pale in comparison to a big show or festival payday. And music fans cannot be expected to know or care about the legal intricacies, given the convenience of the current system.
“Spotify has market capitalization north of $40 billion, but has never made any money,” Price said. “The retail world made money by selling music, and now all these other places can use it as a loss leader to drive market share. Streaming companies are getting far more value from these artists than the artists are from their own music.”
If that all sounds divorced from the creative spark that drives art, it is. But there’s hope in emerging, user-centric models from companies like SoundCloud, which route royalties directly to artists. For Colorado artists like Brehm, who’s prepping a new solo album for release this summer (in part to retain all copyrights), there’s little choice but to forge ahead.
“Getting on a big Spotify playlist can start a career for an artist right now,” she said. “When I was a teenager and first started releasing music (in the mid-2000s), major labels had all the power. Now, it’s in streaming. But I had to build all this up, and now it’s about keeping that momentum going.”
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