Grammys vs. Streaming Services, Round 2
For the second year in a row, Neil Portnow, the President of the Recording Academy, used the Grammy Awards as a platform to condemn free tier music streaming services. Last year, Portnow took the Grammy stage, joined by Grammy-winning artist Jennifer Hudson. Portnow and Hudson introduced a group called the Creators Alliance, which is a group designed to lobby for fair pay for artists.[1] Members of this advocacy group include Alicia Keys, Adam Levine, and Lady Antebellum.[2]
Portnow and his supporters argue that in the future, artists will stop making music because they will be unable to earn enough to make a living. The goal of this campaign is to make sure that artists across all platforms are paid fairly. While it is unclear how exactly the Alliance is going to accomplish its goal, public pressure seems to be a key ingredient. Most notably, Taylor Swift took a very public stance against streaming services like Spotify claiming that streaming is bad for artists.[3] The argument that Swift and others put forth is that instead of purchasing an album for $12, Spotify users can listen to the entire album for free with minimal ad interruption.[4] For example, Aloe Blacc, who co-wrote and sang the hit song “Wake Me Up,” earned less than $4,000 domestically, a wage he claims is not livable.[5]
So are Taylor Swift and the Creator’s Alliance right? Are streaming services really bad for artists? First, we should understand the different types of streaming services. Services like online music store such as iTunes, and non-interactive services like Pandora, are not as problematic than interactive services like Spotify. The distinction is that non-interactive services only have to negotiate with the groups that own the rights to the music because the listener doesn’t have the power to choose a specific song. Spotify needs to negotiate separately with each label because users can choose what they want to listen to next. These negotiations, and the pay-outs from Spotify to artist are extremely complicated.[6]
In his speech last night, Portnow, who was joined by Common on stage, claimed that artists and everyone who helps to create their music earn a fraction of a penny from streaming services like Spotify.[7] Portnow acknowledged that technology such as streaming services connect users to the music they want to listen to, but cautions that we need to make sure artists live in a world where making music is a viable career.[8] Common thanked fans who support artists by going to concerts, subscribing to music services, or who speak out for artists’ rights.[9] All signs are pointing to a future where fans have to pay for a subscription service as a way to stream music,[10] a solution that Portnow and the Alliance believe is the way to make sure artists are incentivized to create music.
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