By now, we are all well aware of the recent controversy involving Taylor Swift posting an open letter to Apple, pleading with them to change their policy of artist compensation during the three-month free trial of their new streaming service Apple Music. We are probably also aware of how within the matter of a day or so, that plea reached the attention of Apple’s Senior Vice President of Internet Software and Services, Eddy Cue and resulted in Apple seemingly changing it’s stance and agreeing to pay artists during the trial period. On the outside Taylor Swift looks like the white knight who championed a battle of pay for play politics, having the backs of independent artists world over. In reality there may be something a bit more sinister (or at least a lot less white knight-ish) under the surface that could effect not only the music industry, but artistry in general and not all in good ways….
It’s no secret the music industry has been evolving over the course of it’s inception and even more drastic within the last decade. Downloads make up around 70% of music purchases world wide and in the center of that is iTunes. To truly understand how iTunes has changed the music industry, you will have to take a look at how the money is distributed through sales. Generally speaking, the average album is sold at $9.99 per download. Out of which Apple takes a standard 30% cut at around $3.50. Assuming you are signed to a major label, one of the Big Three (Universal Music Group, Sony Music Entertainment, and Warner Music Group) they would be taking the biggest share at 53% approximately $6.00 leaving the artist the remaining percentage, roughly $1.00 give or take. To some, that download model sounds outrageous! How can an artist survive while making only a single dollar for every album download? It’s how the industry has always been. Sure there have been artists out there who have negotiated deals better and worse, but for the most part, that’s how it works being signed to one of those major labels.
It can be argued that most artists or bands on major labels are making their money through live shows. Swift’s Red tour made over $150 million at the box office alone! Put that with her merchandise sales, and endorsements, it’s easy to see why she is currently one of the highest paid artists in the entertainment world. Her latest album 1989 has already sold nearly five million copies, so even with just that one album alone, she has made over $5 million from the digital iTunes model! However, selling that many downloads would only be achievable with a decent label push. Swift’s label ironically titled, Big Machine Music distributes all of their music through Universal Music Group, who in turn along with Sony and Warner, control exactly what’s played on radio across the country. Opinions aside, getting air time on radio is a make-or-break aspect of success in the industry regardless of how good or bad you are.
It’s hard to believe that in the age of internet, YouTube, Sirius XM, and iTunes, radio is still relevant and the easiest way to establish an artist relatively quick and cost efficiently. What you may or may not know is, the radio is owned by only a few corporations, and what’s played on the playlist of these corporations, is decided by the The Big Three. Without the promotional push of these major labels, it is virtually impossible to get played on any major radio station. Unless Sony, Warner, or in Swift’s case, Universal, says so it’s not going to happen. While that sounds like an unfair absolute, it’s the cold hard reality of the music industry. However that could change thanks to streaming services such as Spotify, Tidal, and now Apple Music. With these streaming services, it opens up a whole new world of artist discovery. You can listen to artists big as Taylor Swift one minute and the very next song in the playlist can be someone very indie like Vamptones. With Apple Music, if you like an artist you stream, you can directly go to the iTunes store and purchase the album with the simplicity of one single click. With access to so many songs from so many artists big and indie, it sort of makes the The Big Three obsolete!
That also opens another can of worms though. Compensation. Even without a major label, an artist will only make a percentage of each song purchased through iTunes. But just how many songs are paying subscribers willing to actually purchase? If the average kid is spending ten bucks a month on a service to listen to any of the 20 million plus songs on Apple Music, at any given time, there is no real need to buy any record ever again. A new model of compensation must be implicated and that’s where waters get even murkier. How can artists make money if no one is buying their music? Streaming services do in fact pay artists for each stream but it can range anywhere from $0.01 per stream, or in most cases a deal so low, a song must be streamed over one hundred times to make that $0.01!! How’s THAT for a business model.
Now this is where Taylor Swift comes riding in on her white horse, being a voice for artists not only like herself but also indie artists, cutting their teeth in the music business. Apple offers a three month free promotional period for new subscribers and apparently at first, meant that artists weren’t getting their already pathetic share of the streams. I applaud her for her stance on this issue. It’s not right for musicians, artists, producers, engineers etc to work tirelessly on projects and not get a single penny for months! Within 72 hours of her initial open letter, Apple agreed to compensate artists during the trial periods, but at what cost? Even if a kid listened to “Blank Space” a total of 150,000 times, Taylor would only be getting around a buck or two. An indie artists probably even less. No matter how low that fee is, Apple is still compensating the artist. So technically there is no more argument on the grounds of being paid but just how much that compensation covers, is an entirely separate negotiation. Without the support of a major label, who will speak up for the indie artist during those particular negotiations? Labels like Big Machine Music, although labeling itself as independent, could be seen as one of the big three for this new format. They are powerful enough with industry connections to negotiate better deals for their artists, among streaming services. But that still leaves truly independent artists out in the cold where could be even harder than before to get the exposure they deserve.
It’s been debated whether or not this Swift vs. Apple controversy is a calculated PR stunt for both Swift and Apple. It would make plenty of sense, seeing Swift gets the approval of looking like a hero in her already powerful do no wrong public image, but now she gets to be seen as sort of a voice to artist big and small. This is a big win for Apple in a relatively new piece of the industry puzzle. Being a hot topic and righting a wrong in the eyes of artists, could be just enough to give them a head start in the pool of other streaming services. As an independent musician myself, I’d be willing to give my money to the corporation who treats the artists the fairest. Apple is a name everyone knows and for the most part, trusts and their stance on artist compensation could be a deal breaker against services such as Spotify (who Taylor has had similar controversies with in the past)
The music industry is on the cusp of yet another evolution and major corporations are becoming less and less relevant in the grand scheme of things. Streaming services like Apple and Spotify may be responsible for the inpending death of those major labels and making indie labels like Big Machine Music even more powerful in the digital world. If that’s the case, wouldn’t that eventually make them just another group of corporations like those used to own the music industry? An indie artist negotiating streaming compensation is no different than negotiating for royalties with radio gatekeepers like Universal, Sony, and Warner. With that said, perhaps instead of a voice of hope for artistry and fairness, maybe Taylor Swift is a sort of harbinger of death to an already dying industry? Or at the very least, an accomplice. The future is looking bright in regards to how audience listen to music, and bright for streaming services like Apple, but sadly, bleak for legitimately indie artists.
Aaron (or Coop) is a freelance writer, multi-instrumentalist and overall lover of all things music. As an advocate for indie record labels and artists, he is passionate about local scenes and do-it-yourself artistry. If it’s good, it’s good. If it’s bad, he’s not afraid to explain why.