Drama is about on Twitter as many artists are beginning to speak up concerning their perception of internet advertising commissions. The typical CPM's (cost per thousand impressions/plays) is upsetting artists, such as below where Bette Midler roasts Pandora and Spotify for their poor royalty structures.
Artists should definitely receive more compensation than they are for their streaming plays on satellite, internet, and traditional radio, seeing how they are the material that is filling up the platform and drawing attention, all in the name of selling advertisement spots.
Midler states that over three months she saw a resurgence in popularity, where on Pandora alone she garnered over 4 million plays. Her compensation? Just over $100.
Over 4 million plays should undoubtedly earn the artist more than $115 bucks. You're touching the lives of a ton of people, who are then hearing some Taco Bell or Geico advertisement. Companies pay exponentially more for commercial spots on TV to reach half that many people.
Selling songs on iTunes and Amazon and fetching 30 cents per sale was insulting enough. We are choking the incentive to create art at this rate. While Ms. Midler should definitely strike while the iron is hot and launch a new tour (where artists have always traditionally gained the largest portion of their income), one of these companies should step up and offer exclusive deals for much higher commissions.
Perhaps Jay-Z and Aspiro will save the day?
Jay-Z, if you have it in your heart to pay fellow musicians more than $0.00002733076 dollars per stream, you can most likely add to your wealth in a major way. You'll have greats like Bette Midler, Thom York, Steven Tyler, and Taylor Swift all jumping ship in a heart beat to join your team. Padding your wallet in the short-term is not the way to growing true wealth, as Jay-Z knows. Save us, Jigga!
Now, in the name of fairness, we need to look at the other side of the argument. The internet is not the same game as TV and radio. The market has already adjusted itself in a way where it's ready to pay artists exactly what it's worth to put an advertisement between their songs. And that isn't worth much. People were getting spoiled on TV and radio licensing deals. Now, to flip back to the other side again, how much of the profit are Pandora and Spotify executives keeping when a portion of that should be being distributed to the artists?
According to information reported by Billboard.com, Pandora posted a $638.9 million dollars in revenue in 2013. It is stated that Pandora paid $342.9 million of that money in music royalties only. That sounds more than fair. They're paying themselves, their staff, and all of the server and bandwidth fees with half of the revenue. I see no problem there.
So the question really becomes "Since Pandora is obviously paying a large chunk of money, who's really holding all the earnings and giving artists the crumbs?"
I think we know the answer to that. *cough* record labels *cough* Somethings will never change. They've made it very obvious that they're only willing to lift a small number of artists into the lime light per year, and only because this enables them to generate billions. The message is clear to musicians. Forget the major label deals and grind it out independently.
There are tons of artists doing it big all on their own with their own labels and label mates they signed. This is enough to support their own tours and merchandise runs. The fact is, we don't need the big gatekeepers anymore. The internet blew the lid off of that. So if you're out there crying about streaming royalties, that's a sign you need to be out there actually working and playing shows. There's money to be had, if you know where to look for it.