What you need to know
- One industry boss has suggested platforms like Spotify and Apple Music should offer songwriters shares in their companies as compensation.
- Josh Gruss of Round Hill says grievances and disparity of income could be better addressed if interests were more closely aligned.
A music industry boss has proposed giving shares of streaming companies like Apple and Spotify to songwriters to help address income disparity in the industry.
From The Telegraph:
Streaming platforms should offer shares to songwriters to address concerns about a mismatch in earnings across the industry, according to a music investment fund boss. Round Hill chief executive Josh Gruss said anger over the disparity between huge revenues for Spotify and Apple Music compared with incomes for many songwriters could be addressed if their interests were more closely aligned.
Gruss said that the platforms were "mandated with creating value for their shareholders", so the platforms would have to convince shareholders that such a move would, in the long run, improve a company's relationship with artists, reduce criticism and ultimately help the share price:
"They would have to be convinced by something like that, but it would go a long way to having them on the same page and aligning their interests together."
Record labels and songwriters are clamoring for a better and fairer distribution of streaming revenues and royalties. From the report regarding UK artists:
Spotify reportedly pays a songwriter an average of 0.04p per stream, meaning it would take 175,000 streams for one to earn £70. A study by the Ivors Academy and the Musicians' Union found that about 80pc of songwriters earn less than £200 a year from streaming. American songwriters were given a lift in 2018 when the government-backed Copyright Royalty Board ruled they were entitled to a 44pc increase in royalties. However, the decision to increase the rate from 10.5pc to 15.1pc has been fiercely contested in the courts by Spotify, Amazon Music, and Pandora.
Gruss further noted how Apple and Spotify have "humongous" lobbying efforts, and that professional songwriters were hamstrung by not being able to go on tour like artists can stating "There's nothing really else for a songwriter to fall back on – and that is where I think the inequity is."
