Even though streaming has become the most popular way for people to listen to music, there is a lot of controversy surrounding the revenue that artists and songwriters receive from streams. For many musicians, hearing that millions of streams only bring in a few hundred pounds for the creators makes it unsustainable. This issue has sparked high-profile debates and calls for reform both nationally and internationally in recent years.
The Problem of Revenue from Streaming
Streaming services like Spotify, Apple Music, and YouTube generate huge profits, but the distribution of those profits is very uneven. The platform typically gets around 30% of streaming revenue, with the remaining 70% going to recording owners (labels) and songwriters/publishers. Labels typically get the largest portion of the revenue. This suggests that artists often get pennies on the dollar per stream, especially independent artists. Numerous musicians have expressed their views, contending that the current system disadvantages artists in favour of big labels and tech companies. For example, well-known musicians have threatened to remove their catalogues from streaming in protest of low royalties. The frustration in the UK reached a breaking point when a 2021 parliamentary investigation revealed that a “complete reset” was necessary to reward songwriters and performers fairly.
Responses from the Government and Industry
The UK investigation put pressure on the government and industry to address streaming royalties. In response, a number of voluntary changes have been made by music companies. Due to major labels’ announcement that they would disregard unrecouped advances for many legacy artists, a number of veteran musicians now receive streaming royalties even if they have not paid back their prior record advances. The industry also agreed on a new code of practice to increase transparency, which will give artists and songwriters more details about how streaming revenue is calculated and more lucid royalty statements. The “equitable remuneration” model, which would have distributed a portion of streaming revenue to artists through a collecting society in a manner similar to radio play royalties, was one of the major reforms that the UK government chose not to implement. Instead, the government encouraged the sector to continue voluntarily increasing wages and advancing equity and set up working groups to investigate possible remedies. This measured approach did not satisfy some campaigners, like the Musicians’ Union, who had demanded more aggressive action. But the issue is still very much on the agenda, and officials have left the option of reviewing the laws open in case industry efforts don’t work.
Worldwide Royalty Wars and Their Futures
The debate over streaming payouts is not limited to the UK. In the United States, songwriters and music publishers have been fighting to raise the legally required fees streaming services must pay for the use of their compositions. After years of litigation and hearings, U.S. regulators decided to gradually increase the percentage of streaming revenue that goes to songwriters (to about 15% of revenue). This was a significant win for composers, though they note that it is still a very small percentage compared to what record labels receive for recordings. There are other countries where experiments are underway. Some streaming services have investigated user-centric payment models as an alternative to the current pooled model, which favours megahits. Under these models, your subscription fee is divided only among the artists you personally listen to. Early tests (in nations like France) suggest that user-centric payouts could slightly benefit independent and niche artists, despite the fact that they have not yet gained widespread adoption.
As 2025 draws near, there is growing pressure on streaming services and labels to create a more equitable model. Artists and their representatives continue to negotiate better terms through collective bargaining, legal action, or public campaigns such as the #FixStreaming movement in the UK. If voluntary measures don’t work, many observers expect governments to pass laws to ensure creators a more fair share of the digital music market. During the reform process, musicians are advised to stay informed about their royalty statements, join advocacy groups if possible, and explore alternative revenue streams (e.g., merchandise, live performances, and direct fan support). The streaming revolution revolutionised music distribution; in the years to come, it will be determined if it can also be made to fairly compensate the creators who fuel it.
Michael Coyle is an attorney advocate with a master’s degree in copyright law. ACM, formerly a lecturer at Guildford School of Music and Solent University.
Michael.Coyle@lawdit.co.uk is his email.
