Thursday, August 06, 2015


This article originally appeared in the 7.6.15 issue of Metroland.

I’ve criticized the always-fascinating David Byrne in the past for some of his public proclamations about the music business.  In 2006-2007 he was wondering aloud whether record companies were necessary in the digital age, which is a good thing to wonder about.  He spoke intelligently about various alternative business models, and was an early innovator in using the internet to connect directly with his fans.  As with his music, he wasn’t afraid to try new and different things.  Some things work, some don’t.  That’s how art and business move along.

            In 2012 he complained about record companies sticking DRM (digital rights management, digital goo that keep consumers from transferring files around their devices and to their friends) on his music, claiming he shelved an album for over a year until his record company agreed to release it DRM-free (These days most every digital file you buy is DRM-free; the record companies after a decade of clownish and despicable behavior, have quietly given up, for now).

            Then, in 2013, he got weird, not in that charming David Byrne weird way, but in a post-modern “got offa my lawn” weird way.  He pulled much of his catalog off of Spotify, which at the time had been available in the US for barely a year.  In a bizarre op-ed in The Guardian he announced that “the internet will suck all the creative content out of the world.”  What?

            Last week the New York Times ran another Byrne op-ed, and I thought uh-oh.  Turns out he nails it, it’s worth reading, and it focuses on the Big Problem in the music biz today.  And that’s the total lack of transparency in how money gets to artists with streaming services.  In order for Spotify, the new Apple Music (which appears to be failing), Jay-Z’s Tidal (which is failing) and the rest of the streaming services to get major label catalogs, they’ve had to shell out hefty advances and give away large chucks of their companies, or at least large chucks of their profits, to the major labels.  How big, how much?  We don’t know, because the agreements are confidential.

            Byrne, to his credit, doesn’t blame the streaming services for this, like so many other artists have done.  He actually says nice things about Spotify.  Instead, he blames the labels, who have a history of being greedy and corrupt, and who haven’t changed their stripes in the digital age.  The services needed to leverage their companies and profits to get the major label’s back catalogs, otherwise it would be game over.  But did these huge advances get shared with artists, and if they did, how? Spotify famously claims that 70% of its revenue goes to rights holders as royalties, but in most cases the rights holders are record companies.  How much of that gets to the artists?  Despite numerous lawsuits that have found that some artists should get 50% of the record companies’ share, it appears many artists are getting the 15% or so they got under traditional record contracts.  Which made sense when the record companies manufactured disks, printed sleeves, stored them in warehouses, and trucked them to stores.  It makes absolutely no sense today, when all the record company has to do is transmit a digital file to Spotify, Apple, etc. and then sit back and wait for the checks to arrive.

            And how about the money the companies get from their equity stakes in the streaming services?  How much of Spotify’s 30% goes back to the record companies?  Isn’t this, in a very real sense, double dipping?  For me, Byrne’s penultimate question was this: Why was it up to Taylor Swift, and not the record companies, to demand that Apple pay royalties for the three-month free streaming period?  What was the labels’ stake allowing their artists’ music to be given away?

            And there’s YouTube, which you might be interested to know is by far the biggest portal of streaming music in the world.  How much of their ad revenue goes to rights holders, and where does that money go?  We don’t know.

            And then there is the significant inference that the major labels, with all their bargaining power, are undoubtedly getting a better deal than independent labels and individual artists trying to slog through the digital new world.

            Byrne lists his efforts to find out, and this would be comical if it weren’t so sad.  Doors slammed in his face, calls unanswered.  Turns out much of what we know is from leaks, including the big Sony leak from last year.

            I get royalty statements for my band.  Five years ago it was pretty clear what they meant—we sold x number of downloads and got y dollars for it.  Now I get statements showing pennies here and there from this service and that service, some I’ve never heard of.  I just got a check in the mail for 3 cents.  Dunno what the hell that’s about.

            And of course the labels are to blame.  Meet the new boss… same as it ever was.

Paul Rapp is an entertainment lawyer and musician who lives in the woods and needs a damn good reason to come out.


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