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Streaming royalties are broken, Rashida Tlaib thinks Congress can fix them

There’s never been an easy time to be a musician, but for many in and around the industry, the 21st century has presented one calamity after another for those hoping to make a living through music. The turn of the century saw record labels implode at a staggering rate, and it would be some time before some salvation arrived in the form of streaming services, which finally offered an effective method to monetize music listening.

Examined in the harsh light of day, however, a major question emerges: Who, precisely, do these services benefit? According to the Record Industry Association of America, streaming comprised 83% of all recorded music revenue in the U.S., as of 2020. Calculating the amount of revenue an artist makes per stream can be a complex task.

Different rights holders strike different deals, and you’ve got a lot of cooks vying for that money, including publishers, distributors and labels. The commonly accepted figure for Spotify is that somewhere between $0.003 and $0.005 is paid out to artists for every stream. The figure varies widely from service to service, though it’s generally fractions of a cent. Apple, notably, revealed last April that it pays around a penny per stream — a generous figure by streaming industry standards.

Revenue rates have, of course, been a common complaint among musicians for more than a decade, but like so many other labor issues, things have come to a head during the pandemic. Two-plus years of limited or no touring have brought concerns into sharp relief. In late-2020, the Union of Musicians and Allied Workers (UMAW) launched the Justice at Spotify campaign to raise awareness of the issue.

“With the entire live music ecosystem in jeopardy due to the coronavirus pandemic, music workers are more reliant on streaming income than ever,” the org noted at the time. “We are calling on Spotify to deliver increased royalty payments, transparency in their practices, and to stop fighting artists.”

The union would ultimately find a sympathetic ear in Congress in the form of Michigan Rep. Rashida Tlaib. Last week, reports surfaced that the congresswoman was putting together a resolution aimed at establishing a royalty program to provide musicians adequate compensation via royalties on per-stream basis. “It was a meeting with the Union of Musicians and Allied Workers,” Tlaib tells TechCrunch. “One of the things that continued to come up was what could Congress do in supporting their efforts to be protected and also for musicians to be fairly compensated for their work. To have respect in this field, especially from so many folks in the industry that continue to monopolize and so forth. They did an amazing job, came to us with this proposal and taught my team and I so much about the ins and outs of how it works right now.”

Tlaib says her team worked closely with the UMAW on penning a draft of the resolution. “We do the same thing with our housing bills, trying to address economic divide in our country. We let them lead us. I’m working for them, helping them and advocating on their behalf. They’re teaching me so much about the monopolization in the industry, and how Spotify specifically is acting in bad faith in many ways.”

Musician and UMAW member/organizer (and musician/newsletter writer) Damon Krukowski said in a statement to TechCrunch:

Currently, music streaming is building wealth for streaming platforms at the expense of musicians. UMAW is working to redress that imbalance. Rep Tlaib’s proposed legislation would guarantee a minimum payment from platforms direct to the musicians who play on streamed recordings. The infrastructure for such payments already exists, because they are already required of satellite radio. This same principle needs to be applied to streaming, for fairness and for the sustainability of recorded music.

Tlaib’s resolution would employ the nonprofit royalties group SoundExchange, as well as the Copyright Royalty Board, to calculate and distribute royalties. The two bodies already serve a similar function for webcasting and satellite radio. This would, effectively, operate under a complementary model, tailored to streaming.

With news of the resolution surfacing in late July, word has gotten out around the industry. Tlaib said she’d not yet spoken with Spotify directly, explaining, “I understand they’re aware.” She adds, “My priority is not the corporations. It probably never will be. They have their lawyers, they have their lobbyists, they have their resources to put out ads and gaslighting people to say all the things they say will happen when we continue to push this thing forward. My priority is that is doing everything right and is not being traded fairly in this market.”

TechCrunch reached out to Spotify for the story, but has yet to receive comment. CEO Daniel Ek made waves in the past for suggesting that the streaming model simple couldn’t — or wouldn’t — support musicians as record sales had done in the past. “Some artists that used to do well in the past may not do well in this future landscape,” he said in a July 2019 interview, “where you can’t record music once every three to four years and think that’s going to be enough.”

Tlaib’s resolution has begun to pick up steam among House colleagues. Most recently New York Rep. — and fellow Squad member — Jamaal Bowman has lent his support to the draft, which is still waiting review by the House Legislative Counsel.

Tlaib tells TechCrunch she believes such legislation could also gain bipartisan support in Congress.

“I think what happens is folks don’t realize that many of the people impacted by what’s happening are in all congressional districts. I don’t think you could go to any district that either isn’t impacted by it or doesn’t understand how incredibly unfair it is. I know that we’ll be able — especially with the work the Union of Musicians and Allied Workers is doing outside of Congress — to make this a viable piece of legislation.”

Tlaib’s own district — which includes Western Detroit — can certainly lay claim to that impact.

“Detroit is a global music capital in the world: Motown, techno, jazz, gospel. I wanted to honor that, and respect that incredible work, which played a huge role in movement work,” she said. “Music has been a huge part in my growing up in the social justice movement. It was a way to bring folks together in trying to understand not only the human pain, but the possibility of ‘better.’ When I think of these amazing musicians coming together like this, it’s incredibly inspiring. And why not? Why don’t they deserve Spotify and other major folks in the industry to pay them what they deserve?”

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