The music streaming business has got a lot of attention in the past few weeks with the introduction of new players such as Tidal — a company that puts artists in control of the valuation of their music, and not at the mercy of the streaming giants.
Streaming companies such as Spotify and Pandora have quickly come to the defense of their revenue models, releasing figures from what they have paid in royalties and claiming that without streaming platforms, consumers will return to piracy — leaving the entire royalty system at risk of collapse.
As a songwriter, I find this to be an offensive and inaccurate argument. The antiquated consent decrees — which govern how the American Society of Composers, Authors and Publishers and BMI license music, and subsequently has confined songwriter royalties to less than a market rate and enabled streaming companies to enjoy billion-dollar revenues at our expense — has the state of American songwriting on the verge of its own collapse.
I’m fortunate to have the opportunity to earn a living off other revenue streams, such as concert tours and merchandise. But for my fellow songwriters, whose craft is focused on the powerful written word, music license royalties are their sole source of income.
In most industries, the value of something increases with demand. The more people who want your goods or services, the higher the price you can expect to receive for them in the marketplace. It’s basic fairness. But the music business doesn’t work that way.
How much a songwriter gets paid is mostly determined by federal regulations, rather than the free market. This regulatory system was created more than 70 years ago and has not been updated since 2001, before the introduction of the iPod and before streaming music was made popular.
More people are streaming more music today than ever before — and this is a good thing. I want fans to enjoy my music on whatever platform they choose. But I don’t want my music, and the music of my peers, to continue to be devalued by the streaming companies that reap the benefits of our work at our expense.
To illuminate how little trickles down to the songwriter level — it takes about 1 million streams for a songwriter to see $90, and multiple writers often split that share. Songwriters see the smallest fraction of royalty payouts because we are limited in how we can negotiate. Meanwhile, record labels and recording artists often earn 12 to 14 times more than songwriters for a stream of the exact same song. As an artist who has experienced both sides of this split, I can personally speak to the nonsensical disparity between these different incomes.
Streaming companies know they are getting a good deal under the consent decrees and are taking advantage of an outdated system to become billion-dollar corporations at the expense of songwriters trying to earn a living and support their families.
The time for change is now.
Congress can start by passing the Songwriter Equity Act, which would help songwriters secure royalties more reflective of the free market. More and more co-signers continue to lend their support to this important legislation, but we need a consensus in order to evolve our music licensing system to correspond with how people listen to music today.
Passing the Songwriter Equity Act and making simple changes to the consent decrees will not, as many alarmists claim, lead to the collapse of the streaming model. It will, however, create a more efficient and effective music licensing system that better serves not only songwriters, but also the needs of music licensees and music fans everywhere.
A thriving American music industry depends on the creativity — and in these times, the persistence — of songwriters. By updating the outdated rules that govern music licensing, we can return the right to earn fair pay for hard work to the next generation of great American songwriters and composers, so they can keep writing more of the music we all enjoy.
Ne-Yo is an award-winning R & B and pop singer-songwriter and member of the American Society of Composers, Authors and Publishers. In early 2015, he released his sixth studio album, “Non-Fiction,” which includes the hit single “Time of Our Lives” featuring Pitbull.