Courtesy of Rep. Tlaib’s Office
A new bill introduced in the House of Representatives aims to overhaul the streaming royalty payment system in an effort to help musicians build more sustainable careers in the digital age.
Reps. Rashida Tlaib (D-MI) and Jamaal Bowman (D-NY) introduced the The Living Wage for Musicians Act in the House on Wednesday. The proposal is built around the establishment of an Artist Compensation Royalty Fund, which would pay artists directly, similar to SoundExchange’s model for satellite and internet radio royalties.
“Streaming has changed the music industry, but it’s leaving countless artists struggling to make ends meet behind,” Tlaib said in statement. “It’s only right that the people who create the music we love get their fair share, so that they can thrive, not just survive.”
The new Royalty Fund would not replace the current streaming payout model, but add a separate payment. The current system divvies up streaming revenues among artists and musicians on a pro-rata basis. The pro-rata model has garnered criticism from some in the industry, who say it unfairly benefits the most successful artists with the highest streaming tallies.
Royalties from the new fund would similarly be distributed proportionally to track streams, but with a few key distinctions: First, labels and other intermediaries would not take a cut before that money reaches artists. Second, individual tracks would stop generating money from the royalty fund after hitting a cap (currently set at 1 million streams a month). Excess royalties generated by tracks with over 1 million streams in a month would then be divided up among all recording musicians.
The fund itself would be paid for largely by listeners, with a “living wage royalty fee” tacked on to to streaming service subscription prices. The fee would amount to 50% of the subscription cost, but no less than $4 and no more than $10, according to the bill. It would also receive 10 percent from non-subscription revenues, like those from ads on Spotify or YouTube.
The Union of Musicians and Allied Workers — which supports the bill and has worked with Tlaib on music streaming issues before — argued that streaming platforms are already planning to raise fees (as Spotify did last summer), and that the increases proposed by the bill are a way to get “out in front” and ensure that additional money from listeners goes to the artists they’re listening to.
Damon Krukowski, a musician, UMAW organizer, and former drummer for indie greats Galaxie 500, said, “There is a lot of talk in the industry about how to ‘fix’ streaming — but the streaming platforms and major labels have already had their say for more than a decade, and they have failed musicians. The Living Wage for Musicians Act presents a new, artist-centered solution to make streaming work for the many and not just the few. We need to return value to recordings by injecting more money into the system, and we need to pay artists and musicians directly for streaming their work.”
While much of the debate around the current streaming royalty status quo has centered on the streaming services themselves, the Living Wage for Musicians Act does seem to let the DSPs off the hook somewhat. Instead, the focus seems to be on circumventing record label deals that have long saddled artists with low royalty rates and heavy advances that must be recouped before an artist can actually start making money. It’s unclear how exactly the labels will feel about a new revenue stream they don’t get a cut of, with the Recording Industry Association of America not immediately returning a request for comment.
Additionally, streaming services will likely chafe at having to pay an additional 10 percent of their non-subscription revenues to the royalty fund. Reps for Spotify, YouTube and Apple Music, three of the biggest streaming platforms, also did not immediately return Rolling Stone’s requests for comment.
Lastly, it remains to be seen how fans might react to a legally-mandated subscription fee increase, even if the law aims to ensure that money will only go to artists and musicians.
