According to Nile Rodgers, from Chic, if David Bowie were starting his career in today’s highly competitive music industry, he would not have been given a chance to make a worldwide hit record. Rodgers believes that record labels are more concerned with making money than supporting and developing unique talent.
The artist and composer who collaborated with Bowie on Let’s Dance, which catapulted him into the popular music scene of the 1980s, stated that in today’s industry, no record company would have allowed Bowie the time to create a successful record after his string of unsuccessful albums in the 1970s, which did not achieve commercial success outside of the UK.
Rodgers stated that he was given ample time to create a successful song, and after he called me, we collaborated on “Let’s Dance.” The labels used to take on the financial burden of supporting artists they had faith in, hoping that they would eventually become successful, but this practice is no longer prevalent.
In 2021, Rodgers addressed a House of Commons select committee that was examining the streaming economy and how artists are paid. The committee had recently made significant recommendations for industry-wide changes to ensure fair compensation for artists and songwriters.
The discussion, with participation from Prof David Hesmondhalgh and Dr Hyojung Sun, who authored a report on the financial aspects of streaming, and Merck Mercuriadis, who founded the music management firm Hipgnosis alongside Rodgers, collectively expressed that there has been sluggish and restricted advancement since 2021.
Sun told the committee: “We still have a long way to go before we can say the industry has been reset,” while Hesmondhalgh said that in reality “streaming is a source of income for relatively few people” because of the way profit is distributed.
The committee stated in 2021 that streaming has generated substantial profits for the recorded music industry. However, the individuals behind it, such as performers, songwriters, and composers, are not reaping the benefits. Two years later, the panel argued that there has been little improvement.
According to the committee’s report, it is estimated that streaming services like Spotify receive 30-34% of revenue from each stream. The label typically recoups 55%, while the remaining percentage is divided among the recording artist, publisher, and songwriter.
Rodgers illustrated the problems modern songwriters and artists face by comparing today’s streaming remuneration with what he experienced in the 1970s. He told the committee that in 1977 – after his first Chic album sold a million copies – he received $100,000, while Snoop Dogg revealed last week he got $45,000 for a billion streams.
Spotify has stated that it earns its revenue from two main sources: subscribers of its Premium service and advertisers on its Free tier. A spokesperson explained that around 70% of this revenue is distributed to music rights holders as part of the “royalty pool.”
Rodgers strongly disagrees with the labels’ assertion that their larger share of streaming profits is justified due to their investments in artists and repertoire (A&R). He finds it frustrating that they continue to use this outdated argument and even goes as far as to say it is deceitful.
Sun concurred, stating that the evidence did not back up the record labels’ assertions of taking significant risks. Mercuriadis countered that with streaming data accurately predicting fans’ preferred songs, labels were not taking any risks when signing artists. He added that the artists who receive a positive response from the public are the ones who get signed, minimizing the risk for the labels.
The committee meeting took place a few days following the resignation of Spotify’s chief financial officer, Paul Vogel. This came just days after he sold shares worth $9.3 million (£7.4 million) following the company’s announcement of staff reductions of nearly 20% worldwide.
In the third quarter of 2023, Spotify announced a total of 9,400 employees, with a 17% decrease in staff being the third set of job cuts this year. The company had previously reduced employee numbers by 6% in January and an additional 2% in June.
Source: theguardian.com
