How Does Netflix’s Streaming Model Differ From Spotify’s?
We hear of musicians being paid less than scraps thanks to the uniquely monstrous revenue models of streaming services like Spotify, Apple, YouTube, etc. Somehow, film and TV have not only survived in the meanwhile, but are also thriving off being exclusively on streaming sites like Netflix or Hulu. What’s the difference?
It’s a vastly different revenue model, in which creators have a vocal say in how much they would lease shows to Netflix for. It’s not an “$x per stream” model. Money that comes in from subscriptions goes directly to content creators, keeps them on the service, keeps them on good terms with streaming, and ultimately has proved so successful that platforms have branched into producing their own shows.
On the other hand, music streaming sites spend the money paying off advertising and record labels, and artists themselves very seldom have a say in the royalty rates they receive. Payout models often calculate an artist’s streams as a fraction of all streams on the service, (for example, number of streams generated by X artists on Spotify, divided by the total number of streams by all artists on Spotify), resulting in disastrous outcomes for smaller, independent artists, and payouts of well under a cent per stream. On many platforms, there is a threshold number of streams to rack up before there is any payout at all.
While streaming in video content has created more revenue and audience for show and movie creators, in music, it is leading to growing backlash over decisions that don’t seem to keep artists in mind, along with a few shady reports of non-existent “artists” belonging to Spotify having high numbers of streams, yet no label contracts, a handful of songs and no tours, to directly generate unshared revenue for the company. Artists are forced to essentially cut music sales entirely out of their revenue, even as digital and streamed music continue to become the most popular forms of music, with vinyl close behind, but digital and CD sales left far, far behind.
Could things change for the music industry if someone adopted a Netflix-like model for music? A model that does away with “fraction per stream” and sets out fair payout rates, acknowledging that the music these sites are willing to throw away for pennies is the very backbone of the multi-million dollar corporates they helm?
#brokenrecord #KeepMusicAlive #FixStreaming