A few weeks ago Nielsen released its mid-year report. Streams up, sales down. On-demand music streaming saw a growth of 92%.  While online album sales remained stagnant (only -.1%), digital track sales fell 10.4% and in store purchases dropped 10%. So, what does this mean for fans and artists? Well, the issue is two-fold.

On one hand it’s great that we live in an age where our musical whimsy is constantly catered to at each beck and call. Plus there are so many more ways for aspiring artists to deciminate their music, be heard, and earn a living. Well, not so much that last part.

Which brings us to fold two. Streaming sites have a different agreement than terrestrial radio. The amount paid out is wildly in favor of the record label and ill-matched towards license agreements, i.e., the talent. The argument from streaming sites is that it gives unsigned artists an avenue to promote themselves for touring. So, what about non-touring songwriters?

The industry average is $.002 per play streaming vs. $.09 on traditional radio. For example, for every 1,000 plays on iTunesRadio a song earns $1.30. On Spotify $1.00-5.00 depending on the level of subscription. $1.20 for Pandora. You get the point.

This problem doesn’t just affect industry newcomers. Remember, physical sales are down. Even signed talent and veteran pros are feeling the inevitable. Artists don’t profit at all from radio play and writers very little.  Performers tour but the only way songwriters make any real money is through sales. It only takes a passing glance down the perpetual declivity that is album sales to see where trends are going.

So, whats the answer? Should streaming sites be held to the same performing rights agreements as radio. If so, how do they juxtapose signed vs. unsigned material? Perhaps the record labels should be on the hook for compensating online plays accordingly? That would give unsigned artists/writers a goal. I mean, if we just paid everybody then what would be the incentive to use record labels? It’s not like the music industry is an oligarchy, (he types with extreme sarcasm).

Don’t forget it’s the  music<business. We have seen the talent go from using labels to gain popularity, to gaining popularity on their own in order to impress labels. The industry is stuck in a record label reliant roundabout and the only viable way to exit is technology.

While organizations like NSAI ardently fight for creators rights the cause has also been expedited by powerhouse recording artist Taylor Swift pulling her music from streaming sites. As the missing revenue is barely worth her taking notice, she’s sticking up for the little guys and gals who count on those menial yet essential few plays.

Technology is a great tool, a great social advancement evoking monumental change in the music industry. But every time the odds even a bit… each summer vacation the little guy grows an inch, the bully grows two. The good news is, there are a lot more little guys than bullies.

By: Tony Manfetano