Shownotes Transcript
Hey guys, I'm Mitra Farooq and this is What's in the World on the BBC World Service. Now, being a music star comes with its perks. Crafting the song in the studio, heading out on stage and hearing the lyrics back to you. Maybe you get to collab with your music hero along the way too.
But if music is your job, how are you making money these days? There's a few things affecting the cash flow if you're a musician. Depends which part of the world you're making music in, which platforms you're appearing on and just how famous you are too. So bundling all this together, we know the music business is a tough one and there's a lot of competition out there. So is it getting harder to make money these days?
And that's what we're chatting about in today's episode. I'm with BBC Newsbeat's Ria Collins. Hey, Ria. Hey, Ikra. Let's start with the actual publishing of a song then. When it's out there, how does a musician make money from it?
Once your song is released, pretty much every time that song is played, you'll make some money. It might not be much, but you'll make some money. You know, whether that's on the radio, being streamed on an app like Spotify or Apple Music. You know, we have some...
purists out there as well who still buy physical copies you'd get money from that aside from that you know what you also get paid to perform live um and of course if your song ends up being used by third parties like say in an advert or a film they also have to pay you to license your song now there is a bit of a catch because not all of that money goes to you you mentioned publishers so a lot of artists don't actually fully own the rights to their own songs so their publishers i.e their record labels will often take a cut of what you make and
And we hear this word royalties quite a lot. So how do royalties work? Royalties, that's just basically...
Basically, the word we use to describe what we've just been talking about from all those different streams of income that you might get when your music's played. It's split between like sort of three categories. So you have performance royalties. That is like when your song played on the radio, but even in like a shopping centre as well, they have to pay. Then you have mechanical royalties that covers things like.
streaming and physical sales. And then finally, you have licensing and sync royalties. And that is when your music is used by other companies making, say, a film, TV show, game, advert,
that kind of thing sync royalties as well that is quite a murky world to be honest with you like there's no clear benchmarks for artists to know how much to expect they can make from royalties there so there was a case actually last year this band called heaven 17 they basically called out gta 6 because they were offered i think 22 and a half thousand dollars to use um one of their songs in the game and they were like that is quite pathetic to be honest and
It's just such an open field, like some bigger artists might get offered millions. Let's focus a little bit more on streaming now. So how do artists make money from the streaming sites like Apple Music, Spotify? It really does vary from artist to artist, but overall, some estimates reckon that an eye signed to a major label probably makes less than 20% of their income from streaming apps.
Spotify is actually set to publish its annual economics report pretty soon and this will give a breakdown of how much they make and then how much of that is passed on to rights holders. The most recent figures we have is that they paid £10 billion to the music industry but you'll notice that while that sounds a lot they
they haven't actually said that they're paying that to artists. They're saying they're paying that to the music industry. And some people have figured out that you need to be streamed about a thousand times on the app before you might even make 25 cents. So only a minority of artists are making significant money from streaming. Also, apps don't often pay out at all if you're quite a small-scale artist. So if you have fewer than, say, a thousand streams, you might not get any money at all.
And again, this is where we need to talk about rights holders, because even say if you are streamed enough to make $100,000 from your music, that then has to be split, right? So labels take a cut, but so do other people who've worked on the song as well as the lead artist. So the average, you know, once everyone's taken their cut, an artist might only get about 16% of that overall figure from the streaming platforms.
We wanted to find out a little bit more from someone who is in the music business. We've had this message from Mary Spender. She's a singer-songwriter. I've never been signed to a label, but years ago I was offered a 360 management deal, the kind where the business takes a cut of everything you earn, even income unrelated to your music. So I said, no, thank you. And I walked away.
So as an independent artist, I had to figure out how to fund, record and release my album without any backing. And that meant getting creative. So I use videos to promote my music. On YouTube, I've grown my channel to 750,000 subscribers. That channel has allowed me to build multiple income streams that are all relatively equal in keeping me going. Although I have toured, I can't say it's a huge part of my income. It's instead usually a huge expense.
So after spending five years on my YouTube channel to fund the album, I recorded and sold 1,000 copies of an acoustic album called Songbook directly through my Shopify store. And that helped me raise the budget for a full studio production. Streaming can work well for some artists, but for most of us, the numbers just don't add up. And one stream pays about a third of a penny. And to put that in perspective...
One person buying a CD from my website is equivalent to just over 8,000 Spotify streams. And that's why I kept Super Sexy Heartbreak exclusive to my physical merch store for nearly a year while gradually releasing it to streaming platforms. In the past year or so, the album has earned about £800 from 375,000 Spotify streams.
But it costs £25,000 to make. So to break even, I'd need over 9 million streams and double that to earn minimum wage. That's 18 million streams. Or I just needed 2,000 people to buy a CD to recoup and make a living. What about when it comes to... Obviously, we're all talking about AI at the moment. It seems like when you come to the fraudulent side of things...
streaming could probably be affected as well, right? How do we get around that? Yeah, I mean, it has happened, but it is quite rare. So last year in the US, there was a man who was accused of using AI, basically, firstly, to write loads of songs for him. And then secondly, to get thousands and thousands of bots to then stream it sort of endlessly. So he was generating...
so much money in royalties. I think prosecutors in the US said maybe more than $10 million he might have made. And there was a similar case in Denmark too, where again, sort of basically the same tactics. And he was jailed actually last year. And
if convicted, the same could happen to this guy in the US. So it is happening. There seems to be a bit of a crackdown, a bit of greater awareness. And it's not just about Spotify and Apple. Other streaming platforms have been launched and they say they're fairer to artists too, right? Yeah, but it's a tough one. It's a tough one, sorry, because while these streamers
streaming apps do claim to pay artists a bit more we're again just talking about fractions of a cent so um i think tidal and deezer pay about double what spotify will per stream but again you just need thousands and thousands of streams before you notice any impact from that
So we reached out to Spotify and Apple Music for a comment on the amount artists are paid from streams. They didn't get back to us, but previously Spotify said they pay rights holders directly and it's up to them to pay artists.
It's not just all about the streaming. It's a big part of the music industry now, but there's other ways artists can make money, right? Yeah, absolutely. And, you know, they have to. They have to find other ways to diversify. You know, traditionally, you've obviously got, you know, things like touring and merch and brand deals and partnerships and all that. But you can't really talk about artists and making music these days without also talking about social media, TikTok. A lot of artists are, you know,
either become social media stars or are social media stars that become artists. With a lot of bigger artists we're seeing in particular, music isn't
really what they're most profitable for a lot of the time anymore. So I'm thinking of Selena Gomez, you know, she's recently made it to the billionaire list or whatever it is. It was Bloomberg who compiled that list. And they said that actually music is quite a negligible part of what she's making. Most of it's from her makeup line. Is it harder for the rising musicians to kind of break through in this day and age? I
A lot of artists are certainly saying it is. You know, like you say, you can break through, you can have that moment on TikTok, for example, but then can you sustain that and actually translate that into a career? You need to be streamed
loads to make a decent income from that. There are other factors too, like here at Newsbeat, we've spoken to quite a lot of artists who've told us how expensive touring can be and putting on a show. So, you know, as fans, you know, we've probably all experienced how expensive it is to get tickets to see our favourite artists. And a lot of them are actually saying, well, they're not making a lot of money from it.
We spoke to the Irish country singer Seema fairly recently, and she told us that, you know, every time she performs in the US, she loses money. The cost of touring, the cost of visas, all that, like it's all going up. Compare that to Taylor Swift, who, you know, had a record breaking tour with her Ears tour, making billions. Ria, thank you so much for coming on. It's been so good to chat. Thanks for having me. It's been great.
Thank you for joining us today. And hopefully you've got a better idea of how musicians make their money and the hurdles that sometimes get in the way of the cash coming in, even if you've got a viral hit. This is What's in the World from the BBC World Service. I'm Itka Farooq and we'll see you next time. Bye.