Who Makes A Profit From Streaming Music Anyway?

For the last few years, there have been many debates about whether or not artists and songwriters are properly being compensated for the work from digital music services. In 2016, digital consumption completely overtakes physical music products. Online streaming services like Spotify and Pandora are ruffling feathers within the recording music industry because artists don't feel they're being compensated enough.  Bette Midler was one of the earliest artists to speak out about miniscule earnings from these companies.  

But now publishing companies are joining in on the fight for performance rights reform.  Sony/ATV’s CEO, Martin Bandier, has issued a letter to their songwriters describing a plan to withdraw digital rights from ASCAP and BMI if there is no performance rights reform made.

Photo by  Jomar Thomas  on  Unsplash

Photo by Jomar Thomas on Unsplash

The Justice Department is already set to review music-licensing rules after several complaints from music industry executives, recording artists and songwriters.  The regulatory agreements that govern ASCAP and BMI are over seventy years old and are way over-due for revision.  Since the decision was made, large publishers like Sony/ATV and Universal are speaking up about severing ties from ASCAP and BMI.

Bandier hopes his letter continues to apply pressure on the U.S. Department of Justice to act in its revision of current laws by threatening to withdraw from agreements with ASCAP and BMI.  He writes, “It is our hope that the DOJ and appeals process will recognize the benefits and fairness produced by partial withdrawals of performance rights."   

This type of action will change the entire music industry.  Many consumers are using online streaming services with little to no cost. You can enjoy access to thousands of songs without owning the music.  But songwriters are not being fairly compensated by streaming services.  There needs to be reform in licensing laws and rates as well as responsibility taken by record companies in regards to the types of deals they’re making with companies like Pandora and Spotify.