From an article in Rolling Stone Magazine:

David Byrne Criticizes Streaming Music Services

RJ Cubarrubia

October 11, 2013 2:45 PM ET

After David Byrne declared Monday that the richest one percent are draining New York's cultural resources, the former Talking Heads frontman is leveling similar criticism at the Internet and streaming music services in a new essay for The Guardian, writing that the new landscape will leech away creative content from the world.

Byrne says he understands why people stream music. "For many music listeners, the choice is obvious – why would you ever buy a CD or pay for a download when you can stream your favorite albums and artists either for free, or for a nominal monthly charge?" he writes, noting that Spotify is the second largest source of digital music revenue for labels in Europe. But streaming services like Spotify, Byrne says, result in padded pockets for labels, not artists.

"The amounts these services pay per stream is minescule – their idea being that if enough people use the service those tiny grains of sand will pile up. Domination and ubiquity are therefore to be encouraged," Byrne writes. "The major record labels usually siphon off most of this income, and then they dribble about 15-20 percent of what's left down to their artists." Byrne points out that a band of four people receiving a 15 percent royalty from Spotify streams would need 236,549,020 streams to secure an annual minimum wage of $15,080.

Even Daft Punk, who racked up 104,760,000 Spotify streams for "Get Lucky" by the end of August, won't rake it in: they'll make only around $13,000 each for those streams. "This is just one song from a lengthy recording that took a lot of time and money to develop," Byrne writes. "That won't pay their bills if it's their principal source of income. What happens to the bands who don't have massive international summer hits?"

Artists will be out of work in a year if they rely almost solely on streaming revenue in the future, Byrne says, and not everyone can support themselves with big tours, die-hard fans and label support. "Up-and-coming artists don't have that advantage," Byrne writes. "Some haven't got to the point where they can make a living on live performances and licensing, so what do they think of these services?"

Though some artists see view Spotify as a positive and accessible way to spread their music and give listeners a risk-free way to listen, Byrne disagrees with their assessment, saying there are other paths of discovery like the artist's website, sites like Bandcamp and even previews on Amazon. "I like what I hear, there is often the option to buy," he says.

He continues, "I also don't understand the claim of discovery that Spotify makes; the actual moment of discovery in most cases happens at the moment when someone else tells you about an artist or you read about them – not when you're on the streaming service listening to what you have read about (though Spotify does indeed have a 'discovery' page that, like Pandora's algorithm, suggests artists you might like)."

Because labels have a controlling interest in Spotify, artists don't necessarily stand to benefit from the growth of the service, Byrne writes. Spotify dished out more than $500 million to U.S. major labels for the rights to license their catalogues, with another payment to follow; the labels also received equity, becoming partners and shareholders in Spotify, which is estimated at $3 billion in value. "That income from equity, when and if the service goes public, does not have to be shared with the artists," Bryne writes. "It seems obvious that some people are making a lot of money on this deal, while the artists have been left with meagre scraps."

Byrne ultimately doesn't have a solution, though he does have a big concern regarding streaming as a main method of consuming creative content in general. "Perhaps we might stop for a moment and consider the effect these services and this technology will have, before 'selling off' all our cultural assets the way the big record companies did," he writes. "Musicians might, for now, challenge the major labels and get a fairer deal than 15 percent of a pittance, but it seems to me that the whole model is unsustainable as a means of supporting creative work of any kind. Not just music."

He finishes with a bleak warning. "What's at stake is not so much the survival of artists like me, but that of emerging artists and those who have only a few records under their belts," Byrne writes. "Without new artists coming up, our future as a musical culture looks grim."

He's complaining that it's the labels that make all the money from streaming music not the artists. This is another example why it's the LABELS that are obsolete, not the artists. If the artists upload their music themselves to Spotify they would make the money. There has always been a major disconnect between musicians and the business of music with both sides wanting to keep them separate but there is no longer enough of a pie to cut up.

Musicians don't seem to have a problem with considering management part of their act. They split their "artist royalties" with their manager, sometimes equally as with Van Halen where there was a five way split. In the future the manager will be the band's record company president as well and the band members may have to assume the roles of various record company personnel. Sure, it will cut into their drinking, snorting and womanizing time but if they want to keep continuing to pay someone else for all the work that's essential to their career then they have to shut up about only getting 15%. Once the musicians start seeing how much work is involved beyond the writing and performing of three minute pop tunes they'll start to understand why they're being "ripped off".

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