Troy Carter says ’freemium’ works but labels are exploiting artists

“The problem is that the labels push artists into exploitative record deals where they only get a tiny share of the royalties, and the labels keep the rest.”

One of the world’s leading and most recognised music managers, Troy Carter (John Legend, Meghan Trainor), recently sat down with tech news website TechCrunch to explain the reality of music streaming and the responsibility artists have in the battle for royalty payment clarity.

In general, the music industry relies on royalties generated by the licensing of copyrighted songs and recordings as a primary form of payment for musicians. Intellectual property law and licensing systems have gone through significant adjustments over recent years as a result of the rise of digital music, but much of the industry’s historic legal framework remains.

As Carter explains, although 70% of Spotify’s revenue is paid back in the form of royalties, very little is actually returning to the artist. In similar scenarios, Apple Music will be paying 71.5% of streaming revenues back to rights holders. That beats Spotifyby at least 1.5percentage points, andit’snot 58%, according to Apple, despite the figure surfacing in arecently leaked Apple contract.

With the argument generating significant heat from artists over why they aren’t receiving the payback directly, Carter highlights that the reality for payment will come in the form of artist negotiation. Specifically, Carter’s arguments highlight the fact the artist now has the ability to negotiate with their labels as the newly tread ground for streaming revenue becomes more experienced. Carter is suggesting that artists will need to speak up and form new deals that represent more and more of the worth they are duly deserved.

Taylor Swift appears to have been the tipping point in the row that had been rumbling between streaming and artist payment. Swift’s blog post –To Apple, Love Taylor– called on Apple to abandon its plans for no payouts during the free trial period.

The company swiftly engaged a U-turn:“Apple will always make sure that artists are paid,” tweeted Apple’s senior vice president for internet software and services Eddy Cue.

Carter established three points that artists should take into consideration before arguing the use and progress of streaming services:

1. “Streaming Will Earn Artists A Lot With Enough Users– Royalty payouts from streaming might seem small now, but that’s because it’s very new. Eventually as more listeners sign-up, the payouts could match the amount artists made at the height of the $16 CD era.”

2. “The Alternative Is Piracy– If music isn’t easily accessible for free with ads or through a subscription, people will just steal it and then artists earn nothing.”

3. “Labels Are Hoarding The Royalties– Services like Spotify and Apple Music pay more than 70% of what they earn to the labels, and most of the rest covers expenses of running the apps. The problem is that the labels push artists into exploitative record deals where they only get a tiny share of the royalties, and the labels keep the rest."