Royalties ebb as music streams on the Web

A decade after Apple revolutionised the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services such as Spotify, Pandora and YouTube.

A decade after Apple revolutionised the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services such as Spotify, Pandora and YouTube.

As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. The companies behind these digital services have swelled into multibillion-dollar enterprises, but the relative trickle of money to artists is causing anxiety.

Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent.

The numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.7. On Spotify, 131,000 plays last year netted just $547.7, or an average of 0.42 cent a play.

"In certain types of music, like classical or jazz, we are condemning them to poverty if this is going to be the only way people consume music," Keating said.

For those whose income depends on royalties, the biggest concern is whether streaming cannibalises CD and download sales. But proponents of streaming services feel that all is not lost if the number of paying subscribers grows rapidly.

Said Donald S. Passman, a top music lawyer: "Artists didn't make big money from CDs when they were introduced, either. As they became mainstream, the royalties went up. And that's what will happen here."

Keating will be waiting for that day. NYT