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What with artists and fans sharing their Spotify Wrapped, across socials, we were suddenly compelled to put fingers to keys and bash out our thoughts on the debacle of the S word.
Streaming, love or loathe it you can’t deny the changes it’s brought about to the way we consume music. Convenient, yes, but it’s has it tipped the scales in favour of the bigger fish? Or do you believe streaming to be a great way for unsigned to release their material? What follows is an overview of the current state of affairs. Let us know your thoughts, in the comments.
Fans and even the most successful musicians are complicit in perpetuating this broken system, whether through silence or active participation. The annual Spotify Wrapped campaign, celebrated widely as a fun personal insight, is in reality a brilliant marketing strategy that masks the exploitation at its core. It’s a flashy reminder of just how much value we collectively give to platforms that undervalue the very creators who make them possible. If we want change, it’s time to rethink our relationship with streaming and demand better for the artists who shape and soundtrack our worlds.
The Current State of Music Streaming: A Crisis of Value for Artists
The music industry has undergone a seismic transformation over the past two decades, driven by the rise of streaming platforms like Spotify, Apple Music, and YouTube. While these services have democratised access to music, making it possible for fans to listen to almost any track, anywhere, for a modest subscription fee, they have also exacerbated an alarming trend: musicians are being increasingly squeezed out of the revenue their art generates.
This article explores the state of music streaming in 2024, the exploitative practices of major platforms, and why the current system needs radical change. Despite the bleak outlook for many artists, there are glimmers of hope in alternative models and movements advocating for fairness in the industry.
The Streaming Economy: Who Wins and Who Loses?
Streaming platforms were initially heralded as the saviours of a music industry decimated by piracy and declining physical sales. By centralising music consumption and providing legal, easy-to-use alternatives, services like Spotify and Apple Music offered a viable solution for consumers.
However, this solution came at a steep cost for creators:
• The Revenue Gap: For every stream, Spotify pays an average of $0.003 to $0.005 to rights holders, who then split this with record labels, publishers, and (finally) the artist. This means an artist needs hundreds of thousands, if not millions, of streams just to earn a modest income. The financial disparity in the music industry remains glaring, especially for streaming platforms like Spotify. Despite reporting record revenues of €4 billion in Q3 2024 and an operating income of €454 million, Spotify pays artists shockingly low royalties. FACT.
For perspective, a track would need around 250,000 streams just to generate $1,000, a sum often divided among multiple parties, leaving little for the artist themselves. Meanwhile, Spotify’s annual revenue growth of 19% highlights how platform profitability has far outpaced equitable artist compensation .
• Major Labels Reap the Benefits: The big winners in this system are not the artists but the record labels and platform owners. Spotify posted a net profit of $1.2 billion in 2023, driven by a 20% increase in subscription revenue and a booming ad business. Meanwhile, Universal Music Group, one of the “big three” labels, recorded $10 billion in revenue the same year. These profits are largely derived from artists’ work, yet the creators themselves see little of the financial reward.
• The Power Imbalance: Most streaming contracts are structured in favor of major labels, which negotiate lucrative deals with platforms. Independent artists and smaller labels lack the leverage to secure favorable terms, leaving them with a disproportionately small slice of the pie.
A System Rigged Against Artists
The core problem lies in how revenue is distributed. Spotify and similar platforms use a pro-rata model, where all subscriber payments are pooled and divided based on total streams across the platform. This means that if you listen exclusively to independent artists, your subscription fee still largely benefits mainstream pop stars.
For instance:
• A niche indie artist with 10,000 loyal listeners might see only a few hundred dollars a month from streaming, even if those fans listen repeatedly.
• Meanwhile, the likes of Ed Sheeran or Drake, who dominate global charts, take a disproportionately large share of the pool.
This system rewards volume over artistry and entrenches inequality. It also incentivises shorter, algorithm-friendly tracks designed for maximum streams, undermining creative diversity.
Signs of Hope: Alternatives Gaining Traction
Despite the challenges, there are promising developments that could reshape the industry:
1. Direct-to-Fan Platforms – Platforms like Bandcamp allow artists to sell music and merchandise directly to fans, taking only a small cut. On Bandcamp Fridays, the platform waives its fee entirely, ensuring 100% of revenue goes to the artist.
2. Subscription Models for Creators – Patreon and Substack have enabled musicians to create fan-driven subscription models, offering exclusive content, early access, and behind-the-scenes updates in exchange for direct support.
3. Blockchain and Decentralized Solutions – Blockchain technology offers the potential for smart contracts and automated royalty payments. Services like Audius are exploring ways to decentralize music distribution, giving artists greater control over their work.
4. The Cultural Shift Towards Ethical Consumption – As consumers become more aware of the exploitative practices behind streaming, many are opting to support artists directly by buying physical media, attending live shows, or subscribing to ethical platforms.
Reimagining the Future of Music
If streaming is to become a truly equitable model, fundamental changes are needed:
• User-Centric Payment Systems: Instead of pooling all revenue, services could allocate a subscriber’s fee directly to the artists they listen to. This model has been proposed by platforms like Deezer and has the potential to democratize earnings.
• Fair Streaming Legislation: Governments could step in to regulate streaming payouts, ensuring artists receive a livable income for their work. In the UK, campaigns like #FixStreaming have called for a parliamentary inquiry into the issue.
• A Shift in Industry Priorities: Labels and platforms must prioritise long-term sustainability over short-term profits, recognising that without thriving artists, the entire ecosystem collapses.
Final Thoughts: Why Music Matters
Music is more than just entertainment—it’s culture, identity, and emotional connection. Yet, the current system treats it as a commodity, exploiting creators while delivering billions in profits to tech giants and major labels. The music industry has long favored labels, but the gap between artists and gatekeepers has only widened in recent years.
The good news is that fans, artists, and ethical platforms are starting to push back. The challenge now is scaling these efforts and shifting the narrative around the value of music. By supporting independent artists, questioning the dominance of exploitative platforms, and demanding change, we can build a fairer, more vibrant future for music.
It’s time to put the artist back at the heart of the industry. After all, without them, there is no music.