Empowering Independent Musicians and Labels

It’s never been more challenging to be an independent music performer or songwriter.

Before the pandemic, the number of full-time songwriters in one of our music cities, Nashville, had already fallen by 80 percent. But, for performers and songwriters, the pandemic was cataclysmic. According to the RAND Corporation, “[t]he vast majority of artists have likely lost some or all of their income, not to mention losing the institutions on which they depend to earn their living. And there is no clear path back to pre-pandemic levels of employment.” The same study found that 27.4 percent of performing artists were unemployed.

The loss of the ability to collaborate, record, tour, and sell merchandise laid bare the already shaky safety net musicians depend on. With many or most left to rely solely on income from streaming, the longstanding outcry about low payments by the music streaming services has taken on even greater importance.

And, adding insult to injury, in the midst of this devastation, the biggest streaming service, Spotify, which accounts for 35% of the music streaming market, embarked on an effort to extract a discount from independent artists and labels on their already paltry streaming payments. This “offer,” called “Discovery Mode,” offers independent artists and labels the promise of preferred placement on Spotify’s playlists in exchange for what we understand will be a massive pay cut of as much as 30%. The Artists Rights Alliance and many other artist groups are concerned that this amounts to 21st Century digital payola.

House Judiciary Ranking Member Representative Jerry Nadler (D-NY) and House Subcommittee on Courts, Intellectual Property, and the Internet Ranking Member Representative Hank Johnson (D-GA) launched an investigation, stating in a letter to Spotify: “This may set in motion a ‘race to the bottom’ in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment.”

Many of these problems are only possible because of the unique structure of the music streaming marketplace, which lacks the pro-artist/creator features of other streaming markets, such as the intense competition seen in the streaming video marketplace where services compete to land new films, shows, video games, or other creative works on a highly paid exclusive basis. In the music streaming marketplace musicians and independent labels have no real choice but to put their music on the world’s biggest music streaming services on whatever terms are offered to them. As individual musicians or labels, they lack the power to bargain for better pay and against unfair terms and requirements or “Discovery Mode”-type hidden pay cuts. It’s out of balance.

Here, too, Congress is taking notice, with proposals like the Protect Working Musicians Act (PWMA) to allow independent performers and labels to negotiate collectively with music streaming services. Re-introduced on September 19, by Representative Deborah Ross (D-NC), a Member of the House Subcommittee on Courts, Intellectual Property, and the Internet, the PWMA demonstrates that Congress wants a level playing field for individual creators and small/independent labels, including by giving them the ability to stand together in negotiations if necessary to ensure fair treatment.

It’s no idle threat. In recent years our elected leaders have proven they are willing to act to defend the rights of small music creators in the digital environment. The Music Modernization Act of 2018 codified much needed updates to the music licensing landscape to better facilitate licensing of music by digital services. What’s more, in December 2020, Congress enacted the CASE Act, which created the Copyright Claims Board—a low-cost copyright small claims court that empowers individual artists and labels to protect their rights and gives them access to tools that in the past have only been available to larger-scale creators. Clearly, policymakers are concerned about the plight of independent music performers, songwriters, and composers and are willing to take decisive action where appropriate.

Whatever the solution to this power imbalance—whether it is PWMA or something else—shining a spotlight on the exploitation of independent labels and artists is an important step, as the Copyright Alliance believes that music is a cornerstone of our culture. As such, we need to support and value the people who make it.

If you aren’t already a member of the Copyright Alliance, you can join today by completing our Individual Creator Members membership form! Members gain access to monthly newsletters, educational webinars, and so much more — all for free!

get blog updates