It’s Time For Transparency On Music Streaming Rates

Major labels may be hoping that new-wave digital music jukeboxes can make up for slowing downloads growth. But a drip-drip of labels pulling out of the services in protest at low fees is continuing, and may grow to more than just indies. The distributor for drum ‘n bass act Blu Mar Ten became the latest to pull its content from streaming services including Spotify, Rdio and Napster, joining Projekt Records, Prosthetic Records, Century Media and Metal Blade Records so far this year. Consumption through these services is booming. Blu Mar Ten’s distributor says 82 percent of listens to its songs this Q3 was through Spotify, Rdio, Napster and Simfy. But just 2.6 percent of its revenue came from these services. In particular, for 750,000 Spotify streams, it got just £2,500, it says: “We have taken the decision to no longer provide content to any of the above streaming-type music services.” European royalty collector PRS For Music licenses on-demand digital music operators using a clearly laid-out industry rates structure that, in the UK, requires either 10.5 percent of their gross revenue or 0.085 pence per track streamed. But, unlike transparent operators like We7, which is only too happy to talk about the rates it pays, every time I have asked whether Spotify is paying industry-standard rates, both Spotify and the industry’s PRS For Music have clammed up, including the latest time I asked just last week. The lingering, unanswered perception is that Spotify, part-owned by the labels themselves, enjoys more favorable rates than its competitors.