Your Streaming Music Payments Are Going Where?

People in the music industry agree: The payments from streaming services are too damn low. But who is to blame? It's nearly impossible to follow the money precisely as it flows from fans to the people who write and sing the songs. Now, a paper from a prominent music school untangles the web of royalty payments, service fees, and secret deals to give one of the fullest pictures yet of what is wrong with the economics of streaming music. It even proposes a potential solution: Bitcoin.

The Rethink Music initiative at the Berklee College of Music's Institute of Creative Entrepreneurship spent the last year examining the business practices of the music industry. "This is an industry whose fundamental business model has been completely upended, but its cost structure and its intermediary structure haven’t changed from a very different era,” says Panos Panay, the institute’s managing director. The report doesn't come from a completely disinterested source. It was underwritten by Kobalt Music Group, a music publisher that is trying to make transparency its calling card. But the numbers largely line up with a widely cited study carried out by Ernst & Young and French record label trade group SNEP.