Payment Battles on Streaming Platforms and Social Media

Smaller independent artists have been concerned about their treatment and compensation from streaming platforms and social media apps like Spotify and TikTok for a while now. Last year, the major record label Universal Music Group (UMG) pulled all of its copyrighted music and artists from TikTok after failing to come to an agreement about compensating artists and handling AI-generated music. At Spotify, many independent, smaller artists who rely on the app for part of their income feel like the current system is unfair. I personally have some predictions about what will happen to music on our favorite apps if this continues and gets out of hand.

Record Labels frustration with music on TikTok

Have you ever watched a video on TikTok, and whenever you clicked the sound, you noticed that the song used was not by the original artist? Due to this and more problems, record labels like Universal Music Group have expressed annoyance with how TikTok fails to pay artists adequately or sometimes not at all. As a result, UMG removed all of the songs from artists they work with from TikTok before eventually coming to an agreement and returning to the platform months later. While big labels can negotiate and deal with TikTok, small, independent artists are left out of the conversation and are extremely undervalued.

Photo from IBISWorld

Artist Compensation on Spotify

Spotify is the number one streaming platform in the world and generates billions of dollars from its subscriptions, but many artists argue that the financial benefits they receive are unfair. Spotify pays artists a percentage of total listening on the app, which comes out to be .003 cents per stream, and for smaller artists trying to break into the industry, that isn’t a viable living wage. Bigger artists have come forth about this issue, like how Chappel Roan said during her Grammy speech, “I told myself, if I ever won a Grammy and I got to stand up here, I would demand that labels and the industry profiting millions of dollars off of artists would offer a livable wage and health care, especially to developing artists.”

Photo from Vogue

Prediction for the future

If the dispute against unfair pay on apps like TikTok, Spotify, and other apps continues, I believe we may see artists and their labels make exclusive deals with platforms for greater pay. Instead of paying one service to deliver almost every song in the world, there might be a future where we have to pay one service to stream our favorite band and different services for some of our other favorite artists.

Thank you for reading my blog!

Caleb G / Inudstry Insider