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3 reasons why musical artists are getting underpaid

On Behalf of | Nov 25, 2021 | Copyright Law

Singers, musicians and songwriters can spend weeks producing a single song. They should receive a fair amount of compensation for their hard work and the value they add to society. However, most musical artists are getting underpaid due to three main reasons: copyright infringement, streaming services and labels taking advantage of their work. Less-known music groups have suffered the negative impact of the current trends in the music industry. However, there is still something they can do to fight for their rights.

Unidentified copyright infringement

According to the Pew Research Center, 79% of music downloaders gather music files for free. With the billions of songs available on the web, the number of songs played without paying the right holder is enormous. One would think that this only happens through illegal internet services, but it also happens on popular streaming platforms. Data has shown that 20 of the largest music streaming companies had more than $424 million from profits from unmatched royalties. That is, money they collected but did not know whom to give it to.

The way streaming services work

Music streaming services make up 83% of recorded music revenues in the United States. Ironically, that is not the main source of income for most musical artists. The general public believes the streaming company will pay the artists whose songs they listen to, but that is not exactly how streaming services work.

Most streaming companies put all the money they get from subscriptions and ads in a fund. Then they distribute the money among the artists depending on the percentage of streams their songs had. For example, if a singer has 5% of total streams in a month, they will get 5% of each user’s money, even of those who did not listen to their songs. This leaves small bands and starting artists at a disadvantage.

Labels that abuse their power

It is also important to note that the royalties that streamers pay don’t go directly to the artists. Labels retain a significant percentage of that deal. Most reputable labels only give around 20% of the revenues from royalties to the artist. The percentage is lower for the songwriters, as they also get paid depending on how successful the song is. Also, if there are multiple songwriters, the small percentage they receive is divided among the other writers.

The rights of musical artists

The current music industry favors labels and music streamers over creators. Most artists nowadays don’t know if they are getting compensation for all the broadcasts and plays of their work. Still, if they find someone infringing their rights, they can sue the person who used their song without their permission. The industry might not change overnight, but artists have the right to fight back whenever they encounter injustice.