Thanks to streaming, recording industry revenues are back up to pre-internet levels, but musicians are poorer than ever

Since the days of Napster, record labels have recruited recording artists as allies in their fight against unauthorized music services, arguing that what was good for capital was also good for labor.

But as Teresa Nielsen Hayden says, "Just because you're on their side, it doesn't mean they're on your side."

Since the rise of streaming services, recording artists have complained bitterly about the pittances they receive in royalties, while the streaming services countered that they were sending billions to the labels, who were pocketing all the money without passing it on to the talent.

Last year, the record industry gained an extra $1.4 billion in new revenues, mostly from streaming, restoring its overall revenues to pre-internet levels, when the labels had grown accustomed to reselling the same music every couple of years in new formats (vinyl, 8-track, cassette, CD). Overall, streaming services remit $7.4 billion to rightsholders.

But musicians' median income continues to fall, and it's not hard to understand why: it just takes a basic grasp of supply and demand. The number of labels has dwindled to four, meaning fewer bidders to put musicians under contract, and thus ever-worsening basic contract terms. Signing with a label isn't necessarily optional for artists: if you want to make music that incorporates samples, you'll find that you need to sign up with a label or you'll likely be refused a license.

Meanwhile, there has been a concomitant reduction in the number of online services that would help indie artists survive without a label, thanks in part to higher compliance costs demanded by the labels in the name of fighting copyright infringement (despite the immense expense of these measures, the labels would be the first to tell you that they're not working). These costs reduce the likelihood of new entrants into the market -- it's one thing to start Youtube with a couple dudes in a garage; it's another altogether to start a Youtube competitor in 2018 and raise a couple hundred million dollars extra in order to put together a Content ID-style system to forestall legal action from the record labels.

As the number of online services has dwindled, the extent to which they compete for musicians by offering better terms has likewise declined; indeed, it's now become customary for Big Tech and Big Content to sit down and negotiate deals that indies are then forced to accept, effectively binding everyone -- regardless of whether they're signed to a label -- into a sharecropper in the labels' fields, with Big Tech serving as crew boss and enforcer.

The fight isn't -- and has never been -- about Tech vs Content. It's always been about labor vs capital -- but in the early days, the forces of capital on the tech side were fragmented, mutually uncooperative, and competitive, and could be played off against each other. More than a decade later and the copyright wars has helped Big Tech grow into a unified front, jointly presented with the entertainment industry (with minor, occasional skirmishes), arrayed against the working artists of the world and the fans that love them.

The music industry had a fantastic 2017, driven by streaming revenues [Michael Grothaus/Fast Company]

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