Why has the compensation of artists and music labels for content been an issue for streaming music services?

Question

What will be an ideal response?

Answer 1

While music labels might receive 32 cents for every iTunes track they sell, they receive only .63 of a penny on a streamed version of the same song. This revenue is split with the artists, who receive .32 of a penny. Rolling Stone calculated that a very popular song selling 1 million streams would produce revenue of $3,166 for the artist and a similar amount for the music label. For artists, ad-supported streaming pays considerably less than subscription streaming. For this reason, many artists and groups refuse to allow free ad-supported streaming of their music. In 2014, Taylor Swift, one of the world's most popular singers, pulled her music from Spotify's free service because it paid such a low royalty rate. In 2015, she similarly pulled her album 1989 from Apple's newly announced Apple Music service because Apple was planning to not charge for the first three months of the service. Many other singers have withdrawn their performances from free streaming services, and there is a growing movement among musicians toward seeking higher compensation from streaming sites. Streaming services have responded by increasing their payouts to musicians for subscription-based streaming and in October 2018, Congress passed the Music Modernization Act (MMA), aimed specifically at these issues. The MMA will enable songwriters and artists to receive royalties on older songs recorded before 1972, create a legal process for music professionals to obtain unclaimed royalties due to them (previously these were held onto by the streaming services), and create a licensing database paid for by the streaming services but overseen by music publishers and songwriters that should streamline how songwriters are paid, all of which should help ensure that artists are paid more and have an easier time collecting royalties they are owed.