The old way of thinking about indie artists was that they had no choice but to figure out a way to make it on their own because no major label would sign them. They were too obscure, too weird, too niche, and they wouldn’t make any money. Nowadays however, independent artists have more power and capacity to survive, even thrive, without the help of a major label. The advent of the internet, streaming, and social media, as well as legislation regulating for rights of independent recording artists mark a pivotal point in the 21st century for the music industry.
Since its founding in 2006, Spotify has been one of, if not the, dominant music streaming service. Other major services include Pandora, Deezer, Apple Music, and Amazon Prime. All of these services notoriously prioritize profits over artists, the worst offender arguably being Spotify, which has come under fire recently due its controversy surrounding one of its top podcasts, the Joe Rogan Podcast. This has brought attention to the privilege that major artists such as Neil Young and Joni Mitchell have to simply pull their music from Spotify, not having to worry about the financial consequences of loss of streaming revenue. The majority of artists on the platform do not have that luxury and are torn between standing up for what they believe in and receiving the measly royalty payments they’re dependent on for income. Moreover, this controversy has reignited a debate over fair payments to artists for streams. Publishers and managers, as well as musicians, are hoping that this conversation continues and leads to Spotify and other platforms considering how much they really value the artists that utilize their services.
Tidal was founded in 2014 and offers a different perspective on what a music streaming service should look like. Its values are to deliver the highest sound quality as intended by the artists, create deeper connections for fans through unique collaborations with the artist community, and a commitment to empower artists to create and deliver their art exactly as they intended. Tidal pays its artists nearly three times the amount per stream that Spotify does, $9.27 per 1,000 streams compared to $3.30 per 1,000 streams. Just by this increase in payment, Tidal has conveyed how much more value it places on artists than the typical streaming service. They also allow their artists to upload their music directly rather than having to go through a third party distributor, putting more power in the hands of artists.
Artists should consider, however, that in a popularity contest between Spotify and Tidal, Spotify still reigns supreme. Tidal is right on Spotify’s heels when it comes to artist discovery by curating a “daily discovery” for users based on their listening habits. But the number of playlists available on Spotify based on genre, mood, activity, and decade is vast. And many have found mainstream success by having a song of theirs featured on a Spotify playlist, which led them to get picked up by a major label. One such story of success is that of indie artist Wallice, whose song “Punching Bag” was featured on the Lorem playlist of over 900,000 followers. From there, the song was streamed 4 million times and caught the attention of London-based indie record label Dirty Hit.
But could Tidal eventually replace Spotify as the preferred streaming service by the masses? It’s quite possible. More listeners are seeing what a listening experience could be like when the needs of artists and fans come first. As one article from the Weekly Ringer puts it:
As the debates over fair compensation for streaming evolve, it’s fair to say that Tidal is taking a step in the right direction. Music fans are slowly ditching Spotify, causing Tidal to gain even more traction. By prioritizing the needs of artists by providing higher pay, delivering their music in high quality audio, and empowering them to upload their music directly onto their service, it will be interesting to see if other streaming services follow suite.
In light of the issue of paying artists fairly for their recordings being streamed, SoundExchange offers another solution. By administering statutory licenses, artists are able to stream their music on digital radio services while being paid a fixed rate for each play. This differs from agencies such as ASCAP or BMI as they only pay out to songwriters, composers and publishers, versus owners of recordings and the artists on them. SoundExchange collects playlists from internet, satellite, and cable radio services and combs through the data. They then pay out 50% to the rights owner (often time the record label), 45% to the featured artist, and the remaining 5% to non-featured artists. To date, they have paid out over $7 billion in royalties. Registration on SoundExchange is free and easy for artists. Often times, there are royalty payments waiting to be paid out to them until they sign up.
In the for-profit sector, streaming royalties are a complicated mess, to say the least. Payouts depend on several factors and are not even among all platforms. Spotify, for example, pays out somewhere between 60 and 70% of its total revenue to artists. SoundExchange is unique in that it is a non-profit that was designated by the Library of Congress as the sole U.S. organization authorized to collect royalties from services that transmit sound recordings under statutory licenses.
With this tie to the federal government, SoundExchange uses its position to advocate for issues related to the rights of creators of sound recordings. Their website provides valuable information for artists, fans, and industry professionals about the Music Modernization Act, American Music Fairness Act, CLASSICS Act, and several other relevant issues. Thanks to their litigation work in 2021, the Copyright Royalty Board increased royalty rates at +17% for music played on commercial non-subscription digital streaming services and +8% for music played on commercial subscriptions services. Their focus on policy and advocacy makes them stand out as a true leader for the recording industry.
Today, a core component of measuring an artist’s success is the amount of engagement they receive from fans. This is especially true for major record labels who have taken to social media and streaming platforms to find their next big artist. TikTok has revolutionized the way artists and fans can connect, even collaborate.
A prime example of this mutually beneficial relationship is between singer Doja Cat and a teenaged TikTok user named Haley Sharpe. Sharpe recorded a video of herself performing a dance to the Doja Cat song “Say So,” it went viral, Doja Cat noticed, put it in her music video and then performed it at the Grammy Awards. Artists can retweet something from a fan or read a DM from them, but TikTok offers something more unique. The platform almost feels like it was designed to be communal, as opposed to Instagram or Facebook where the focus is very much on the artist’s branding of themselves and less so on engagement with the fans.
One artist that found success through the app is Tyler Colon, otherwise known as Tai Verdes. When Verdes decided to become serious about pursuing music, he started putting his music on TikTok. He noticed that listeners were especially engaged, flowing from TikTok to his YouTube and Spotify pages for more. After Tai got picked up by a major label, his song that led to it all, “Stuck In The Middle,” was streamed over 100 million times on Spotify.
Major labels are realizing the value of the app from a cost-benefit analysis. Rather than paying for an extensive social media campaign to promote an artist, they have found more success with much less. All they have to do is pick an artist with an extensive following on TikTok, pitch one of their songs to Spotify to get it put on a playlist with millions of followers, and let the music make its own case to listeners.
There’s a formula for success that has been identified on TikTok. The three primary characteristics users look for are simplicity, vulnerability, and unique song/dance challenges. Lyrics play a big part in how big a song blows up, as users look for songs with relatable themes such as heartbreak, nostalgia, or partying with friends that they can lip sync to. A song must also be short and catchy enough to grab someone’s attention, maybe even have a good rhythm for a memorable dance to be invented alongside it.
If Instagram and Vine had a Gen Z baby, it would be TikTok. It reflects the fearless, eccentric, creative attitude of the youngest generation and through it, record labels are picking out the artists that best represent Gen Z personas. It’s a disruptive technology in an industry when, for the longest time, major labels were deciding what was going to be popular, what kind of music an artist should be releasing, what they should be wearing, saying, basically having total control over them as a branded entity. Now, fans are deciding what they like, how to dress, what to sing about, what to dance to, and the industry is listening.
The disruption of these three technologies comes in the form of a redistribution of power from major labels and publishers to the artists and fans. We are living in a unique time where independent artists have more tools and resources than ever before to make it on their own. Living in obscurity, having to support oneself through other means and adopting the “starving artist” trope should not come at the expense of the expression of oneself through music. More people are realizing that music is a viable career option, and now the technology is catching up to it.