This past week, Adele shattered just about every record she could. Her album "25" sold half a million copies prior to its release, and another 400,000 solely digital copies in its first day, bringing its sales total to over a million within its first 24 hours of release. First week sales like this have not been seen since NSYNC’s 2001 album "No Strings Attached" sold 2.5 million copies in its first week. That is the current record, set prior to the invention of iTunes which completely revolutionized the way music is purchased. While sales of this level are refreshing in a time when music is largely consumed illegally, it is definitely the exception, not the rule.
While Adele, like her “it-girl-of-the-moment” predecessor Taylor Swift, has chosen not to release her music on popular streaming services like Spotify, her album leaked before its release and has likely been pirated by many. While Adele will likely make a good amount of money from the abundance of sales, it’s probably not as much as you would expect. And while more and more major artists are apprehensive about putting their music on streaming services because of revenues that only work out to be a fraction of a cent per play, the problem lies less with the streaming services and more with the record label.
While it is explained well with a series of diagrams and pictures in "Artifact," a 2013 documentary produced by Jared Leto about his band "30 Seconds to Mars," about the band being sued for $30 million breach of contract by their record label over royalty disputes. It is summarized well in an article about entertainment law. For Leto, the band had reached worldwide success and sold millions of albums, but not only had he not seen any profit, he was actually in debt to the record company.
A successful artist can generate millions of dollars by selling albums, digitally and physically, at about $10 each. However, the record label will first take about an 85 percent cut. Then from the 15 percent left for the artist, fees are deducted for recording facilities, the artist’s pre-album signing bonus is deducted from their post-album royalties, and artists are charged for packaging and shipping fees of albums, despite the fact that the majority of albums are sold online and thus not packaged or shipped. These are all ways for the record company to recoup the losses incurred by the fact that large amounts of fans will illegally download an album, rather than purchase it. Also, digital sales means that if a person only likes one or two songs from an album, he or she can simply download these songs, rather than having to purchase the entire album, causing a decline in album sales.
However, this leaves the artist, even a successful, multi-platinum-selling artist, in debt. Usually, the artist will have to make the money to pay back the record company and make a profit for themselves only through touring and sponsorship deals. With the advent of the 360-deal, the record label will take a cut from everything the artist does, even if it is a venture completely unrelated to their recording music.
The large cut and nonsensical fees on the part of the record company are part of the reason music streaming fails to provide artists with even enough money to compare to a minimum wage job. While Spotify has already paid out over $3 billion of royalties to date, the money goes to the record label prior to being given to the artist. While Spotify should be paying more to artists, the true issue that should be looked at is the chokehold record companies have on artists.
The fact is music streaming is here to stay. We no longer, and never again will, live in the world where people pay upwards of $15 for an album, for every album they enjoy. This however does not have to be a bad thing, because the true value of music should lie in how many people experience and connect with it, rather than how many people purchase it, and many artists are more concerned with people enjoying their work rather than becoming rich off their work. However, the current model must be examined. For artists who actually may pour months or years of their lives working on an album or song, for someone to completely steal the music or pay less for it than a cup of coffee at McDonalds seems like an assault.