The Trouble with Music Sales

I’m a music pirate. There I’ve said it. I’ve downloaded mp3 files for years. I’m slowing down, I’m paying for 90% of my music today. And ANY music I love, I buy. Immediately. But… There’s a problem with the music business, and it’s not me. It’s streaming.

One of my friends, also a musician, asked me the other day, “Why would I ever buy an album again?” He was waxing poetic on Spotify. YUK.

So here’s the problem. The digital distribution process for streaming services like Spotify, Pandora and others, allows them to pay only a fraction of a penny per stream. Sure, they have started a PR campaign to let you see how much they are actually paying overall, but here’s the rub with that. 99.5% of all those royalty payments are going to The Rolling Stones, The Beatles, The Who, Pink Floyd, et al, major players with huge catalogs and huge legal teams to protect their client’s income streams.

Yes, Spotify would’ve made Taylor Swift whole if she’d allowed them to stream her new disc, but she knows better. They are killing the financial opportunities for all but the biggest bands. The idea of the democratization of the music business, with the collapse of BIG MUSIC was to allow the indies to sell direct to their fans. Well, that’s not quite how it’s turned out.

Two big points about my participation in this process.

1. I’ve never intended to make a living playing music. I have a career, a house and two kids, and a life style that does not involve extended time in mini-vans and crappy hotel rooms.

2. I have only marginally successful tracks on iTunes and other online outlets. Yes, you can still by my physical CDs from CDBaby, but that market has all but gone away.

Still, I should be able to build on my catalog, my small but growing fan base, and continue to grow my income stream from my music. IF, AND ONLY IF, I disallow Spotify and Pandora from streaming my tracks. Here’s a recent accounting page from my digital distribution dashboard on CDBaby.

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See all those $0.00 sales? Here’s how one of the stream sales looks in the details.

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Let’s see, that’s 0.0005 per stream. 100 streams and I’ll make a nickel. Um, that’s not going to pay for guitar picks.

I’m sure the Rolling Stones are making fine dough off streaming with Jumpin Jack Flash, Sympathy for the Devil, and the rest of their hits. But new indie bands are NOT making jack shit.

Okay, I hear you, that’s fine, you say, the money has always been in the touring. Even when majors broke new acts, the bands almost never saw any money from the record sales, they made money on-Tour. The record labels supported the tour and the artist would WORK their asses off, and make a descent living. This is major label artists.

This is also why musicians like Prince took a hiatus and became “the artist formerly known as…” because he was tired of giving all of the cash to his label. And that’s why bands you knew and loved often go away. They must give up their band name and start again, or be forced to buy back their catalog from the labels.

So, if Apple Music is about to revolutionize the streaming music business, let’s hope they get the royalty portion of the equation right. They’ve got a killer instal base of paying customers with the iTunes store. And the word is Apple Music is going to kill iTunes Radio.

Let’s see your hand, APPLE. The indie artists of the world as well as the future are waiting for you to lead.


  • Apple Music: US$9.99/month or US$14.99/month (Family plan for six devices)
  • Spotify: £10/month (£30 for five people)
  • Google Play Music: £10/month
  • Tidal: £10 for 320kbps, £20 for 1411kbps
  • Pandora One: $4.99 per month

John McElhenney / aka Buzzie

Reference: Apple Music – Can They Get Streaming Music Royalties Right? –

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