Ever since the music industry began its streaming-fueled recovery around five years ago, the songwriting and publishing communities have been protesting not only the uneven payment structure of streaming — which sees recorded-music rights holders being paid three times what publishing is paid — but also the imbalanced power and payment structures of the music industry. This situation has been thrown into dramatic relief in recent weeks by the formation of the songwriters’ group the Pact and its calls for artists to stop demanding credit and publishing income for songs they did not write — but the organization’s founders also say that it is just the first step in a music economy that has tilted against the people who create the very foundation of that economy: songs.

To summarize that quickly, the music industry saw its total value cut in half by illegal downloading and other forms of piracy in the first years of the 21 st century; the drastic drop in CD sales meant that the once-substantial income derived by artists, labels, publishers from those sales had plummeted precipitously. But as streaming rose and the industry adapted, artists came to accept that their recorded music — which garnered a fraction of the income in the streaming world that it had in the CD era — had essentially become the way to bring people to the place where they really made money: concerts, where fans not only buy tickets but merchandise as well as CDs and albums.

Needless to say, songwriters saw little income from that business model — which has been completely up-ended by the pandemic. Now, with most areas of the business looking at streaming as a if not the primary generator of income, the songwriter’s plight is more dire than ever, according to “Rebalancing the Song Economy,” an authoritative new report by industry analysts Mark Mulligan and Keith Jopling of Midia Research(with an introduction by Abba’s Bjorn Ulvaeus).

The 35-page report, which is available here for free, lays out both the history of this dilemma and some (admittedly difficult) proposed solutions, but what may be unprecedented is the way that it lays out how skewed against songwriters the new music economy is. A handful of the many statistics from the study follow:

  • The global music industry revenues (recordings, publishing, live, merchandise, sponsorship) fell by 30% in 2020 due to the combined impact of COVID-19 and a recession
  • Streaming has created a song economy, making the song more important than ever, yet music publisher royalties are more than three times smaller than record label royalties
  • Streaming will bring further strong industry growth, reaching 697 million subscribers and $456 billion in retail revenues, but the royalty imbalance means that label streaming revenue will grow by 3.3 times more than publisher streaming revenue
  • The current royalty system assumes all songs are worth the same – they are not – and rewards poor behavior that dilutes artist and songwriter royalties
  • Music subscribers believe in the value of the song: twice as many (60%) state that the song matters more than the artist, than think the artist matters more (29%)
  • They also believe that songwriters should be remunerated properly: 71% of music subscribers consider it important that streaming services pay songwriters fairly

In a section titled “The Songwriter’s Paradox,” it lays out the ways that the song has become more important than ever, but, paradoxically, the songwriter has less income and influence

  • Big record labels have weaponized songwriting: In order to try to minimize risks, bigger record labels are turning to an ever more elite group of songwriters to create hits.
  • The emergence of the song economy: The audience has shift its focus from albums to songs.
  • Writing and production are fusing: As music production technologies have become more central to both the songwriting process and to the formation of the final recorded work, there has been a growing fusion of the role of production with writing. This has led to a growing body of superstar writer-producers.
  • The industrialization of songwriting: Record labels are reshaping songwriting by pulling together teams of songwriters to create “machine tooled” hits – finely crafted songs that are “optimized for streaming.” While the upside for songwriters is more work, the downside is sharing an already-small streaming royalties pot with a larger team of creators and co-writers.
  • Decline of traditional formats: Songwriters have long relied upon performance royalties from broadcast TV and radio. However, as the audiences on these platforms migrate towards on-demand alternatives, performance royalties face a long-term decline. Similarly, the continued fall in sales means fewer mechanical royalties for songwriters.
  • Streaming royalties: The song is the first in line culturally but it is last in line for streaming royalties. Of total royalties paid by streaming services to rights holders, between a fifth and a quarter is paid for publishing rights to the song. Labels are paid more than three times higher than publishers on streaming. An independent label artist could earn more than three thousand dollars for a million subscriber streams, whereas a songwriter could expect to earn between $1,200 and $1,400, and even then, only if they are the sole songwriter on the track. On average, songwriters will therefore earn between a third and a half of what artists do.

The report then proposes a series of solutions that are far too complex to summarize fully here, but in short:

  • The song economy requires an interconnected set of solutions across three areas: songwriter remuneration and share, streaming pricing and culture and consumption, with rights holders and streaming services working together
  • Streaming royalties will better serve creators if they recognize that different types of behavior (e.g. lean forward, lean back listening) represent different royalty values and that not all songs are worth the same
  • Fan-centric licensing is a simple concept that may be complex to implement but will bring a crucial foundation of fairness into the song economy
  • Streaming pricing needs a rethink, including ensuring price increases benefit creators, a reduction in the discounting of subscriptions and even metered access to music catalogs, to protect against the current situation of royalty deflation
  • Songwriter careers need to be reshaped, with an opportunity for labels and publishers to work more closely together, including secondments for young songwriters into artist projects, providing predictable income and accelerating their development.

The report concludes with a very British statement: “What is clear is that today’s’ song economy is not working as it should and that everyone across the value chain will benefit from a coordinated programme of change.”

In last week’s Variety article on the Pact, hit songwriter Justin Tranter expressed a similar sentiment in far more direct terms: “The business is definitely still broken and songwriters are definitely the least respected people in our industry, no matter how big of a songwriter you become.”