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  • Mark A. Skoda

The Streaming Paradox: The Elephant in the Music Room



While we live in a world where nearly every song imaginable is at our fingertips, there's an unsettling reality behind this convenience. The music industry has evolved significantly over the last decade, with the advent of music streaming platforms such as Spotify, Apple Music, and Tidal. These platforms have revolutionized how we consume music and have financially benefitted the industry, with major record companies achieving remarkable success. But there's a concerning disparity that needs to be addressed - a vast majority of artists are struggling to make a sustainable living from streaming platforms.


Firstly, let's delve into the harsh reality for most artists in the streaming industry. While the top 1% of artists may seem to bask in the glory of millions of clicks, an overwhelming majority are left in the dust. Despite the massive number of tracks available on these platforms, only a small percentage achieve high stream numbers. Most artists fall into low stream categories, making it hard for them to earn a significant income from streaming services. This growing inequity suggests that streaming platforms, instead of democratizing music distribution, are amplifying the pre-existing imbalance in the industry.


One of the crucial factors at play is the pro-rata model of royalty distribution that favors popular tracks and artists. Under this system, streaming revenue is pooled and distributed based on the percentage of total streams an artist gets. As a result, artists with millions of streams receive a larger share of the pie, while emerging artists and those in niche genres struggle to secure a significant cut. In addition, major labels' contracts and ownership stakes may influence playlisting decisions, potentially favoring their artists and marginalizing independent musicians.


So, what does this mean for the music industry as a whole? The current state of affairs signals a pressing need for reform and innovation. One potential alternative that is gaining traction is a user-centric payment model, which bases royalties on individual listening habits. This approach could lead to a more equitable distribution of revenue and offer a fairer reward system for artists who may have a smaller but dedicated fanbase.


Moreover, artists and their supporters are looking for alternatives beyond streaming. Platforms like Bandcamp and Serenade are growing in popularity due to their artist-friendly policies and practices that focus on transparency, fair compensation, and direct fan support .


At Iron Gate Records, we align ourselves with the future of the industry, fostering the growth of artists and their connection with audiences. We believe in the necessity for change and stand behind the movement for a more equitable music industry. We advocate for transparency, fair compensation, and an artist-centric approach, focusing on live performances rather than just streaming, to provide a unique platform for artists to express themselves and retain ownership of their music.


The music industry is a complex ecosystem, and the streaming conundrum is just one aspect of it. However, it is a crucial aspect that affects artists' livelihoods, and confronting it head-on is a necessary step towards a more sustainable and equitable future. As we navigate the landscape, our hope is for a more balanced ecosystem where each artist, irrespective of their standing, can thrive and benefit from the music they create.

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