David Byrne has penned an op-ed calling for more transparency between the streaming services, the record labels and artists. Writing in the New York Times, the former Talking Heads singer seems more accepting of streaming than many of his musical peers – it "saved a record industry that piracy had gutted" – but requests record companies open the "Black Box" that obfuscates what happens to those streaming revenues.
"It's easy to blame new technologies like streaming services for the drastic reduction in musicians' income," Byrne writes. "But on closer inspection we see that it is a bit more complicated. Even as the musical audience has grown, ways have been found to siphon off a greater percentage than ever of the money that customers and music fans pay for recorded music. Many streaming services are at the mercy of the record labels (especially the big three: Sony, Universal and Warner), and nondisclosure agreements keep all parties from being more transparent."
In October 2013, Byrne was more critical of music streaming services in an essay for The Guardian, warning that the medium's low royalty rates would dissuade artists from pursuing a career in music and that "our future as a musical culture looks grim." At the time, Byrne blamed streaming services – especially Spotify – for their "minuscule" pay-per-stream rates. Now, however, Byrne takes aim at record labels for pocketing much of the advanced money from streaming services, even though there is no physical production and distribution costs involved.
"The labels also get money from three other sources, all of which are hidden from artists: They get advances from the streaming services, catalog service payments for old songs and equity in the streaming services themselves," Byrne wrote in the New York Times. "One industry source told me that the major labels assigned the income they got from streaming services on a seemingly arbitrary basis to the artists in their catalog. Here’s a hypothetical example: Let's say in January Sam Smith's 'Stay With Me' accounted for 5 percent of the total revenue that Spotify paid to Universal Music for its catalog. Universal is not obligated to take the gross revenue it received and assign that same 5 percent to Sam Smith’s account. They might give him 3 percent — or 10 percent. What's to stop them?"
Byrne cites Taylor Swift's challenge to Apple in the days preceding Apple Music's arrival as an example of how artists can change the system and make music streaming beneficial for everyone, not just the major labels.
"Some of these ideas regarding openness are radical — 'disruptive' is the word Silicon Valley might use — but that's what's needed. It's not just about the labels either," Byrne concluded. "By opening the Black Box, the whole music industry, all of it, can flourish. There is a rising tide of dissatisfaction, but we can work together to make fundamental changes that will be good for all."