Table of Contents

Table of Contents

Streaming Platforms, Indie Music, and Ethical Stuff

Streaming platforms have definitively transformed the landscape of the music industry, offering unprecedented access to a vast library of songs with just a few clicks. For indie musicians, this digital revolution has presented both opportunities and challenges.

While streaming services have provided a space for indie artists to reach a global audience, they have also sparked debates about ethical consumption and fair compensation within the indie music community.

This blog post explores the ethical dilemmas surrounding streaming platforms and their impact on the music industry, especially indie artists.

Streaming Platforms and Artists

Streaming platforms have emerged as dominant players in the music industry, reshaping how music is consumed, distributed, and monetized. How exactly? By offering users access to millions of songs for a monthly subscription fee or through ad-supported free tiers.

With their user-friendly interfaces and personalized recommendations, streaming services have become the go-to choice for music listeners worldwide.

Great. But, what about music creators? And it’s precisely this profile of users that has triggered most of the ethical dilemmas that we’re about to break down.

Streaming Platform and Ethics

These ethical dilemmas highlight the complex interplay between technology, commerce, and creativity in the music industry, underscoring the need for transparent policies, equitable practices, and collaborative efforts to address the challenges facing independent artists in the digital age.

Ethical Dilemma #1: Monetization

Streaming platforms have been criticized for providing lower monetization rates for independent artists than major labels. Monetization for majors is generally better due to their negotiating power which stems from their significant share of the most demanded music catalogs on these platforms. Let’s not forget that major labels represent a large percentage of the artists that people know and want to listen to.

It begs the question, does this go against ethics?

Ethical Dilemma #2: Value Attribution

Streaming platforms may prioritize promoting artists based on their consumption metrics (streams and followers) rather than the artistic merit of their work. This can undervalue independent artists’ contributions and perpetuate a commercialized view of music, and here lies an ethical dilemma and concern about artistic integrity and recognition.

Another question is raised, would it be better/possible to establish a monetization criteria based on artistic or creative value? How would that look like?

Ethical Dilemma #3: Promotional Tactics

Some DSPs adopt promotional tactics involving algorithm manipulation or preferential treatment for artists willing to accept lower monetization rates. It’s precisely the lower monetization of certain products/artists, that some of these platforms use as a pretext to promote such products more or less clearly (with hundreds of different strategies and tactics, often involving algorithms); this helps dilute the market share of the more ‘expensive’ products.

It seems there may be a commercial interest in promoting music with lower monetization (which could include independent artists with an established career, newbies, invented artists, unauthorized remixes, background sounds, etc.).

We raise no question here as it seems to be the most evident ethical conflict affecting artists: they are devalued and forced to compete with products having a commercial purpose, not artistic. 

Streaming Platforms and Artists

For indie musicians – in particular – streaming platforms have provided a democratized platform to share their music with a global audience without the need for traditional record labels or extensive marketing budgets.

This means that, as an independent artist, you can upload your music directly to streaming services without having to go through the traditional gatekeepers of the music industry; however, it now seems that these were not the only hoops musicians needed to jump through.

The proliferation of streaming platforms continues to raise concerns about fair compensation for indie musicians as payment is based on a complex system of royalties that often favor major label artists over independent musicians. On the other hand, while physical album sales or digital downloads provide artists with a direct source of revenue, it usually also involves paying an intermediary for the service.

The result? Many unhappy indie artists are left with the feeling that streaming services exploit musicians by offering minimal compensation for their work, particularly for artists with smaller fan bases or niche audiences.

Ethical Dilemmas: Resolution

The combination of technology, revenue, and creativity can yield amazing results, so where do streaming platforms come into play? We can’t forget that DSPs came about as a technological solution to help artists connect with and be discovered by a global audience. Emphasis on “help”, since their aim was never to be fully responsible for this connection.

So, for independent musicians, DSPs represent a “necessary evil” since they offer exposure and opportunities for growth in an increasingly digital and interconnected world.

So where’s the evil in that? Well, it seems streaming services have been criticized for their opaque payment structures and meager royalty rates, leaving artists struggling to make ends meet.

Streaming Platforms: Payment Models

Typically, streaming platforms pay artists based on a combination of factors such as:

  • Number of streams
  • Subscriber revenue
  • Advertising revenue
  • Artist’s share of the platform’s overall usage

Based on these factors, several models have emerged to try and provide the best or fairest form of compensation.

Subscription-Based Model

Users pay a monthly subscription fee for unlimited access to the platform’s music library. The revenue from subscriptions is then distributed to rights holders based on factors like streams and popularity. Examples of this model include Spotify Premium, Apple Music, Deezer Premium.

Ad-Supported Model

This model offers free access to music supported by ads; the revenue generated from advertising is used to compensate artists based on the number of streams their music receives; for example, Spotify Free, YouTube Music (free version), Pandora Free.

Freemium Model

This model combines elements of both subscription-based and ad-supported models. Users have the option to use the platform for free with limited features (ad-supported), or they can pay for a premium subscription to access additional features and ad-free listening; for example, Spotify (Free and Premium tiers), SoundCloud (Free and Pro tiers).

User-Centric Model

In this model, each subscriber’s subscription fee is directly allocated to the artists they listen to, rather than being pooled and distributed based on overall popularity. This aims to provide more equitable compensation to artists based on individual listener preferences. An example of this model has recently been proposed by Deezer and Universal Music Group (more in the next section).

Although it represents a fairer alternative, as long as it fails to distinguish between passive consumption (not controlled by the user) and active consumption (direct user listening) platforms will still be able to manipulate consumption.

After all, streaming platforms have established models that balance the interests of artists, listeners, and their own (of course, they need to avoid the new kids in the block disrupting the market with radically different payment structures).

Pay-Per-Stream Model

Artists are paid a fixed rate for each stream of their music, typically a fraction of a cent per play. This model directly ties compensation to the number of streams an artist receives.

The challenge with implementing a strict pay-per-listen model lies in how to track and verify individual listeners; moreover, this is not the only “fairer” attempt at models based on true listening behavior.

Direct Licensing

Some platforms negotiate direct licensing deals with record labels or artists, bypassing traditional royalty collection agencies. These deals vary widely in payment structure and may include upfront fees or revenue-sharing agreements.

This disparity in compensation will continue to raise questions about the ethical implications of supporting streaming platforms that prioritize profit over the well-being of artists.

Alternative to Streaming Platforms

In response to the ethical concerns surrounding streaming platforms, some indie musicians have taken matters into their own hands by exploring alternative revenue streams and distribution models.

Patreon and Kickstarter

Patreon operates on a subscription-based model where fans (patrons) pledge to support an artist on an ongoing basis, often monthly. This gives artists a more stable income stream, allowing them to focus on their music without worrying about one-time fundraising campaigns.

Kickstarter uses a crowdfunding model where artists set a funding goal and backers pledge money to help them reach it. This can be used for specific projects such as albums, books, films, etc. If the funding goal is met within a specified time, it receives the pledged funds.

Artists in Control

  • Direct engagement with fans. Both platforms allow direct engagement between artists and their fans. This engagement can be achieved through updates on the creative process, exclusive content, behind-the-scenes looks, and direct communication through comments, messages, or live streams.
  • Monetization of content. Whereas Patreon allows artists to monetize content directly by offering tiered subscription levels with varying benefits (access to exclusive content, early releases, merchandise discounts, etc.), Kickstarter helps artists reward backers based on their pledge level, from digital downloads and exclusive updates to physical items like limited edition prints, signed copies, or even private performances.
  • Independence and creative control. Both platforms empower indie artists by giving them ways to fund projects independently, gain creative control over their work, and retain ownership of their intellectual property.
  • Industry exposure. Kickstarter projects often garner attention beyond the platform by getting media coverage; this is a great way to expose them as a brand and expand their fan base. Patreon also allows artists to showcase their work and attract new patrons through discovery tools and recommendation algorithms.

Bandcamp and Deezer

Other artists have embraced the concept of ethical streaming, encouraging fans to support them through platforms that offer fairer compensation. Two key platforms are making this possible: Bandcamp and Deezer.

Fairer Compensation Method

Bandcamp is known for its artist-friendly approach to digital music distribution for its:

  • Price setting. Artists can set their own prices for music and merchandise, giving them greater control over their revenue.
  • Bandcamp Fridays. The platform waives its revenue share on sales, ensuring that more money goes directly to the artists.
  • Name your price. Bandcamp also offers a “name your price” option, where fans can pay more than the minimum price set by the artist. This allows fans to support artists at a level they feel comfortable with, potentially increasing the artist’s earnings.
  • Data Transparency. Bandcamp offers detailed analytics and transparent reporting to artists, allowing them to track their sales and earnings.

And, of course, we need to mention Deezer’s revolutionary artist compensation model:

  • Reward system. Artists benefit directly when their tracks are actively searched for by fans or featured on Deezer playlists (no algorithms here). Additionally, any artist with more than 1000 listens/month from at least 500 unique listeners receives an extra boost (where one stream equals two). These boosts can be cumulative, which can result in four times the value of streams compared to non-boosted ones.
  • Authentic artists. Deezer is determined to showcase what artists create by removing irrelevant content from its catalog (such as rain sounds, white noise, etc.) and substituting them with its own non-royalty-generating content. Removing this redirects funds towards genuine artists.
  • Empowers through funds. A collective fund is established from the subscriptions of all users. This is then divided and allocated to artists (through their distributors) based on the streaming frequency of their music. Each user contributes a maximum of 1000 streams/month; on average, a user streams 600 times.
  • Anti-fraud tactics. Control over user monetization ensures a more equitable revenue distribution among artists; regardless of how much a user streams a single track or artist. The limit of 1000 streams is done to avoid streaming fraud; this happens when an account accumulates thousands of streams for a singular song or artist.

Despite the major controversy, we need to mention Tidal and its attempt to position itself as a platform that pays higher royalties to artists:

  • High-quality, higher payout. Its emphasis on higher-quality streaming (lossless audio) comes with a higher subscription fee, thus contributing to higher payouts for artists. It’s known to have a higher payout rate per stream than other streaming services.
  • Exclusive content. Tidal also promotes exclusive content and releases from artists, which can attract subscribers who want access to unique music experiences. This can potentially lead to increased revenue for artists featured on the platform.
  • Benefit concerts. Tidal has also been involved in initiatives to support artists, such as hosting benefit concerts and offering financial assistance programs.

Additionally, advocacy organizations and industry initiatives have emerged to support indie musicians and advocate for fairer treatment within the streaming ecosystem. Organizations like the Union of Musicians and Allied Workers (UMAW) and the Content Creators Coalition (C3) have been vocal in their calls for transparency, accountability, and fair compensation for artists on streaming platforms. By amplifying the voices of indie musicians and mobilizing support from fans and industry stakeholders, these organizations are working to create a more equitable music industry for all.

Golden Wrap

Streaming platforms have revolutionized the music industry, offering unparalleled access to music for listeners worldwide; however, this transformation has brought to light a set of ethical dilemmas that challenge the very essence of fairness and transparency in the industry. While streaming platforms have provided indie musicians with unprecedented opportunities to share their music with a global audience, questions remain about fair compensation and the sustainability of the current payment models.

This is why artists continue to explore alternative revenue streams and distribution models, such as crowdfunding platforms like Patreon and Kickstarter, as well as artist-friendly platforms like Bandcamp and Deezer. It’s also why advocacy organizations and industry initiatives are working to amplify the voices of indie musicians and advocate for fair treatment within the streaming ecosystem.

Transparency, accountability, and fair compensation seem to be the way to build a more equitable music industry for all stakeholders involved.

Our final question to you, is that possible?

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