The unsung heroes behind our favorite tunes are facing a financial crisis.
Songwriters, once able to earn a decent living from album sales, now face a bleak financial landscape in the streaming era.
MIDIA Research’s “Songwriters Take the Stage” report reveals the tough situation in today’s songwriting world. Out of over 300 surveyed songwriters, 54% earn between $0 and $1,000 a year from their work. And, only 10% manage to pull in more than $30,000 a year.
Streaming Economics Leave Songwriters Behind
The way streaming works has dealt a severe blow to songwriters’ ability to earn money.
For each stream, which usually pays just about $0.004, songwriters get only 9.5% of the royalties. Performers, on the other hand, get almost twice that amount.
Breaking down the streaming pie makes this unfairness more obvious:
- 56% goes to the recording side (label, distributor, artist)
- 30% goes to the streaming service
- Only 14% goes to the publishing side
And here’s the kicker: of that 14%, songwriters only see 68%, with publishers and performing rights organizations taking the rest.
When you add in multiple writers per song and management fees, the individual songwriter’s share becomes even tinier.
But, this imbalance gets even worse because of how the industry is set up.
Often, the same companies own both major labels and publishing houses. This makes them more likely to focus on making money from recorded music rather than publishing.
Spotify, the biggest streaming service, says it pays out nearly 70% of its income. But its new bundling options could cut songwriter royalties by about $150 million each year.
More Challenges and Goals in a Changing Landscape
The songwriters’ problems are not just because of streaming. Breaking through the noise in an oversaturated market is now also proving increasingly difficult.
Plus, the collaborative nature of modern songwriting also adds another challenge.
“Writers rooms,” where hit songs are often created, rarely offer salaries or even daily pay. Songwriters often spend their own money just to work, only getting paid if a song is recorded and released. It’s a high-stakes gamble that many are forced to take.
To deal with this new reality, songwriters are changing their focus.
The study found that getting their songs in movies or TV shows and finding new ways to make money were the top yearly goals, each mentioned by 31% of those asked.
Building a social media following has also become important, with 23% making it a priority.
This shift extends beyond fan engagement. Social profiles now serve as resumes, helping songwriters connect with collaborators and land publishing deals.
Industry Response and Potential Solutions
In response to this crisis, the National Music Publishers’ Association (NMPA) is pushing for changes in the law. They want to change the Copyright Act so songwriters can negotiate royalty rates directly with streaming services, instead of relying on rates set by the government.
However, this could make things more complicated, especially for songs with multiple writers.
Unlike recording artists or even producers, songwriters don’t have a unified voice.
While there are groups like SONA, NSAI, and the 100 Percenters that speak up for them, these groups don’t have as much power as big industry organizations like the RIAA.
It’s a David and Goliath situation, with songwriters desperately seeking the right stone to sling.
To deal with this, songwriters themselves are looking for tools and services to help them in this tough situation.
One thing is clear: without big changes, songwriting as a career is in danger. The very foundation of the music industry – the song itself – is at risk, threatening to silence the voices behind the hits we love.