Streaming has single-handedly saved the music business. In its first-quarter financial results for the period ending December 31, 2017, Warner Music Group announced revenue is up 14% year-over-year, with streaming representing 51% of total revenue. Meanwhile, Universal Music Group's revenue, according to Variety, reached nearly $7 billion in 2017, a 10% jump from 2016, and Sony pulled in a not-so-shabby $4 billion, with streaming up a whopping 32%.
However, despite on-demand streaming increasing in both popularity and revenue, only minimal changes have been made to better compensate the creatives behind the scenes, in particular, songwriters.
On January 27, the Copyright Royalty Board voted to increase songwriters’ streaming pay by nearly 50%, a change that will slowly take effect over the next five years. Of course, some change is better than no change at all, but the split for mechanical royalties between the label and songwriters/publishers is still nowhere close to fair. Once the new deal is consummated, for every $3.82 of revenue the label earns, songwriters/publishers will receive $1.
According to reports, songwriters asked the CRB to issue the greater of 15 cents per 100 streams or $1.06 per user per month, but their request fell on deaf ears.
In early January, less than two weeks before this ruling was issued in Washington, we ran a story about Vancouver, Canada-born artist, producer, and DJ Shaun Frank, who, in a string of tweets, pointed out how little songwriters are currently making from streaming royalties.
"For some reason, streaming platforms aren’t supporting songwriters," Frank wrote.
While the 35-year-old triple threat, who has a writing credit on The Chainsmokers' 7x Platinum-certified record "Closer," has reaped the financial benefits of the 2016 single's success as a result of the song being placed in heavy rotation on the radio, he believes that its popularity on streaming services, where the record has generated several billion plays, demands a better payday for songwriters.
[Editor's Note: Our interview with Shaun Frank, lightly edited for content and clarity, was conducted prior to the CRB's ruling. Following the ruling, Shaun noted: "This is a small victory for sure. I'm not sure I 100% understand what it implies, but it's a step in the right direction."]
DJBooth: Quite often, creatives such as yourself, the folks behind the scenes like songwriters and producers, talk about why the system is broken. But no one ever presents a solution or a suggestion for how to fix it. Can something be done?
Shaun Frank: Well, here’s the thing. It’s actually the law. And I’m not super privy to the exact details of copyright law. There’s a bunch of petitions out right now from the performance societies like ASCAP and BMI that protect songwriters and protect our royalties. They’re trying to get the rules changed in Washington, but that’s not simple. This is kinda what grinds my gears, and I’m scared to point the finger because I depend on so many services for my own success and well-being, but what we’re seeing is platforms that are acting like they're very supportive of the songwriters but they’re in bed with the labels. That’s why this is happening. Certain platforms are heavily in bed with the labels and that’s why 90% of the money is going to master owners at labels. And songwriters just don’t have any support. It’s a 90/10 split. It’s crazy.
I agree. So obviously, this must change your approach as a creative, right?
Well, here’s the thing. I was very lucky to be a part of The Chainsmokers' song “Closer.” I wrote on that song. I actually did some vocal production on that song but my credits on that song are as a writer. And that song went to radio and became a very, very big song around the world. So for me, I got paid. And it was amazing. And I was all for it. I signed a publishing deal and I was like, “Wow, being a songwriter is so great. I can make a living at this. This is incredible.” I came to LA, shut myself out. Started doing songwriting sessions in LA. Writing, writing, writing. And started to realize, “Wow, you know, the only songs that make any money for the songwriters are the ones that make it on the radio. All the other songs can basically get a hundred million streams [and] the writers aren’t getting anything. It’s not even worth it. So, I’m going into songwriting sessions and everyone’s like, “Well, you know... if you don’t write a radio hit, it doesn’t count.” And that is just the worst situation when you’re trying to be creative. You’ve got hundreds of songwriters every day in writing sessions, trying to write songs. These are career songwriters and the only thing they’re focused on is hitting the Top 10 on the radio. Which, I don’t know about you, but I think the radio is pretty irrelevant. It just makes it so career songwriters aren’t even trying to write that stuff. That’s where I think the problem is.
Since you have a group of writers who are catering to the very top of the radio charts, let’s look at the bigger picture here. Obviously, this is degrading the overall quality of the material because it’s being made by design. Is that a fair statement?
Yeah, I mean, listen. Music is in a great place right now. There’s some amazing stuff being made and I’m working on some stuff that I’m super excited about. I’m not coming from a super negative place on that end. But you are right when you say that everything is being catered towards something. It’s funny, streaming fully picked up in the last year and a half to two years, it’s almost saved the music business. It took [the major labels] like 15-20 years to get this together. And in the back of my head, I was like, “This is gonna be amazing when this happens ‘cause everyone’s just gonna put their music out there and it’s gonna be open for the people to decide what is the best music.” And then what happened was, which I didn’t foresee, was this whole playlist thing. And now, we’re basically all the way back to square one again where it’s like, now you gotta appeal to the gatekeeper of this playlist and that playlist like, “Oh, well, I heard this guy is running this playlist. He likes stuff like this. So make sure, 'cause if we don’t get any playlists, then our song is a failure.” And that’s what’s happening now. It’s brutal for young artists.
I’ve noticed that a lot of career songwriters and career producers are rebranding themselves as artists.
Yeah. This is the best thing that’s happening out of this. I’ve been touring and putting out my own music under my own name and it’s actually so amazing to have my own platform because, when I write a song that doesn’t fit someone’s playlist or doesn’t fit someone’s album, I can’t get mad anymore. I love it. I just put it out myself. And what I’m seeing now is that the labels are starting to sign all of these young kids that are writers. Because why wouldn’t they? It costs them nothing to put music out these days, you know? There’s no investment. One of the big arguments on my Twitter post was that everyone was like, “Yeah, but the label puts up so much money to release the music and they take on such a financial burden.” No, they don’t. They don’t anymore. Because putting out music these days is basically submitting your song to a playlist on Spotify on Friday. And you pop the song out, and if it goes, it goes. Yeah, there’s other investments—branding investments and advertising and all that stuff, but a lot of these labels, they don’t do that anymore for new artists. They just put the music out and see if it sticks. So now what they’re doing is they’re just hiring all these songwriters. Why not? It kinda started with electronic artists on Napster and SoundCloud hip-hop artists and shit. Between like 2010-2014, that whole Wild West era of music. Like literally the best era 'cause there were no rules.
It was the best era for websites and blogs, too.
I know. It’s like we’re back to the corporate music structure. You know, when I just got into electronic music in 2012, when I started becoming a DJ and an artist, I was like, “Wow, I make a song, I put it on the internet, all these people hear it, these small little labels will help me push it out there, all the blogs will get me all the hype.” And then to have that go back to the way the way it was before.
I sense your frustration.
Having said that, though, you weren’t making money off music in my time. No one was. So that’s the Catch 22.
At the time, did you justify the lack of income directly from music as you paying it forward, putting yourself in a better position to earn future revenue, right?
Yeah. You’re able to build yourself up as an artist, get fans, go on tour and stuff. You know, I initially loved the whole Spotify model. It was crazy when I started getting checks for streaming. It was like, “Whoa.” There were 10 years where no one was making any money. Then everyone was making money off music again. Look at it how it’s being split. It’s just wrong.
I don’t even know if this is possible, I’m just throwing this out there: Obviously, no two records are equal. Should the splits be the same for records selected as singles versus records that remain album tracks? And can songwriters negotiate the opportunity to renegotiate if a record is selected as “the single”?
Yeah, I don’t know man. That sounds extremely complicated. 'Cause whoever has the leverage is just gonna be like, “No, we’re not gonna renegotiate.” I mean, there’s a lot of different things you can do. There’s always milestone things, you know? Where if your song generates this [number of streams or sales] then there’s like a bonus to the songwriters and stuff. But again, these are all fields we have to make on the back end. There’s so many songs going around. To make all these deals individually, it’s tough. Some of the bigger writers are probably just going into sessions being like, “Listen, I’m gonna do this album with you or I’m gonna do these singles with you and write these songs, but I’m just letting you know that I get a quota of the master if I write with you and we do these songs.” Period. That’s just how it is.
A standard songwriting session is set up in LA, New York, wherever. It’s gonna be like two writers and a producer, right? That’s generally how it goes when we set it up. And the craziest thing is now, producers get to walk away with the points on the master to get those streaming checks. Three people are making music together, but only one guy [the producer] is gonna walk away a millionaire while the other two guys [the songwriters] walk away with nothing.
Because the producer is also getting the songwriting credit.
And he produced the record, yeah. Because he put a kick drum and a snare drum and some chords in. I’m not shitting on anyone ‘cause I do both sides. I’m a producer as well, so I understand. He could walk out and literally make 10 times as much as the people who were in the room with him that day just cause he pressed buttons on the computer.
That split is insane.
It’s messed up. And that’s just because of the law. Here’s the thing, I truly believe that whatever the law is, however it works, it should be 50/50. When Spotify royalties come in, whatever they’re paying—something like $5,000 per million streams or same with Apple Music and any other streaming platforms—$2,500 should go to writers and $2,500 should go to the producers. It’s that simple. That’s what I believe in. Then everybody is on the same playing field to make the best possible music.
Until something, anything, actually changes, do you think the best approach for someone in this position is the do-it-all-yourself motto? Write it, produce it, and record it all yourself.
Yeah, the best model right now is to be the artist. Be the one releasing the music. If you’re a songwriter and you’ve written a bunch of songs and you’re sitting at home with a hard drive full of great stuff, your best approach might not be to try to get the songs cut by bigger artists. It might even be the best thing to just wrap 'em up and put 'em out yourself. You might end up winning or making more. If it’s all about the money. Obviously, getting a song cut by a big artist leads to a lot of opportunities, but financially speaking, 100%.
You’re signed to Ultra Records as an artist and you have a separate publishing deal. Are you happy with the structure of both deals?
Yeah. The publishing deal is great because they put me in the room with great people. I do want them to fix the situation. I do want them to go rally in Washington and just solve this. Whatever this is, whatever is causing this insane split. One more thing on that topic: If one of the labels—let’s say Republic Records, one of the big ones—decided, “We’re gonna be the first label to start giving songwriters a [larger] piece of the split,” they would have every single one of the best songwriters writing the best songs and handing them directly to that label. But they’re too stubborn.
You believe the money that the label would lose on the percentage (split), they would more than make up for in releasing more hits?
One million percent. Because this whole business is driven by the quality of the music and the biggest, best, most relatable, coolest songs always rise to the top. We see that every day. Yes, some get lost, but the ones that really go, they matter for a reason. And a lot of them are written by homies of my mine in LA, people I know. Everyone’s just working down here, writing. And if some big label came along one day and said, “You know what guys, this is crazy. We wanna support you guys. Let’s do a deal where any songwriter on our label, we’re gonna cut them in.” Obviously, it’s a lot more complicated than what I’m saying, but if they agreed, you would have the entire city of LA writing for that label. Every single song would go to them first.
Have you had this hypothetical conversation with anyone at a major label?
I haven’t. And to be honest, I don’t really talk to labels that much. I work mainly with the artists. I’m gonna start bringing it up. It might be an accounting nightmare, I don’t know. I just know that it could stir things up in an interesting way. It would be a big win for everyone if someone started doing it ‘cause everyone would follow suit. They’re basically signing an agreement to give up more money.
At the prospect of making more money...
I think so. I think it would make them a lot more money and they would end up with way better music.
Transcription by Sara Brown.