Misconceptions About Streaming’s Impact on Artists by Kofi Boachie-Ansah

The Core Issue: Payment Structures, Not Streaming Itself

The assertion that "streaming isn’t the problem—the payment structure is" holds significant weight. While streaming has democratized access to music, its financial model disproportionately benefits corporations over creators. For instance, 70% of artists in Europe report dissatisfaction with streaming payouts, despite record industry revenues reaching $28.6 billion in 2023 . Platforms like Spotify retain 30–35% of subscription revenue, while labels and distributors take 52–55%, leaving artists with a fraction of earnings based on opaque contractual terms . This systemic imbalance highlights how the structure of payments—not streaming technology itself—perpetuates inequity.

The Historical Cycle of Short-Sightedness

1. From MP3 Piracy to Streaming’s "Menace"

The music industry’s failure to adapt to peer-to-peer sharing in the 2000s mirrors its sluggish response to streaming’s flaws. Rather than innovating to monetize digital disruption, labels and platforms entrenched outdated royalty models. For example, Spotify’s pro-rata system pools subscription fees and allocates them based on global stream share, favoring mega-artists like Taylor Swift while leaving niche creators with less than $0.003 per stream . This perpetuates a "winner-takes-all" economy, stifling diversity and innovation.

2. Lobbying for Self-Interest, Not Systemic Change

The user’s critique of artists "playing victim" overlooks systemic power imbalances. Major labels and streaming platforms have historically lobbied for policies favoring their market dominance. For instance, the "Big Three" labels (Universal, Sony, Warner) control ~70% of global music revenue, often locking artists into exploitative contracts with non-disclosure agreements (NDAs) that obscure payment details . When artists like Chappell Roan or Damon Krukowski demand fair pay, they face an uphill battle against entrenched corporate interests .

Case Study: Africa’s Untapped Potential

Africa’s music industry exemplifies both promise and peril. Despite dominating IFPI growth charts for two consecutive years, artists face systemic barriers:

• Legal Gaps: In Nigeria, 90% of artists lack understanding of copyright laws, leaving them vulnerable to piracy and unfair contracts .

• Low Per-Stream Payouts: Even with Afrobeats’ global rise, artists earn minimal royalties from platforms like Spotify, pushing many to rely on live performances and merchandise .

• Youth Demographics: With 60% of Africa’s population under 25, the continent could drive the next wave of musical innovation—but only if legal frameworks and equitable payment models are prioritized .

The Ghanaian Dilemma: Structural Paralysis

Ghana’s creative sector underscores the urgency of systemic reform. Despite ambitions to build studios and attract investment, the absence of foundational structures stifles progress:

• Lack of Collective Power: Without unions or collective bargaining frameworks, artists cannot negotiate licensing deals directly with DSPs. Major labels leverage their market share to secure favorable terms with platforms like Spotify, while African creators remain fragmented and excluded.

• Institutional Void: Ghana’s Fair Wages and Salaries Commission (FWSC), responsible for setting private-sector wages, has no framework for creative professionals. This leaves composers and artists unprotected—unable to secure fair rates for scoring films or licensing work internationally. A Ghanaian composer commissioned by a Hollywood studio remains a fantasy, as foreign productions opt for non-local talent.

• Sector vs. Industry: Investment in Ghana’s music “sector” (not yet an industry) is hindered by the lack of guaranteed returns. Investors, likened to “flies drawn to shit,” require predictable profit models. Until structural reforms—like enforceable copyright laws and standardized royalty rates—transform the sector into a viable industry, capital will remain elusive.

Pathways to Reform

1. Shift to User-Centric Payment Models

Platforms like Tidal and SoundCloud have experimented with user-centric systems, where subscription fees directly support the artists a user listens to, rather than pooling revenue globally. This model could empower niche creators and reduce reliance on algorithmic playlists dominated by major labels .

2. Legislative Advocacy

The EU’s Copyright Directive (2019) and France’s minimum streaming royalty laws demonstrate policy’s potential to enforce transparency and fairness. Similarly, the proposed U.S. Living Wage for Musicians Act seeks to bypass labels by taxing platforms to fund direct artist payments .

3. Collective Bargaining and Unionization

The music industry’s future hinges on organized labor:

• Direct Licensing Coalitions: African creators could cancel outdated licensing agreements and negotiate directly with DSPs using collective bargaining power, mirroring the leverage major labels exploit. A unified front could demand pro-rata rates tied to market share, ensuring revenue reflects actual listener value.

• Functional CMOs and Unions: Establishing robust copyright management organizations (CMOs) and artist unions would enable lobbying for statutory minimum wages and fair contracts. Without this, integration into the global digital economy remains impossible.

4. Investor Confidence Through Structural Change

Investment follows certainty. For Ghana and similar markets, building an industry—not a sector—requires:

• Legal Safeguards: Clear copyright enforcement and standardized royalty frameworks.

• Data Infrastructure: Reliable metrics to track revenue and audience engagement.

• Public-Private Partnerships: Collaboration between governments, creators, and platforms to align policies with creative economies.

Conclusion: Foresight Requires Structural Overhaul

The user’s critique—"change favors those who steer it"—resonates deeply. Streaming’s pitfalls are not inevitable but stem from a failure to redesign systems with equity in mind. To avoid repeating history, stakeholders must:

• Demand transparency in royalty calculations and label contracts .

• Amplify grassroots movements advocating for fair pay .

• Invest in legal infrastructure, particularly in Africa, to protect creators .

As the Nigerian and Ghanaian examples show, disruption without equity risks replicating old hierarchies. The future of music depends not on resisting change but on reshaping it—ensuring streaming becomes a tool for empowerment, not exploitation.

For further reading on artist advocacy and policy reforms, explore IAO’s Streams & Dreams Report or Public Knowledge’s analysis of streaming transparency.