How much do you get paid for writing today’s most popular song? Global smash Drivers License by Olivia Rodrigo has racked up more than 581m streams worldwide. So far, Rodrigo and Dan Nigro and their respective publishers should have received less than £200k to share between them for writing the track (not including performance royalties). For most of us, that’s a sizeable sum, but when you consider that the record label’s share of earnings is likely to be four times that amount, the payout seems comparatively low.
The payment of music royalties in the streaming age is the subject of much discussion due to an ongoing parliamentary inquiry in the UK into their economic impact and sustainability. But members of the songwriting community are frustrated that their particular situation is being overlooked: how the transition in music consumption over the past decade has affected their bottom line and the disparity between how much they earn compared to record labels.
Songwriters and publishers have always received a comparatively smaller slice of the pie from the sale of recorded music – in the CD and vinyl age, their share was around 6%, rising to 8% for downloads. For streaming – which today counts for 80.6% of music consumption in the UK – that share has risen to around 12 to 15%, while record labels and artists typically take 55%.
Songwriter Wayne Hector, who has written hits for One Direction, Nicki Minaj and Westlife, says his income has “diminished massively” due to low payouts from streaming services. The only way to make money from music as a songwriter today is to write a hit song, he says, of which there are very few each year. “It’s a tiny number of songwriters who manage to get a big global record, and for those that do, most will only get one in their entire career. I know people back in the day who were writing album tracks and making a fairly good living. Now, it’s impossible.”
Historically, the royalties split was justified by record labels taking on the labour of manufacturing and distributing physical records, and paying for studio sessions and musicians. With the advent of streaming, the label’s role has diminished, says songwriter and Ivors Academy chair Crispin Hunt. “Record labels are still taking a manufacturing and distributing cut when all they’re doing is a marketing job.”
Ben Katovsky, chief operating officer of BMG – a record label and music publisher that represents acts including Kylie Minogue, Gary Numan and KSI – agrees, saying that the way songwriters are compensated “is based on an analogue world” and “not fair”. Fiona Bevan, who has written for Minogue, argues that songwriters and publishers should get an equal share of music royalties to record labels and artists. “That would make a huge difference.”
Record label trade body the BPI justifies the label’s larger share by its spend on marketing, promotion and artist development plus investment into recording costs, music videos and tour support. BPI revealed to the Guardian that in 2019, 23% of the overall £1.1bn revenue received by record labels was spent on A&R (artists and repertoire), while marketing and promotion counted for 13%. Generally speaking, artists receive 20-30% of label revenues, depending on their deal terms. Publishers pay songwriters around 80% of the revenues they receive from recorded music.
BPI CEO Geoff Taylor argues that labels and artists play a “vital role” in turning a song into an outstanding recording, and then stimulating demand for it, generating royalties for the publisher and songwriter, as well as the artist and label. “Publishers do not take the same level of risk, and the market has effectively allocated shares of revenue that reflect their respective investment and risk.”
The risk Taylor refers to is that of signing new artists and giving them advances with no guarantee that they’ll return the investment. He cites estimates that only one in 10 artists who sign to labels go on to commercial success. However, there is plentiful data available to indicate whether an artist is resonating with the public, and social media and DIY distribution platforms make it easier than ever for an artist to launch their own career: it’s widely known that labels today expect a significant amount of independent artist development before they make advances.
But even once labels have signed artists, Crispin Hunt says songwriters often take on the A&R work themselves. “I, or my mates like Iain Archer and Jake Gosling, will get phoned up by an A&R man and they say, ‘We’ve signed this fantastic new act and we want you to spend a month writing three or four songs for this person.’ What they want us to do, at our own expense, is develop that artist to a point and deliver them finished masters for three or four songs, and they will only pay for one of those songs, if they use it. They are not doing any of the development and they’re not covering any of the recording costs.”
There’s also an argument that it is the strength of individual songs, rather than loyalty to an artist, that drives music consumption in the age of streaming. Hipgnosis Songs founder Merck Mercuriadis’ belief in the value of songs has seen him spend almost £1bn of investor money on the rights to songwriting catalogues by everyone from Taylor Swift collaborator Jack Antonoff to producer Timbaland to Blondie’s Debbie Harry and Chris Stein.
Mercuriadis says that when he started out in the music business as an A&R in the 80s, 90% of the artists he signed wrote their own songs. Today he states that “90% of the artists being signed rely on outside songwriters for hits”. In the UK in 2020, I calculated that it took an average of 4.6 songwriters per track to write the year’s Top 10 singles. Dance Monkey by Tones and I was the only single in the Top 10 list with one writer – Toni Watson, also the lead artist. “The songwriter is responsible for the most important component in an artist having a hit song,” he says.
In the US, songwriters have been granted a small victory thanks to legislation that says streaming payouts for publishers and writers will rise from 10.5% to 15.1% by 2022. The decision is being revised due to procedural issues although the National Music Publishers’ Association remains confident that the rate increase will be upheld.
The UK government doesn’t get involved in rate-setting, which is decided through negotiations between streaming services and music companies. The fact that the three major labels own the three major publishers mean that no one is truly representing the interests of the songwriter in these discussions, says Mercuriadis. “How can you expect anything good to happen out of that?”