Music creators deserve better from Big Tech

Big Tech’s deeds are catching up with them. Forget the nonsense about efforts to deal with disinformation showing anti-conservative bias – Facebook and Google are now being pursued by the Department of Justice, the Federal Trade Commission, and several states, not for censoring lies but because they’re old school monopolists. Meanwhile, musicians are demanding Spotify and YouTube pay fairer royalties and stop pirates from stealing their work. But these colossuses still stand astride the modern internet, curating our digital lives and monetizing your every click, heedless of the damage to our politics, our communities, and our culture.

What’s their defense? One recent answer seems to be the laughable claim that the real “bigness” problem isn’t these giant platforms, it’s the record industry, a claim transparently designed to distract and deflect from the rising heat on Big Tech and utterly at odds with the facts of the modern music business.

While a few large firms play a major role in the production of recorded music today, independents claim more than a third of the market and license collectively through the Merlin platform with more market power than Warner Music, one of the major labels. The strength of independents reflects the reality – understood by musicians and their audience alike – that there more ways for artists to get music to market and fans to find and hear it than ever.

DIY services such as SoundCloud and Bandcamp let artists market directly to fans while distribution networks like CD Baby and TuneCore plug them into global streaming platforms. Studio quality home recording systems like ProTools and Abletonallow artists to record release-ready music without massive studio costs while social media networks and viral platforms like TikTok provide new avenues for marketing and promotion. It all adds up to a world in which artists have more options than ever – which explains why, of all market segments, artist direct grew the most last year.

In the past, labels had distribution channels and logistical strength that allowed them to put records and CDs into racks and bins in stores. In that world, one could at least argue physical barriers to entry created some sustainable advantage. But the rise of streaming has upended old models – creating a flat new ecosystem where everyone can compete on fairly equal terms for playlist space, likes, and shares. Today, if an artist signs with a major or independent label, it’s because she thinks they have something to offer, not because that’s her only choice.

The result is dwindling power for the “major” music producers. Think about it – do you worry companies such as Universal, Sony, or Warner are going to tell Spotify, with its vast 345 million user base, it can’t stream their music? Or is it more likely Spotify or YouTube will look at the constellation of companies and individual artists trying to get on their platforms and force them to accept cut-rate terms that would, in a more competitive market, be unacceptable?

How do they get away with it? To start, these companies have old-school market power – the three top streaming services have a larger market share than the record companies they decry as anti-competitive. And they are gatekeepers for a modern, datadriven, eyeball (or eardrum) economy. Services like Spotify have become an indispensable filter through which artists reach the public – broadband pipes have supplanted racks and bins. And their data holdings and algorithmic power make them tastemakers far beyond any radio-era DJ.

That’s why the nation’s music creators have been clamoring for platforms to pay fairer rates, negotiate licenses to cover the music they use, and contribute to a more sustainable music ecosystem.

The nation’s performers have been in forced hibernation during the pandemic. In a world of pressing essential services, the people who entertain us may seem extraneous, but they are an important wellspring of society’s character and values. They deserve a fair shake, not bogus “look over there” red herrings.

Rather than distracting us with claims that don’t hold water, the streaming services should crack down on piracy, and pay royalties that reflect a competitive market. As music enters new markets such as video games and fitness apps, content creators deserve to be paid for their work. That’s not an onerous imposition. TikTok has already entered into a licensing agreement, but others have not.

The internet was born amid visions of a truly open landscape where innovation and creativity could take root. But it has been transformed into a province governed by large platforms with market power that allows them to curate your experience and direct traffic in self-serving ways. The once-imagined open and competitive landscape is not beyond our reach, but we have a long way to go to restore it.

Ev Ehrlich