Songwriters: Spotify doesn't pay off ... unless you're a Taylor Swift

Musician Jason Isbell says Web streaming "doesn't add to my income in any way."

Story highlights

  • Songwriters and musicians say music streaming isn't paying the bills
  • Jason Isbell: Spotify and Pandora don't "add to my income in any way"
  • Spotify CEO says he's open to looking for better ways to pay artists
  • Songwriters are working on what they call "fair trade music" plan

(CNN)If you listen to rock or pop, you've heard Desmond Child's work.

And if you were one of the 6.5 million people who listened to Bon Jovi's "Livin' on a Prayer" on Pandora during a three-month span in 2012, you helped him, and his two co-writers, split a grand total of $110.
"We could each buy a pizza," said Child, an inductee in the Songwriters Hall of Fame who has worked with artists ranging from Aerosmith and Kiss to Ricky Martin and Cher. "A large pizza."
    Music streaming apps and sites were supposed to make music cheap -- or free -- for consumers while assuring that the artists who created the songs would be fairly compensated.
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    But musicians and songwriters say they're barely seeing any money from streaming.
    "It's upside down," Child said. "It needs to get back in balance. It's just simply not fair."
    Last week, singer Taylor Swift pulled all of her music from Spotify, saying that the ability to stream her new album, "1989," threatened to hurt sales. Spotify has roughly 50 million users, who either pay $9.99 a month for the service or listen to a free version with advertisements.
    "I'm glad the Taylor Swift thing has caused people to consider it more, because I do think it's an imperfect business model," said Jason Isbell, the Americana Music Association's 2014 Artist of the Year, whose albums are available on the streaming sites.
    The Taylor Swifts of the world can actually make out well on streaming sites -- Spotify said she had been on pace to make $6 million from the app this year. But Isbell said he earns so little in online streaming royalties that he barely pays attention to them.
    "It doesn't add to my income in any way that isn't negligible," he said.
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    In a blog post Tuesday, Spotify CEO Daniel Ek responded to Swift's decision and other artists' complaints.
    "We started Spotify because we love music and piracy was killing it," Ek wrote. "So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time."
    Ek noted that Spotify has paid more than $2 billion to record labels, music publishers and groups that distribute royalties to songwriters and recording artists -- $1 billion of which came in the past year.
    But Child said that money gets divided up unfairly. Too little of it trickles down to the people who wrote and recorded the music, he said.
    Desmond Child says he split $110 three ways for 6.5 million Pandora plays of Bon Jovi's "Livin' on a Prayer."
    Streaming sites treat each stream like a purchase, similar to downloading a song from iTunes. That kind of contract pays a bigger percentage to record labels than licensing agreements, which pay out at about 50-50 between artists and record companies.
    "At some point, they sold the acts some idea like, 'We're promoting your music so you can go out and tour and make money with merchandise and ticket sales and stuff,' " Child said. "But a lot of those artists co-wrote with people like me. I don't get a piece of the touring. I don't get a piece of the merchandise."
    In his blog post, Ek said he's open to exploring ways to compensate writers and performers more fairly.
    Earlier this year, Pandora came under fire for its payment model after singer Bette Midler had complained about it, saying she'd gotten $114 for more than 4 million plays on the site. (Pandora disputed that number.)
    On Wednesday, Pandora compared its service not to record sales, but to a traditional radio station.
    "As the highest paying form of radio, Pandora is proud to play the music of thousands of artists for our more than 75 million users," Dave Grimaldi, Pandora's director of public affairs, said in an email. He noted that, as traditional revenue streams dry up, streaming sites like Pandora are growing.
    "If half of radio listening shifts from terrestrial to Pandora and other internet radio platforms, it will mean billions in additional royalty dollars for performers and songwriters," Grimaldi said.
    Pandora's published rate for at least one form of royalties is .0013 cents per stream, divided among a song's various interest holders.
    Child said he's working with other songwriters such as Eddie Schwartz -- who penned Pat Benatar's "Hit Me With Your Best Shot" -- on a system they call "fair trade music." It would establish guidelines for fair treatment of artists.
    Isbell said he believes that streaming sites should allow a set number of plays of any given song before the site asks users to purchase the music.
    "It would be nice to have peace of mind and be able to know I'll be able to make music for the rest of my life without having to cut anybody's grass but my own," Isbell said. "And I think that's a worry for people who are at my level and the levels below me."
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