Big music blames streaming for its ‘woes’ but industry is doing just fine

The annual Grammys award show is full of glamour and fantastic entertainment featuring incredibly talented artists and musicians. Grammys On The Hill, on the other hand, is the event’s corporate, big music, obnoxious cousin. Every year at this time, big music executives and a pocketful of artists descend upon Washington not to delight and amaze, but to cry poverty in the hopes of changing the laws around music licensing.

Today, the big multinational and multibillion dollar music labels will share their sob stories with members of Congress. They’ll attempt to convince policymakers that a lack of royalties for radio play hurts musicians, that songwriters deserve to make more and that streaming is harmful to music’s health.

{mosads}Over the last decade, how we listen to music has transformed, giving consumers the power to choose what, when and how we listen to music — whether it’s on the radio, satellite or via streaming platforms. Innovation has changed the game. As I’ve said so often before that I’m now becoming a broken record, there’s no putting the technology genie back in the bottle.

But for the labels to be lamenting to Congress about their faded fortunes in this environment is a pretty ridiculous line of argument. Three music labels, Universal (owned by Vivendi), Sony, and Warner Music, account for 70 percent of all music revenues — meaning they still hold the purse strings.

And despite what they say, there’s more money going into that purse than at any time in recent history. The music industry reported last week that it had its best year in two decades. According to the Record Industry Association of America (RIAA), total U.S. retail sales from recorded music rose 11.4 percent last year, to $7.7 billion.

That’s great news that the labels should be celebrating. But that’s not the way the Big Three operate. They smell blood in the water and, like a pack of hungry sharks, they’re attempting to squeeze the rest of the industry in order to grab more for themselves.

They tell artists that the streaming platforms and the radio stations are to blame. They put up a united front before Congress, saying that we’re all in this together and that together we can fix the music industry.

Sadly, artists won’t realize the full benefit of growing record revenues because the music labels have done everything possible to preserve their pro-label, anti-innovation business models instead of embracing new technologies and the operational, market and marketing efficiencies they offer.

Like taxis fighting the consumer-friendly advent of companies like Uber and Lyft, record labels refuse to change. They still work “breakage” fees into their artist deals, which was money that was originally meant to cover the cost of records or discs broken in transport. In the streaming world, that’s no longer an issue and it is but one tangible example of money that’s being funneled away from artists not by the streaming companies, but by the labels.

To find the voice of reason on all of this Grammys On The Hill have only to look to this year’s honoree: country music star Keith Urban. The Australian-born singer is one of the biggest acts in America and he’s beloved by music fans of all ages so it’s no surprise that big music would want him,not the corporate titans behind the curtain, as the face of their lobbying rodeo.

But he recently commented to Politico that he doesn’t share the same distaste for streaming platforms as his label overlords, stating that, “Owning music feels like a very foreign concept to me. Buying someone’s album feels odd to me. … But streaming to me seems to be a very obvious, fluid, quick, logical way for music to be heard in this day and age.”

And when asked about one of the main complaints of the Grammys On The Hill crowd, that they should be getting paid for radio spins, Urban very candidly said he still finds AM/FM radio to be a useful promotional tool that helps him reach fans. “A huge amount of my audience still listens to radio,” he told Politico. That’s where they get a lot of my music.”

For years, the labels have been clamoring for royalties for radio play. They claim it’s unfair that radio stations can spin hit songs and pay songwriters but not artists for the right. But if traditional radio play is so important to a huge star like Urban, the only reason the labels are seeking to alter the landscape is to further enrich themselves. This isn’t a rising tide argument. This is a testament to the self-aggrandizing nature of the record labels and their unending quest for greed.

We need to take a new look at how the big music is organized, subsidized and supported by Washington. And that should start with one simple word: transparency. Congress should ask the labels to detail how much of the $7.7 billion in revenues it took in last year went to  the artists they purport to represent. Get granular. Details are our friends.

Despite the whining from big music, what the RIAA revealed last week is that business is booming — for them. It’s time to stop catering to the record labels and create a system that is fair to everyone, rather than allowing the labels to continue telling their dirty little lies about the nature of music licensing laws.

Mike Montgomery is the executive director of CALinnovates.

The views expressed by contributors are their own and are not the views of The Hill.