• Music Tectonics

The Question: Have Tech Companies Taken Advantage?


We asked a half dozen leaders in the music and technology field:

Do you believe that tech companies have taken advantage of artists and labels in terms of fair payment?

Vickie Nauman Founder/Owner of CrossBorderWorks

I've personally witnessed the gamut on both the licensee and licensor side -- there is no shortage of examples where nefarious practices come in the way of getting business done and getting everyone paid.

Sharky Laguana Founder/CEO of Bandago

Tech companies are trying to build profitable companies, just like everyone else in the value chain. Villainizing tech companies accomplishes nothing and will not persuade them to change their behavior. The public isn't very receptive either, because they love the music that tech companies deliver. They view labels with suspicion, and think of artists as being "stuck in the past". In order to create a healthy ecosystem, artists will need to make an economic case to labels and platforms as to what changes need to be made - or build their own platforms if no one will listen.

Stephen White CEO of Dubset Media

There are any number of examples of companies that have built big valuations by exploiting music without properly licensing and paying. I believe there are many examples of technology companies building businesses on the backs of music and content creators without fairly paying them. The music industry has been quite complicit in this behavior by allowing this exploitation to occur. However, to generalize that all tech companies have taken advantage is not fair. There are many examples of tech companies that have done the right thing and worked with the music industry to license appropriately - often to their detriment. Until the music industry is ready to embrace technology and reduce the licensing friction for tech companies this cycle will continue - often benefiting the big labels and tech companies at the expense of the artist and songwriter.

Tom Silverman Founder of Tommy Boy and New Music Seminar

Some tech companies have used music as "content" and tried to build companies off the creative output of artists and songwriters under the flag of "promotion." Rights holders have learned the value of the impressions that music and music artists command and are finally negotiating fair share of revenues and equity with the services.

Jim Griffin Co-Founder of Pho and Managing Director of OneHouse

Media and mediums have a mutually supportive relationship, but they are bound to bargain over the rates and details, and these negotiations are inherently adversarial. There is a dollar in the middle of the table that will be split and spent. Who gets what part of the dollar? These questions will always bring friction akin to employer-employee relations, but in the final analysis they need one another. And remember this: There is no switch for turning technology or networks off. They are bionomic, like a river. We must address their global consequences.

Paul Wiltshire Founder/CEO of Songtradr

It's impossible to answer this definitively in the positive or negative as there are so many examples of questionable exploitation and vice versa. Fair payment for independent artists has been inevitably compromised by overarching deals enforced by major labels over technology companies. For example, if Spotify’s subscription and advertising revenue is not sufficient to pay the upfront usage fees required by the major labels, how as a business can they entertain paying higher streaming rates? This begs the question; have the major labels taken advantage of tech companies and in the process constricted the value of music -- especially for independents?

music techtonics is a publication of rock paper scissors, a music and tech public relations firm

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