The Australian music industry has long felt angst about the new digital world, with good reason: between 2006 and 2015, Aria figures show, revenue for Australian record labels fell from $512m to $334m.
The labels themselves are hoping that streaming services will arrest this decline, and have negotiated generous deals with Spotify and Apple Music to that effect. But the artists themselves remain unimpressed: it seems like every week there’s some financially canny musician from here or abroad pulling their music from Spotify or explaining that hundreds of thousands of streams on these services barely add up to the price of a smashed avocado.
In this context Thursday’s news from Australia’s publishing and mechanical royalties collection society is heartening. Apra Amcos announced a record annual revenue figure, $333m, for the 2015-16 financial year. This marks an 11% rise from last year, much of which comes from a 140% increase in revenue from streaming services. And of that $333m, $294.6m has gone back to the artists – 248,994 songwriters and publishers, to be precise.
The figures show the myriad ways that the music industry overall is adjusting to the decline in income for record companies. But while that 11% rise in revenue certainly can’t hurt, it’s a rare Australian musician who could sustain a career on just the yearly Apra Amcos paycheck.
Trying to explain publishing and mechanical royalties makes most people’s eyes glaze over. So instead, here’s a story. In the early 1990s the singer-songwriter Nick Lowe was dumped by his record label. His late-1970s heyday – when he had both a successful solo career (Cruel to Be Kind) and a successful career as a producer – was long gone. In fact, Lowe was pretty close to broke. One day he visited an ATM, unsure if there would be any money in his account at all. Instead, he was surprised by a balance that, in the early 1990s, could have bought a house or two.
Apparently, the blue-eyed soulman Curtis Stigers had covered Lowe’s song Peace Love and Understanding on the soundtrack to The Bodyguard. Every time a copy of that soundtrack got sold, Lowe was entitled to a few cents’ worth of royalties. Because people still bought albums in the early 90s – and because that soundtrack also featured Whitney Houston’s megahit I Will Always Love You – Lowe got a payday.
It’s these few cents that Apra Amcos collects, adds up, and pays out. If you wrote a song or own the rights to a recording, you’re owed money each time that recording is used. If you hear a song in a cafe, Apra Amcos collects a small royalty for the artist. They also collect royalties for music played through Spotify, on radio stations, or on TV.
But we’re not all Nick Lowe. Most of the quarter of a million songwriters who got a payout likely just made spare change. Australia, with its population that’s less than a 10th of America’s, is simply too small to sustain many musical careers.
It’s the major record companies and the big tech companies who own the streaming services that get the best deal these days – the labels get big lump sums from Spotify, for example, that they’re not obligated to share with the artists. Musicians with tens of thousands of Spotify listeners simply don’t make the same money as musicians selling tens of thousands of records, in most cases. And as more and more people sign up to streaming services and offload their CDs (revenue from sales of physical product was about the only revenue stream for Apra Amcos that decreased, from $12.5m to $12.4m), this becomes a real problem.
So while an 11% increase in revenue is good news for the industry as a whole, band members whose songs are played regularly on Triple J will still be lucky to crack the median wage this year. Your favourite DIY indie band, meanwhile, would be lucky to break even. In reality they’re funding their music with money from their actual jobs and/or credit cards.
The increase in Apra’s bottom line, especially from streaming revenue, will definitely help a band or two – for many musicians, that monthly deposit can be a godsend. But royalties aren’t going to change the reality of being an Australian musician. In fact, it’s no wonder so many Aussie bands head overseas: $39.1m of Apra Amcos’s 2015-16 revenue came from royalty agencies abroad, the majority of which will go into the bank accounts of international successes like Gotye and Courtney Barnett.
Apra Amcos do vital work in facilitating new ways to make money from music. But if you see the news of record-breaking royalty revenue, and tell your musician friends that the next round is on them, don’t be surprised if they reply through gritted teeth.
