Exploring the 2.99% Royalty Rate: A Deep Dive into Music Licensing

Music Explored Podcast

The episode elucidates the stark reality that music creators receive a mere 2.99% of the revenue generated from streaming platforms, such as Spotify, in Canada, a figure that significantly undermines their financial viability. This percentage, dictated by the Copyright Board of Canada, is distributed by SOCAN among songwriters, composers, and producers, further exacerbating the challenges faced by artists reliant on these meager payouts. The discussion highlights the systemic issues within the music industry, particularly during the COVID-19 pandemic, which has intensified the financial struggles of creators. We delve into the complexities of music licensing and the calculations that determine royalties, revealing that the average payout per stream is approximately 0.0084, an amount that barely qualifies as compensation. This conversation serves as a crucial reminder of the importance of transparency and advocacy for fair compensation in the ever-evolving landscape of music distribution.

Takeaways:

• The current license fee paid by music services platforms in Canada is set at 2.99%.
• SOCAN distributes the 2.99% license fee among songwriters, composers, and producers on Spotify.
• The Copyright Board of Canada plays a significant role in determining the set rates for royalties.
• Artists receive approximately 0.0084 per spin on Spotify, which is significantly less than one cent.
• The disparity in revenue between creators and platforms like Spotify is a matter of grave concern.
• To maximize exposure, artists should disseminate their music across all available platforms simultaneously.

Companies mentioned in this episode:

• SOCAN
• Spotify
• CBC Radio
• Nielsen