Can Canadian songwriters survive? As their income plummets to poverty levels, many find themselves making tough choices
By Nick Krewen
Special to the Star
What do the Beluga whale, the wolverine and the full-time Canadian songwriter have in common?
They’re all on the endangered species list.
While humans may be contributing to the extinction of the first two, it appears that for the third, digital streaming is hastening the demise of the profession responsible for creating the music industry’s very lifeblood.
On July 31, U.K.-based MIDiA Research published a report called “Songwriters Take the Stage / A New Playbook for a New Era” that pretty much confirmed the new reality that has taken hold since 2017, when streaming overtook physical sales of music.
Quite simply, songwriter income has plummeted to poverty levels.
Of the 300-plus tunesmiths surveyed by MIDiA, only 10 per cent earned more than US$30,000 yearly, and 67 per cent said that their greatest challenge was the “lack of meaningful streaming income.”
The percentage of respondents who received between $0 and $1,000 for their efforts: 54.
How is the situation in Canada?
Toronto-based Arun Chaturvedi, a composer whose credits include such U.S. shows as “Keeping Up With the Kardashians” and “General Hospital,” and who serves as president of the Songwriters Association of Canada, says it’s not pretty.
“I see people leaving the business, that’s for sure,” Chaturvedi said in an interview.
“All my friends, colleagues, members of the SAC, are having a hard time making ends meet.”
The biggest reason is that what once was considered a business of pennies now deals with tiny fractions of a cent.
Songwriters and composers derive much their income from two royalties: mechanical (covering physical and digital sales, streaming and social media) and performance (covering public performance on TV and radio and in live concerts). A writer usually hopes to sign with a publisher who can exploit a song in exchange for typically assigning that publisher 50 per cent of the copyright.
From 1924 until 1989, Canadian songwriters and music publishers would receive two cents every time their song was successfully exploited through a sale. In 1989, after negotiating with record labels, the songwriter and publisher would split 5.25 cents. The current rate sits at 9.1 cents.
In the past, when a physical album sold one million copies, someone who placed three songs on it — for a total royalty of 27.3 cents, leaving them with 13.7 cents after the split with the publisher — could expect a windfall of $136,500.
But when streaming caught fire, per-stream rates were suddenly less than one cent, with the most-quoted per-stream rate averaging an estimated $.004 — less than half a cent.
However, Greg Jarvis, founder of the Toronto indie-rock orchestra the Flowers of Hell, says the per-stream figure is misleading. He contends that the final amount of the digital stream royalty is calculated not by rate, but by stream share.
“In streaming, there is no per-unit figure,” he explained. “First, off the top, the money is split 70/30, with 30 per cent going to the streaming service.”
The remaining 70 per cent is divided among the artist, label, distributor, music publisher, performing rights organization (or PRO, which tracks the performance of songs around the world and collects royalties) and songwriter. The recording side receives 55 per cent of the pie; with the songwriter/publisher/PRO receiving a combined 15 per cent, of which the songwriter earns 68 per cent.
Using the $.004 rate-per-stream figure as an example, it would not be unusual for a songwriter to earn as little as $.0002856 every time their song is streamed.
Multiply that $.0002856 by, say, a half-million streams and that’s $142.80 going to the writer. And if the song was written by more than one person, that minuscule amount would be divided further.
But, as Jarvis explained, the rates are not solid. The stream share is a liquid amount of revenue determined by an artist’s volume of traffic on the digital service provider, which is subject to change. Different subscription tiers further skew the royalty calculations.
Jennifer Brown, CEO of SOCAN, a Canadian PRO representing more than 185,000 songwriters, composers and music publishers, agrees.
“What you’ve got is a percentage of revenue and the number of streams that you’re paying out,” Brown said. “A per-stream rate is always going to change on different services. Even Spotify (without ads) is different than Spotify (Premium), and Apple is a different beast.”
If there’s any irony in this complex, convoluted system of compensation, it’s that music streaming has never been more popular or more lucrative.
Statista, a German global data and business intelligence platform that covers 170 countries, recently reported that digital streaming revenue in U.S. dollars leapt from $2.6 billion in 2015 to $19.3 billion in 2023, and now accounts for more than 67 per cent of total global recorded-music revenue.
It found that in the second quarter of 2022, the number of global music-streaming subscribers jumped to 616.2 million from 304.9 million in 2019, numbers that do not cover monthly active users who are not subscribers.
“It’s definitely been an interesting dynamic with streaming,” said Brown, whose organization reported 2023 record royalty collections of C$523 million, with a record $119 million of that amount in international revenue, a double-digit increase from 2022.
Brown said that despite this increased revenue, many SOCAN members are receiving minimal compensation for their efforts.
“Our financials keep increasing because digital streamers are bringing on more subscribers,” she said. “But there are so many more streams and so many more people being paid.
“What that means is, often it’s micropayments.”
While the bell may be tolling for non-performing songwriters who rely exclusively on composition for their income, it’s not all doom and gloom.
Margaret McGuffin, CEO of Music Publishers Canada, says the biggest change for Canadian songwriters and independent publishers is that their music is increasingly being heard around the world.
“When we surveyed the industry 18 years ago, only 25 per cent of their revenue was coming from foreign sources,” McGuffin said.
Data for 2023 showed that 80 per cent of Canadian independent publishers’ revenue is derived internationally. “There’s a lot more opportunity with streaming for publishers and their writers to target audiences for songs that may not even ever be heard in Canada.”
The Flowers of Hell’s Jarvis suggested that increased streaming subscriptions would lead to higher artist and songwriter revenues.
“The way the model’s set up,” he said, “if 10 times more people subscribed to streaming services, everybody would have a zero added to their cheques.”
SOCAN’s Brown says it also would be advantageous for streaming services to raise their prices.
“It’s interesting that most services … haven’t (done so) since they launched,” Brown said. “It would be nice if the pie could grow and we could actually have more money flowing through. It would also be nice for the (digital service providers) to come to the table and talk about how we could make this work better.
“It’s in their interest, obviously, to have songwriters see a viable path for themselves and having new songwriters get into this business.”
The 2023 passage of Bill C-11, the Online Streaming Act, which subjects platforms to Canadian content requirements and regulations, and forces them to invest in Canadian content and creators, promises to be a boon.
Also, McGuffin said, TikTok, Meta (parent company of Facebook and Instagram) and Snap Inc. have finally agreed to pay for music usage on their platforms.
And there are still some conventional and potentially lucrative sources of songwriting income available, including radio airplay and song placements in film, TV and ads, otherwise known as syncs.
“As a writer, I have had that good fortune of songs in TV shows, on cable and network TV, and being paid really well,” said Chaturvedi.
But to those contemplating songwriting as a full-time profession, Chaturvedi has some advice.
“Don’t quit your day job,” he said. “I’m kind of half-joking.”
A performing artist who is also a songwriter, he added, can often leverage their celebrity into a licensing deal and make money touring and selling merch. “But if a songwriter’s income stream is gone, they’re going to leave the market or they’re never going to start,” he said.
“And if young Canadian songwriters don’t see a a viable way to make money, they’re just not going to do it. And then you lose Canadian voices, you lose Indigenous voices, all of these things. It’s kind of a shame.”