What happened to Napster, you ask? The name alone probably conjures up memories of late nights spent downloading music, a digital free-for-all that shook the music industry to its core. Zip ahead to the present time. As Napster gets sold for the umpteenth time, I’m forced to ask – have we REALLY not learned anything about how to compensate artists in the digital age?
From campfire gatherings where melodies were passed down through generations to the invention of the phonograph by Thomas Edison in 1877, music has always been a shared experience. Just like television a couple decades later, radio opened the door to commercializing music, particularly in the early 1900s. Enter the compact disc in the 1980s, providing an exciting new format for listening to all our favorite jams. Every technological leap fundamentally altered how we consumed music, but the arrival of Napster was different.
Napster, for everyone too young to remember, was the original free music juggernaut. Literally overnight, their entire catalogs were at your fingertips, often at no cost to you. When I was a college student, I took every chance I could get to rip track after track. Of course, I never gave a second thought to those artists who laid claim to the sounds. At the time, it felt such a big revolutionary move, like a rebellion against the status quo enforced by record labels and marked up prices.
Here's the rub: while it felt good to get music for free, it was undeniably crippling the artists. Royalties dried up, record sales disappeared, and artists could no longer afford to be musicians. Copyright infringement aside, Napster was soon shut down, but the genie was already out of the bottle. One thing was clear—the digital music landscape had been irrevocably altered.
The 2010s delivered us the advent of streaming, or so we thought, a game-changing cure-all. Platforms like Spotify and Apple Music offered vast libraries of music for a monthly fee, with the promise of royalties for artists. It looked like a win-win at the outset. Consumers would have access to a remarkable breadth of music that might otherwise remain undiscovered, and artists would be compensated fairly for every listening experience.
Truth has turned out to be much more complex. In fact, the outlandishly low royalty rates paid by streaming services, typically just a few tenths of a penny per stream, are the poster child for this. For those artists who have already made it, racked up millions of streams, this can mean a pretty cushy income stream. For indie musicians and newcomers, that’s usually insufficient to even pay for the basics of life.
Which brings me again to the Napster sale. While it exists today in a vastly different form – a legitimate streaming service – the name still carries the weight of its controversial past. Seeing it change hands once again has me questioning whether we are fated to keep making these same errors. Are we really doing right by music and musicians? Or are we merely learning new ways to exploit their works for our own commercial gain?
The real crux of the matter is the power shift. The entertainment industry’s major corporations have a chokehold over these distribution channels, continuously dictating the terms and conditions to artists. As with any peers in similar situations, individual musicians have zero bargaining power to advocate for equitable terms. It’s time to stop putting the interests of these corporations whose profits have already been maximized ahead of a fair pay system for creators.
So what’s to be done? We believe there are two things consumers can do to be more mindful. Nothing beats directly supporting artists, by purchasing their music, going to their shows in person, and buying their merch. We need to push for policies that support artists rights. We MUST make sure that they are being paid equal and equitable fair royalty rates from streaming services!
Artists on their part have to be a bit more intentional too. Registering creative work with the US Copyright Office creates a public and legally recognized declaration of ownership. Registering with Performing Rights Organizations (PROs) such as BMI, ASCAP, or SESAC allows you to start earning and collecting performance royalties. Likewise, Mechanical Rights Organizations (MROs) like SongTrust or MCPS gather mechanical royalties. Selecting digital music distribution platforms that are committed to paying artists many times more royalty payments with full transparency is key. Finally, negotiating fair record contracts that clearly outline royalty rates and payment terms is essential for those working with labels.
OverTraders.com is committed to bringing you the very best in market analysis for financial markets, and that extends to the professional music market as well. We’re committed to ensuring that artists and traders alike have the resources to be informed and prepared to navigate these exciting technologies. Much in the same way we support smart policy and investment decisions, we support a fair equitable and sustainable music ecosystem.
The saga of Napster should be a cautionary tale. It serves as a cautionary tale to the consequences of unregulated technology and corporate interests run amok. We hope you’ll join us in creating a fair and flourishing music industry that nurtures creativity and rewards pioneering artists. Together, we need to make sure that artists can continue to prosper in the digital age! We shouldn’t allow Napster’s ghost to haunt us for all eternity. Whatever your story, it’s time to join the fight for equitable music for everyone.
