How the Music Industry Was Hollowed Out by Streaming Economics
April 24, 2025 · Frisian News
Spotify and Apple Music pay artists pennies per stream while tech giants pocket billions, crushing the middle class of musicians who once lived on album sales and touring. The shift from ownership to rental has destroyed the economic model that sustained working musicians for generations.
A musician in Stockholm released an album last year that reached 5 million streams. Today Spotify takes a cut, Apple Music takes a cut, the label takes its share, and the artist gets what falls through the cracks. This is not an outlier story. It is the standard arrangement that has broken the income of working musicians across Europe and North America.
The streaming model inverted the relationship between artist and listener. When people bought albums, they owned something. Artists earned money on each transaction because the listener made a choice, paid once, and kept the music. Streaming transformed music into a tap you turn on for a monthly fee. The listener now pays the same ten euros whether they play one song or ten thousand songs. The artists share a pool of revenue that shrank steadily as more music uploaded to platforms. A billion streams in 2015 meant something. A billion streams in 2025 means pennies distributed among thousands of artists.
The record labels claim they have no choice. Streaming services, they say, set the rates and artists have no leverage. This is technically true but obscures a real fact: the major labels negotiated those rates and stood to gain from consolidation. Three labels, Universal, Sony, and Warner, control the majority of recorded music globally. They licensed their catalogs to Spotify at rates that crushed smaller competitors and independent artists. The big labels also own shares in these platforms. They profit from streaming through multiple channels while mid-tier musicians and songwriters face a hollowed-out economy.
Meanwhile, the platforms grew fat. Spotify's market value exceeded 50 billion euros in 2024. Apple and Amazon use music as a loss leader to sell hardware and keep subscribers locked into their ecosystems. None of these companies employ musicians. They host the content, collect the fees, and let the creators scrap over remainders. The engineer, the session player, the songwriter who does not tour, the classical musician who survived on recording work, the small label owner, the music teacher who cut albums on the side, all watched their income evaporate.
Some musicians returned to older models. Bandcamp lets artists keep 80 percent of revenue. Patreon and direct fan support grew. But these alternatives reach small audiences. The bulk of listeners still find music through Spotify or YouTube, and the economics there remain brutal. The streaming platforms show no sign of increasing payouts. They have consolidated their power and can afford to wait out any artist revolt. The industry did not collapse into this trap by accident. It was built.
Published April 24, 2025 · Frisian News