“We need a music industry where artists demand and expect full visibility into their finances — and it’s time that somebody stepped up and offered that solution.”
By Milana Rabkin Lewis
Back in October, Meek Mill tweeted something that perfectly captures the frustrations of being an artist in today’s music industry. Fresh off the release of his Billboard 200-charting fifth studio album, Expensive Pain, the multi-platinum rapper proclaimed, “I haven’t got paid from music and I don’t know how much labels make off of me!!!!!” In a since-deleted thread, he proceeded to ask two seemingly simple questions: “How much have you spent on me as an artist? How much have you made off me as an artist?”
To anyone who doesn’t work in music, it might seem shocking that an artist of Meek’s size has to ask these questions at all. For those of us used to trying to get paid in this industry, this situation is all too familiar. Reading those tweets made me laugh at first, then I got really sad. Then I got fired up—it doesn’t have to be this way.
As someone with over a decade of experience in the industry, including as an agent helping talent navigate the wild west of building and monetizing online businesses, I can’t say I was surprised. 20 years after Left Eye took us to school on VH1’s Behind the Music and broke down how TLC ended up broke after the chart-topping success of CrazySexyCool, the music industry is rife with tales of extremely popular artists who never see a dollar after a label sends them their first cash advance — they’re dealing with terrible deal terms, charges that aren’t disclosed upfront, and a lack of support for revenue streams that a label doesn’t directly participate in.
Despite some of the headlines, I actually think that the industry has become more artist-friendly in the last 5 years. That’s partly because of the pressures from growing independent alternatives, and partly because of a changing of the guard — new executives taking over the helm are trying to do right by their artists in this progressive landscape. I believe in the value that labels provide. They can be essential to making early investments in talented artists with no real performance data and no team. What I can’t get my head around is how these labels can possibly continue to scale and act in the best interest of their artists without better tools. It drives me crazy that in 2022 you can create a million dollar bidding war for an illustration of an apathetic monkey, but the artists who shape our culture can’t get the investment they need because the labels who serve them can’t deliver data about their financial value in a timely manner.
Knowing what I know about what goes on in label back offices, I couldn’t help imagining the conversations that Meek Mill’s tweet had probably sparked behind closed doors: Did Meek’s label partners even know what he was worth, financially speaking? If they wanted to provide him with a full balance sheet of how much money they had spent on him, and how much they were earning from his music, how long would it take? That kind of information should be available to artists at any time, the moment they need it. And yet, most labels are struggling to pay out twice a year — let alone deliver clear and consistent insights about what was spent and what it yielded.
As more and more high-profile artists take to social media to hold their labels to account, companies have been sharing data with musicians where they can. It’s tempting to say that the music industry has a transparency problem, but I’d go one step further and argue that it has a clarity problem: Unless you’re an excel wizard, a data dump full of spreadsheets from different departments will be a recipe for confusion more than anything else. We need a music industry where artists demand and expect full visibility into their finances — and it’s time that somebody stepped up and offered that solution.
Bringing clarity to this industry becomes an even more urgent concern when you consider that artists today are acting more like free agents. It’s becoming increasingly common to see artists jump across multiple labels and distributors over the course of their career — and that’s before we factor in collaborations, live performances, and licensing opportunities. For the managers tasked with sorting through this accounting nightmare, the situation is becoming even more complicated: Today’s artists may be earning revenue from dozens of disparate sources at once, from multiple distributors and label partners aggregating royalties from hundreds of streaming services around the world, to TikTok and YouTube, to video games, fitness apps, and emerging Web3 technologies.
Here’s a controversial statement: I don’t believe most artists want to be independent—at least not in the complete sense of the word. I believe they want to be autonomous. Great art requires collaboration, and great artists need to work with teams that can help them bring their vision to life, whether that’s in-house management, label partners, or even a network of freelancers.
Many artists and their managers want the ability to steer the ship, the freedom to chart their own course, the signals to make sure they’re headed in the right direction. At the same time, many more are willing to trade that control for the greater reach that working with a label can afford. What both groups want is clarity and leverage. Independence and autonomy have been conflated in this industry, and I think Jon Tanners recently offered the best clarification between the two: “Autonomy is the ultimate goal—the capacity for self determination,” he writes. “It’s not purely a matter of who owns and exploits the copyrights, it’s about data ownership and platform control.”
The reason why many artists prefer the path of independence is because it’s the only way they can be in the position to get performance and financial data without interference. Spotify for Artists set a new standard for access to performance data, and it’s time for financial data to catch up.
Thanks to apps like Square, a small business can automatically determine how much net revenue it’s actually earning in real time when you factor in the cost of inventory, rent, and staffing. When I was working as an agent, I could see that the technology was possible for the kind of up-to-the-moment revenue and expense tracking that could give musicians a comprehensive picture of their business, but nobody was building tools that could be actually useful for my clients. Half a decade later, it can still seem like the record industry is trying to navigate the unique accounting challenges of 2022 using software built in the early 2000s.
Imagine a world where an artist could upload a new single and that same week access insights about how much money it was generating across different streaming platforms, in addition to the various expenses they needed to recoup before they could see a return. Imagine if that artist could share those insights with all of those collaborators who helped bring that song to life — and immediately route a percentage of all earnings to a guest vocalist or producer once they recouped. Imagine if a producer or songwriter could log into a dashboard and see how much revenue their songs were generating across various distribution partners.
Now imagine what they’d do with that clarity. Would they be able to double down on marketing in territories that were really earning them money instead of making decisions based on vanity metrics like views and likes? If a producer were able to trust that they would get paid as soon as a song starts streaming, would an artist still have to front-load them with cash to get them to work with them? Or could that artist start working with collaborators they thought they could never afford?
Since founding Stem in 2015, we’ve been working to provide musicians with the payment processing tools that allow them to take advantage of opportunities like this every day. Based on my conversations with people at all levels of the industry, being able to keep track of earnings, expenses, and payouts in one place — and offer artists visibility into exactly where every dollar is going — would certainly empower labels, managers, and other industry players to make more strategic business decisions as well.
When a musician—or a songwriter, producer, or label—has visibility into their business, they gain the ability to make choices that serve them. That could be choosing to forgo an expensive recording session in Malibu that will take a year to pay off, or deciding on a label for their next release, and on what terms. Choosing the right partners shouldn’t come at the cost of visibility into your own finances. And when artists can easily decide to take their business elsewhere, it’s in a label’s best interests to get with the times. Financial clarity fosters a greater degree of accountability on all sides, and with greater accountability comes trust.
It’s 2022: why are labels satisfied with sending paper statements a couple times a year? You should have a dashboard that tells you exactly how much you’ve invested in an artist, and it should be simple for you to share that data and make payments. Artists are constantly looking at vanity metrics about their listeners or their fans on social media, and you wonder why they want to spend their whole budget on a music video. Let’s give them the information they can actually use.
Milana Rabkin Lewis has architected and enacted an artist-first financial ecosystem for the music industry as co-founder and CEO of Stem. Recognized as part of Variety’s 2020 “Up Next” and Billboard’s 2020 “Indie Power Players” lists, Milana spearheads Stem’s mission to foster long-term sustainable success for the industry at large, paying out over $200 million to 40,000 recipients since 2015. This week, the company announced a $20 million round of funding from QED Investors and Block (formerly Square).
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