Streaming leaves musicians out in cold
.jpg?w=728)
Shin Dae-chul, center, and other artist unions took part in a cultural and tourism industry forum to examine how to deal with protecting the rights of music creators in this digital industry at the National Assembly in Yeouido, Seoul, on April 30. / Yonhap
Highly digitized market fattens service providers such as MelOn and Bugs Music
Guitarist Shin Dae-chul from rock band Sinawe / Yonhap
By Chung Ah-young
The Korean music industry has scaled unprecedented global heights since Psy’s “Gangnam Style” became an international sensation a couple of years ago.
Over the last decade or so, K-pop has been focused on expansion― strong on quantity and quality mostly thanks to the current digital culture, which is crucial for rapidly spreading and sharing music.
Korea became the first consumer market for K-pop, which became more than 50 percent digital in 2006 while the global rate was just 38 percent in 2012, according to the International Federation of the Phonographic Industry’s (IFPI) Recording Industry in Numbers.
But if you look closely at numbers and trends, the Korean music industry is faltering on the brink with declining music revenue.
These thorny issues surfaced after guitarist Shin Dae-chul of rock band Sinawe posted an account of the unfair share of revenue artists receive from digital streaming services on his Facebook page on April 3.
Shin has often criticized music labels and online streaming service providers such as MelOn and Bugs Music, which he claims are benefiting from business models that are choking financially vulnerable artists.
MelOn has been a leading player in the Korean digital music market since it reached a million paying subscribers for the first time in the world and now boasts some 2 million paying users along with 18 million registered users. The provider’s subscription revenue saw more than a two-fold increase between 2009 and 2012. But musicians and rights holders are not benefiting from this boom at all.
“The CD market is dying and now represents only 10 percent of the market. The digital music market is flourishing instead but musicians are getting poorer with only a 6 percent share from the overall revenue in this digital streaming structure ... Under this system, the Korean music industry will collapse soon,” he wrote.
According to his argument, the digital streaming service providers take up 40 percent of the total revenue while 44 percent go to production companies (music agencies). Copyright holders (composers, lyrists and producers) get a 10-percent share while artists receive only 6 percent. If consumers pay 6,000 won per month for a streaming subscription, it gives 0.2 won to a lyricist and a composer and 0.12 won to a singer.
“Many artists make a living by performing in clubs or outdoor events such as university festivals or companies. Rock bands make some money just in summer. It can be likened to novelists who earn money by giving lectures instead of selling a novel. If you know the reality, you can’t let your children get into music,” he wrote.
“I don’t want sympathy from the public. I just want a fair rule for the game,” he stressed. The artist said that Psy should respected but he is just a rare case that can be found among less than one percent of all musicians.
He pointed out that the increasing exposure of music to the public is closely related to success, making more artists and companies resort to cheap music streaming services. “It means large distributors can decide music trends through easy and commercially-driven songs, making indie bands or diverse music genres lose out,” he wrote.
As part of the efforts to fight this unfair structure, he urged musicians to join a new cooperative model to ensure their survival.
Son of guitar legend Shin Joong-hyun and professor of Korea Gaon Arts Occupational Training College, he plans to launch a tentatively named “Fair Music Distribution Cooperative.”
The co-op is designed to protect musicians’ rights and help them create music in a better environment. He claimed that mega distribution companies are preventing artists from getting a fair share from revenue.
“We need a fairer playground. Legal experts and consulting companies are helping us and I believe that we can create a co-op to fix unfairness,” he wrote.
Shin is using Facebook (www.facebook.com/musiccoops) as a platform to share the diverse ideas from multiple levels to form his co-op.
The guitarist took examples of successful co-ops in various sectors, such as the Barcelona football team, Sunkist Growers and the Associated Press. “We can venture into this model in the music industry as well. It will be meaningful for musicians not only to improve the working conditions but also to find better ways for music fans as well,” he said.
Shin said that the co-op will return a bigger share to musicians particularly for young indie artists who are the most vulnerable in this music industry structure. “If my goal is to be realized, more K-pop stars can benefit from this model, too,” he said.
Under his plan, a new music streaming site, including an application for smartphones, will raise the share for musicians by lowering the distributors’ share from 40 percent to 10 percent. His idea has been already attracting attention from artists who are suffering from financial difficulties.
But whether his bold attempt succeeds remains to be seen as some industry insiders cautiously raise the question about the possibility of realization although they agree with his basic ideas.
Their biggest obstacle will be how to fight against the competitiveness of the established online music distributors.
To sharpen the competitiveness, the co-op’s site should exclusively provide popular musicians’ songs but it is unlikely because the majority of popular artists can’t resist the temptation of releasing their music on large music streaming distributors.
Park Eun-suk, a critic of the music industry, said that it is not easy to decide to join the co-op because many musicians belong to their agencies which have different interests.
“Coordinating the conflicting interests will not be easy. Also, the cost of developing the smartphone app and creating the website will also be a daunting task to tackle first,” he said.
Despite these concerns, Shin has succeeded in reigniting the long-overdue debate on the fair sharing of music streaming service revenue.
In the National Assembly, a cultural and tourism industry forum examined how to deal with protecting the rights of music creators in this digital industry on April 30. Shin and other artist unions including the indie artists shared diverse views on the fair distribution of profits from music streaming.