Dan Le Sac Writes

Dan Le Sac Writes: Geoff Barrow says he made £1700 from 34 million streams. Let’s do maths!

By | Published on Thursday 16 April 2015

Earlier this week, Portishead’s Geoff Barrow went public with the amount of money he’s earned from streaming. He did so in a tweet, which is not necessarily the best place to discuss finances. But Dan Le Sac is here with his calculator to reverse engineer the figures and try to get to the bottom of how much money Barrow’s music is generating and where it’s going.

Geoff Barrow

On Monday evening, Geoff Barrow of Portishead took to Twitter to berate Universal Music Group for “giving [his] work away for free”…

At first glance those numbers are shocking, almost vomit inducing, but a few moments after reading those tweets – as I was counting to ten before reacting – my cogs got to turning and I started to think that can’t be right. 0.005 pence per stream (five thousandths of a penny) seems obscenely out of whack with the half a penny-ish I see from, say, a Spotify stream.

Now I’m not disputing Mr Barrow’s numbers, and I’m certainly not challenging him to a duel or anything. That said, I would go for a close range naked paintball battle – I’m chubby so I can take the punishment. But I do think that those tweets don’t tell the truth of the situation, there’s far more to take into account than that final figure.

Before an artist sees any money from a streaming service it passes through many many hands, so let’s work backwards and see where it went before it reached Mr Barrow. Now, as I don’t know the inner workings of Geoff Barrow’s business, I’m going to have to resort to the sort of generalisation and speculation I despise, but I’ll try to err on the side of caution.

Something to note, though, is that said streams could come from radio-type services, like Pandora, which pay a way lower rate than Spotify, or could even be unmonetised YouTube plays (no ads), which earn even less again. Also, due to the nature of the music industry accounting, this money could relate to streams from a couple of years back, and a lot has changed in the last few years.

Anyway, let the guesswork begin, and as I’m a studious dickhead, I promise to show my workings.

First, Geoff took tax out so lets add it back on. I’m going to assume he’s talking about income tax, ie not VAT, and also assume that Barrow runs his finances through a limited company, as many artists do, so we’re talking about corporation tax at 20%. For simpler maths (as we are already estimating here), let’s do that sum as £1700 x 1.2 = £2040. Then let’s add the other members of Portishead back into it. Let’s say that on average revenues generated by their recordings get split equally between three performers, £2040 x 3 = £6120. That’s the creators dealt with.

Onto the industry. Before artists see any cash at all, it goes to the record label. Now, what the artist sees is hugely dependent on the deal they signed, but let’s assume Go! Beat (now dormant but part of UMG) did Barrow et al a 50/50 arrangement – even though the label could be keeping significantly more – but to estimate what sum hit the label we’ll go with £6120 x 2 = £12,240.

The label may also use a distributor or involve other middle men (or women, of course) to deliver content to the streaming services, who will certainly take a cut. And even if the label does the distribution itself, the division of the record company doing the distributing might charge a fee or commission. Now, I’m not 100% what would be involved here, but I think it’s fair to say 20% is taken out of the mix before the 50/50 split occurs. £12,240 x 1.2 = £14,688.

And of course the streaming service also has to pay the publishers, songwriters and performing rights organisations which together control the copyright in the songs. We don’t know exactly what they are being paid, because it depends on the deals – often subject to NDAs – made by the publisher and/or collecting societies involved, but together they could be seeing about a fifth of what the label sees. So, £14,688 x 1.2 = £17,625.60 Boom.

So, £17,625.60 left the streaming services before getting to Barrow as £1700. If we use Spotify’s model, the streaming service kept roughly 30% of monies generated by the streams, so in total those 34 million streams earned… erm… hang on… ((£17,625.60/70)x30)+£17,625.60 = £25,179.42. Or 0.074 pence per stream. Still atrociously low, but closer to the truth.

“What does it all mean?” I imagine the four people who have continued reading this far are crying. Well, it serves to illustrate what Geoff Barrow’s 34 million streams made for the industry, and why artists get so pissed off with the streaming model.

For those streams, Mr Barrow saw less than 6.75% of the money he created, and the band saw less than a fifth of what they created. For an industry that only has one product, the music that artists like Geoff Barrow create – and, to be fair, he does it better than most – does it seem right that the creators get such a tiny share? Ultimately, asking for your fair share isn’t greedy.

It also serves to illustrate that this issue and our industry are far from transparent. Deals within deals within deals push artists and audience alike away from the truth of things – without knowing who is paying whom, what and when, how can any of us form an honest opinion?

One final note, the preceding 700 word, highly speculative, occasionally inaccurate ramble has highlighted something to me: Although I feel “us” artists are justified in their complaints toward new music models, Twitter is not the best place to actually discuss them. That 140 character limit isn’t really helpful when trying to explain the actual depth of a problem. Twitter is for death threats to celebrities or reposting jokes you stole from stand up comedians, isn’t it?