Music Industry Tackles Digital Valuation

The music industry convenes to debate the value of digital music, as Apple Music and Spotify clash over free tiers. Publishers and songwriters demand higher compensation, citing losses from bundling and social media, advocating for a healthier creator economy.

The air in New York City crackled with a familiar tension this past Wednesday, as the music industry gathered for the National Music Publishers’ Association (NMPA) annual meeting.

It was a summit that quickly devolved into a philosophical skirmish over the very soul of music itself, or more accurately, its price tag in the digital age.

At the heart of the debate stood Oliver Schusser, Apple Music’s top executive, who didn’t mince words, calling it “crazy” that, two decades into the streaming revolution, music is still offered for free.

Schusser, Apple’s vice president of Apple Music and international content, articulated a purist’s stance.

He declared, “As a company, we look at music as art, and we would never want to give away art for free. It makes no sense to me.” (source)

His declaration wasn’t merely a business strategy; it was a deeply held conviction.

It positioned Apple Music as the lone bastion against the perceived devaluation of creative output.

Unlike virtually every major competitor, Apple Music steadfastly refuses to embrace a free, ad-supported tier, a position Schusser affirmed would not change.

This unyielding stance, while perhaps admirable in its artistic conviction, inevitably drew a sharp contrast with the industry’s dominant player, Spotify.

A spokesman for the streaming giant was quick to defend their multi-tier model.

He highlighted that Spotify paid out over $10 billion to the music industry in 2024, claiming the mantle of the largest revenue driver. (source)

Their argument is pragmatic: the free tier is a crucial funnel, a gateway for music enthusiasts.

“More than 60 percent of Premium subscribers began as ad-supported users,” the spokesman revealed, framing their approach as a proven blueprint for conversion and sustained growth.

Yet, this philosophical divide over free versus paid access is but one facet of a larger, perpetually hot-button topic within the music industry: how to maximize music’s value. (source)

Streaming, once hailed as the savior that pulled the industry back from the brink of rampant piracy by offering convenience at an affordable price, now faces its own existential questions.

Executives, even those leading record labels, argue that the services could and should be priced higher to truly reflect music’s worth.

Sony Music CEO Rob Stringer, for instance, previously advocated for a “modest fee” even for ad-supported platforms, underscoring a growing sentiment that the perceived value of music has been diluted.

The NMPA meeting served as a crucial platform for publishers and songwriters to air their grievances.

They painted a picture of an industry grappling with insidious new challenges despite a reported 17 percent jump in U.S. music publishing revenue to over $7 billion last year.

David Israelite, NMPA CEO, and Danielle Aguirre, EVP and general counsel, detailed how this growth is being stifled by a labyrinth of issues. (source)

These issues ranged from strenuous government regulation of mechanical royalties to the increasingly contentious practice of bundling.

The bundling strategy, particularly from Spotify and Amazon Music, emerged as a significant thorn in the side of songwriters.

Aguirre laid bare the financial toll: “we lost over $230 million” last year from Spotify’s bundles.

There was a staggering “40 percent decrease in music revenue from Amazon” in just the first three months of their bundling initiative. (source)

This isn’t merely a shift in revenue; it’s a direct hit to the pockets of the creators whose work forms the very foundation of these platforms.

The NMPA had previously filed an FTC complaint against Spotify over this very issue, underscoring the severity of their concern.

Beyond bundling, the NMPA cast a critical eye on social media platforms, accusing them of “failing songwriters” with paltry payments.

TikTok, in particular, was singled out.(source)

Despite drawing $18.5 billion in revenue last year and boasting that 85 percent of videos on its platform feature music, the compensation to creators remains shockingly low.

This highlights a stark imbalance between platform profitability and artist remuneration.

Amidst these pressing financial discussions, Israelite delivered a passionate plea for unity.

He emphasized the symbiotic relationship between all facets of the music business and its creators.

“Without a healthy songwriter economy, the entire system suffers,” he asserted, calling on recording artists, managers, and record labels to stand in solidarity with non-performing songwriters.

It was a rallying cry for collective action, a recognition that the industry’s future hinges on the well-being of those who craft the melodies and lyrics that define our cultural landscape.

The evening wasn’t entirely consumed by financial woes; it also served as a reminder of the artistry at stake.

The NMPA honored its own, with Gracie Abrams and Aaron Dessner receiving Billboard Songwriter Awards.

They performed a duet that underscored the magic of collaboration.

Kacey Musgraves was celebrated with the Icon Award, and beloved country songwriter Rhett Akins was recognized as a Non-Performing Songwriter Icon.

His legacy was performed by his son, Thomas Rhett.

Leon Bridges paid tribute to Musgraves, and Musgraves herself closed the night, performing “The Architect” from her latest album.

These moments of artistic recognition, however, served as a poignant counterpoint to the underlying struggle for fair compensation, a struggle that continues to define the music industry’s complex relationship with its own invaluable art.