The Musician's Dilemma

The Exploitation of Music Artists: A Broken System in 2024

The music industry is a strange beast. It thrives on creativity and talent but often leaves the very creators—the artists—disillusioned and exploited. For decades, the industry has been structured in a way that benefits large record labels, management teams, and distribution companies while leaving many artists to struggle, often trapped in restrictive contracts and making a fraction of what their music generates.

In 2024, this exploitation remains painfully relevant. Even with the rise of digital platforms and streaming services, the imbalance of power between artists and the industry persists. Musicians, the heart and soul of the art form, still make less than the managers and executives who profit from their work. But why does this keep happening, and how can we begin to change it?

How Traditional Music Contracts Exploit Artists

At the root of the problem are traditional recording contracts, many of which are written in ways that exploit the artist’s creative output while benefiting record labels and management. The typical deal structure includes advance payments, royalties, and rights ownership, but the devil is in the details. Here’s a breakdown of how these contracts often work against the artist:

1.Advance Payments:

Record labels offer artists an advance when they sign a deal. This upfront money may seem like a win for the artist, but it’s essentially a loan. The artist is required to repay the advance through their earnings (usually from record sales or streams), and they don’t see any royalties until the advance is fully paid back. Given that streaming revenue is often minimal, this can take years.
       

2. Royalty Splits:

Royalty splits in traditional contracts heavily favor the label. For instance, an artist may receive as little as 12-15% of album sales or streaming revenue. In contrast, the label typically takes the lion’s share—often more than 80%. While this might have made sense in an era where labels had to invest heavily in producing and distributing physical records, digital distribution has dramatically reduced these costs. Yet, the outdated royalty structure persists, leaving artists with scraps from their own work.
 

3. Ownership of Masters:

One of the most controversial aspects of traditional contracts is the ownership of master recordings. The label usually retains control of an artist’s masters, meaning they own the original recordings and the right to make money from them. This restricts the artist’s ability to use or profit from their own music independently.

4.360 Deals:

Modern contracts increasingly include 360 deals, which give the label a cut of nearly every revenue stream an artist generates, from merchandise and touring to sponsorship deals. While labels argue that this approach allows them to invest more in an artist’s career, it often results in the label profiting from areas they traditionally wouldn’t have had a stake in, further diluting the artist’s income.

The Impact of Music Piracy and Streaming

While traditional contracts pose their own challenges, music piracy and the evolution of streaming services have further complicated the landscape. In the early 2000s, the rise of illegal downloads hit artists’ revenue streams hard. Fast-forward to 2024, and although streaming has largely overtaken piracy, the earnings from platforms like Spotify and Apple Music are minimal for most musicians.

To put it into perspective, artists earn between $0.003 and $0.005 per stream on Spotify. That means an artist would need roughly 250,000 streams to make $1,000. For most musicians—especially those without massive fan bases—this makes it nearly impossible to generate substantial income from their recordings alone.

How Artists Can Manipulate the System in Their Favor

Despite these challenges, artists today are finding new ways to work around the system and tilt the scales in their favor. Here are some strategies for aspiring artists to maintain control and earn a fairer share of their profits:

1.Stay Independent (If Possible):

More and more artists are choosing to release music independently through platforms like Bandcamp, SoundCloud, and TuneCore, which allow artists to keep 100% of their earnings from sales or streaming. Though they might miss out on the marketing power of a major label, artists who build loyal fanbases can generate a more sustainable income this way.

Example: Chance the Rapper famously stayed independent and focused on building a direct relationship with his fans, leveraging streaming and touring to generate revenue. He retained full control over his music and image, earning millions without relying on a traditional label.
       

2. Own Your Masters:

Artists should fight to retain ownership of their masters whenever possible. Negotiating for the ownership of your music means you can control how your music is used and can profit directly from licensing opportunities (e.g., for movies, commercials, and TV shows). If a label insists on owning the masters, consider negotiating for a reversion clause, where the masters return to the artist after a certain period.

Example: Taylor Swift has been vocal about the importance of owning masters, even re-recording her early albums to regain control after her original masters were sold without her consent.
       

3. Leverage Social Media for Direct Engagement:

In 2024, artists no longer need labels to reach their audiences. Platforms like TikTok, Instagram, and YouTube have become critical tools for music discovery and fan engagement. By maintaining a direct connection with their audience, artists can bypass middlemen and generate revenue through fan support, crowdfunding, and merchandise sales.

Example: Billie Eilish and her brother Finneas built a loyal fanbase online long before signing with a label, proving that artists can create massive buzz and leverage it for better contract terms later on.
       

4.Utilize Crowdfunding and Fan Support:

Platforms like Patreon and Kickstarter allow artists to get direct financial support from their fans. Artists can offer exclusive content, early access to new music, or personalized experiences in exchange for monthly pledges or one-time donations. This creates a more sustainable income stream while deepening fan relationships.
Example: Amanda Palmer famously raised over $1 million on Kickstarter to fund her album and tour, showing the power of crowdfunding as an alternative to traditional label deals.
       

5.Negotiate Better Royalty Rates:

If signing with a label is the best option, artists should negotiate aggressively for better royalty splits and higher advances. In 2024, artists have more leverage than ever thanks to streaming data and direct fan engagement. Labels know that artists can be successful without them, so they may be more willing to offer favorable terms.

Challenge the Power Dynamic: Should We Keep the Imbalance?

It’s no secret that the management and executives in the music industry still make far more than the artists themselves. The question is—should it stay that way? Are we comfortable with the imbalance of power, where the people creating the art are earning less than those simply managing its distribution?

If we truly value music as a cornerstone of culture, then we need to rethink how we compensate the artists behind it. Shouldn’t the creators—those who pour their talent, heart, and soul into the music—be compensated as much, if not more, than the executives running the labels?

It’s time to challenge this status quo. Artists deserve transparency, fair pay, and control over their creations. If we want to change the system, we need to start by recognizing the value that musicians bring to the world and ensuring that they’re properly compensated for it.

Conclusion: Power to the Artists

The music industry is still an uphill battle for many artists, but with the right tools, strategies, and awareness, musicians can reclaim some of the power that’s been traditionally held by the industry giants. By staying independent, negotiating smarter deals, and building direct relationships with fans, today’s artists have more opportunities than ever to thrive on their own terms.

As fans, it’s also our responsibility to support the artists we love—whether through buying their music, going to their shows, or simply acknowledging that the system doesn’t work without them. If we want to see a fairer, more balanced music industry, we need to demand it. Let’s make sure that the talent of 2024 doesn’t end up like the talent of 1964—exploited, underpaid, and forgotten.

The future of music is in the hands of the artists—let’s give them the power to shape it.