Music streaming app 'The Pack' launched in WA to support local bands alternative to Spotify, Apple Music

Grace Newton-Wordsworth & her band Joan and the Giants have 8 songs on Spotify that have been streamed more than 70,000 times - A considerable achievement, the monetary reward is negligible.

"That equates to maybe a couple of hundred dollars," she said.

"You're just investing so much into your music and really it's fairly ridiculous how much you get back, to be honest."

The tiny returns many artists receive from music streaming platforms were condemned in a recent United Nations report as "unacceptable, particularly compared to the billions of market capitalization of the streaming services".

The World Intellectual Property Organisation report, published in June, calculated Spotify paid an average of $0.0042 per stream in 2020, or less than half a cent, while Apple Music paid $0.010 per song.

In other words, it would take a million streams for an artist to receive about $4,200 from Spotify and $10,000 from Apple Music.

That's compared to the $8,000 it cost Grace Newton-Wordsworth and her band to record and master one of their recent songs, create a video clip and promote it.

"That's why we do a lot of things. You have to gig, you have to sell merch, you have to do a lot of things to support yourself as an artist, otherwise it's really hard to make any money out of streaming services," the Perth-based singer said

She has had enough and is keen to embrace a new music streaming platform designed to give back more to local musicians.

Turning the streaming business model on its head

Melanie Bainbridge and Harry Deluxe, who have decades of experience in the music industry — most recently in the band Mama Red and the Dark Blues — have watched the decimation of revenue streams for recording artists and decided to do something about it.

"All we're doing is turning the business model of streaming on its head," Ms Bainbridge told business leaders at a startup forum on Tuesday.

"Instead of effectively benefiting the people at the top, it benefits the creator. So it gives them a revenue stream."

They have created a music streaming app called The Pack for unsigned, original local artists.

Listeners and businesses can subscribe to The Pack as patrons, with the money going straight into the pockets of artists.

"There's no labels or middlemen, so we're actually cutting out a very big part of that conversation, and it's meaningful to artists because they'll get a much larger percentage of the streaming royalty," Ms Bainbridge said.

Artists would receive 40 per cent of all revenue generated by The Pack, and the rest would go back into developing the business.

"It belongs to them, the music belongs to them. It's their creativity, it's their heart and soul and they deserve to be paid for it," Ms Deluxe said.

They say it will promote local unsigned artists who are "invisible" on major streaming platforms, without the backing of record labels to support them.

"When we become part of our own cohort in our own communities, we're very visible. We're local. It's much easier for people to find us," Ms Bainbridge said.

They want it to be easier for music lovers to discover new singers or bands in their area, and also for businesses who want to play local music, but have trouble finding it on Spotify or Apple Music.

The idea is for listeners to help curate playlists in the businesses they frequent.

Customer can create own space: cafe owner

Ali Pasay, owner of the East Perth cafe Farmology, plans to become a patron.

"The best part about it is the customer actually creates the space they want," he said.

"There's only so much we can do with the decor, but this way they get to have that vibe that they were after and they can come back to their favourite places and it still be their space more than anything else."

The app will initially be trialled around parts of Perth, with the aim of launching commercially in August next year.

The creators say the model can work nationally, with interest from artists from around the country and even internationally.

But they acknowledge they will never have the membership of a company like Spotify, with its 355 million-plus subscribers.

Can there be money without scale?

Ms Bainbridge said the scale of major streaming services had already been shown not to financially benefit many artists.

"We actually believe they'll be making more money through The Pack, in this hyper-local system than they will actually make on Spotify," she said.

'You will hear local music in your local spaces and places and you will be able to invest in that locally and directly.

"And the other reason is the creator-consumer model, which means every subscription only goes to those artists who the subscriber has streamed."

The UN report considered different models for streaming services, including "fan-powered" royalty payments, similar to the system proposed by The Pack, where a listener's subscription is paid to the artists they listen to rather than going into a pool.

But the report said "the imbalance between billions in market valuation and fractions of a penny in streaming payments would likely remain".

Spotify denied it pays a fixed amount per stream but rather distributed its pool of revenue based on each artist's proportion of streams. It said it paid out $US5 billion to rights holders in 2020.

Nevertheless, the UN report suggested the goal of "equitable remuneration' would best be met by an additional payment from the major streaming platforms to performers and potentially to producers.

The "streaming remuneration" would be outside of any recording agreement, could not be waived by the performer and would be distributed by a royalty collection agency.

Paul Davies, director of Musicians Australia, said there needed to be a rebalancing of revenue so musicians received their fair share.

'There's mass exploitation going on'

While the music industry was worth billions of dollars each year, the union estimated on average musicians made $55,000, including via their jobs outside music.

"If you do the maths on that, really low returns from streaming, really low proportion of income from streaming, and recorded generally, and really low incomes as well," he said.

"But in an industry that is the most profitable in the entertainment sector, there's mass exploitation going on."

He called for market-wide regulation of streaming services at an international level.

But with nothing of the sort imminent, artists like Grace Newton-Wordsworth are looking to the local level.

"I think that's the benefit of The Pack, because there are people behind you, pushing you. It's a team, it's supportive," she said.

Story By | Nicolas Perpitch