How the wealthy profit from musical expression

The Lie They Sell as “Artist‑First”

You’ve been told that the music business is finally “fair” – that streaming platforms are the great democratizers, that indie labels are the rebels, that every track you love directly funds the creator. It’s a comforting narrative, a warm‑fuzzy myth sold by the very people who profit when you tap “play.” The truth? The wealthy elite have turned musical expression into a high‑margin cash machine, while the creators who give it life are left scrambling for pennies.

• Record labels pocket $8 for every $100 you spend on CDs or vinyl.
• That jumps to $9 on iTunes downloads.
• And $13 on every $100 you throw at streaming services.

These numbers come from a Deutsche Bank analysis cited by Pitchfork (2024). The profit margin climbs as the format becomes more “digital,” proving that the industry’s business model is engineered to extract ever‑greater wealth from the consumer’s ear.

Follow the Money: Who’s Actually Getting Rich

If you peel back the glossy veneer of “artist royalties,” you’ll find a sprawling network of private equity firms, hedge funds, and tech conglomerates siphoning off the bulk of the revenue.

• Major labels (Universal, Sony, Warner) are owned by investment banks and private equity.
• Streaming platforms are backed by venture capital that demands exponential growth, not equitable payouts.
• Publishing houses and collecting societies are increasingly consolidated under multinational corporations that dictate royalty rates behind closed doors.

A bullet‑point snapshot of the extraction pipeline:

• Private equity acquisition of indie labels → rebranding, cost‑cutting, artist‑friendly “services” that are actually fee‑laden contracts.
• Algorithmic curation on platforms → pushes high‑volume, low‑pay tracks while marginalizing niche or politically charged music.
• Royalty pooling through collecting societies → opaque distribution, with large shares earmarked for “administrative costs” that often exceed 10 % of total collections.

The result is a system where the wealthy profit from the cultural labor of millions, while the workers – the musicians, songwriters, producers – are forced into precarious gig economies.

The Myth of “Streaming Pays Fairly”

Spotify’s 2025 “Loud & Clear” report boasts that its streaming economy “supports artists” and “fuels explosive growth.” Yet the same report admits that the average artist earns less than $0.005 per stream. At that rate, a musician needs 200,000 streams just to break even on a modest recording budget. For most, that’s an unattainable mountain.

• False claim: “Artists receive a large share of streaming revenue.”
  • Reality: The industry standard is a 52 % cut for the label, 48 % for the artist, before any publishing, management, or distribution fees are deducted.
• False claim: “Streaming democratizes access to audiences.”
  • Reality: Algorithmic playlists prioritize songs from label‑backed catalogs, granting them more exposure and, consequently, more streams – a self‑reinforcing loop that marginalizes independent voices.

Critics argue that the “fairness” narrative is a public relations shield designed to stave off regulation. The fact that Spotify and its peers have lobbied heavily against legislation that would enforce transparent royalty splits (e.g., the U.S. “Music Modernization Act” revisions) underscores the profit motive at play.

How Elite Investors Turn Music into a Commodity

The rise of music investment funds is the latest incarnation of the age‑old practice of treating art as a tradable asset. WIPO’s forthcoming research notes that royalty flows, personality rights, and even future catalog sales are packaged into financial products sold to the ultra‑wealthy. Think of it as a bond market for songs.

Key points:

• Catalog acquisition – Billion‑dollar deals where private equity buys the rights to an artist’s back catalogue and then monetizes it through licensing, synchronization, and algorithmic streaming.
• Royalty securitization – Future earnings are bundled into asset‑backed securities, sold to institutional investors who demand steady, predictable returns, not artistic innovation.
• Personality rights – Names, images, and likenesses become intellectual property assets, licensed for commercials, video games, and NFTs, generating revenue streams that bypass the artist entirely.

These practices extract long‑term value from creative work, turning songs into financial instruments that appreciate or depreciate like stocks. The cultural significance of a piece becomes irrelevant; what matters is the cash flow it can generate for the investor’s portfolio.

The Falsehoods They Keep Feeding You

Misinformation about the music economy is rampant, and it serves a clear purpose: to obscure the profit structures that benefit the elite. Below are three of the most persistent lies, and why they crumble under scrutiny.

• “Independent artists keep 100 % of their royalties.”

  • Debunked: Even independent platforms charge 30 % commissions (e.g., Bandcamp, Apple Music). Moreover, many “indie” artists sign distribution deals that retain a share of royalties for the distributor. No credible source confirms a truly 100 % take.

• “Streaming is a charitable service for artists.”

  • False: Streaming platforms are for‑profit entities that pay out less than 30 % of their revenue to rights holders, according to the Deutsche Bank report. Their “charitable” stance is a veneer to avoid regulation.

• “Music is a public good; profits should be minimal.”

  • Misleading: While cultural products have public value, the creation of music involves substantial labor, studio time, and marketing spend. Dismissing profit entirely ignores the real costs faced by creators, and it conveniently excuses the wealth extraction by corporate owners.

These unverified claims persist because they deflect blame from the institutions that control the money. By convincing the public that the system is already “fair,” the powerful avoid any meaningful redistribution of wealth.

Why This Should Make You Angry

Every time you stream a track, you’re feeding a machine that funnels wealth into the pockets of private equity, hedge funds, and tech CEOs. The cultural narratives that paint this system as “artist‑centric” are nothing more than propaganda.

• Living‑wage musicians who can’t afford health insurance or rent, forced to juggle multiple gigs and day jobs.
• Marginalized creators whose voices are systematically filtered out by algorithmic bias, reinforcing cultural erasure.
• Communities that lose the economic benefits of local music scenes when profits are siphoned off to distant shareholders.

We cannot accept a status quo where artistic expression is treated as a commodity for the rich. Public policy must intervene: enforce transparent royalty reporting, cap private equity ownership of music catalogs, and fund community‑owned platforms that prioritize creators over shareholders. Collective action, not individual hustle, is the antidote to this engineered exploitation.

If you’re still comfortable with the idea that the current model works for everyone, ask yourself: whose silence is being bought, and whose songs are being turned into profit‑driven assets? The answer should make you angry – and, more importantly, compel you to demand change.

Sources

• Music Revenue: Where The Money Comes From & Where It Goes – Recording Academy
• The Rise of Music Investment – WIPO
• Beyond Profits: How the Music Industry’s Cultural and Financial Impact Define Its Success in 2025 – Spotify Newsroom
• Streaming royalties and the fight for fair pay – The Guardian (2023)
• U.S. Music Modernization Act – Library of Congress