Twitch DJs Will Have to Start Paying Record Labels

DJ spinning with money flying behind her and a background of twitch logos
Andrei Porzhezhinskii/Shutterstock Mmaxer/Shutterstock Marcelo Mollaretti/Shutterstock

Across all streaming platforms, apps, and websites, nearly all digital creators share concerns about copyright strikes. Getting hit with copyright violations can mean losing the ability to share and/or earn revenue on valuable work that may have taken weeks or even months to produce. 

The latest pang in this collective ongoing headache concerns DJs playing music on their Twitch channels. According to CEO Dan Clancy, speaking to the Twitch channel TweakMusicTips, the Amazon-owned platform will soon require DJs to share their ad revenue with the music labels that own the records they’re spinning.

Labels are already receiving some compensation from Twitch for DJ streams. Though details are scarce, Clancy suggests the service pays a fee to labels itself to avoid DJ channels getting a constant stream of takedown notices. But Amazon doesn’t want to take these costs on itself forever and hopes to now share the burden with the DJs themselves. The new scheme apparently involves Twitch splitting payouts to labels with individual creators, as opposed to leaving them entirely liable for paying off record labels from their own pockets.

This new arrangement only applies to livestreams. Pre-recorded on-demand videos will have more restrictive rules, essentially blocking DJs from playing music that they don’t already own. Clancy suggests that DJs mute pre-recorded videos themselves, to prevent takedown notices on them from record labels.

Twitch naturally has a vested interest in keeping DJs happy and active on the platform, which helps to explain the caution around Clancy’s announcement and his largely conciliatory tone. During the early days of the coronavirus pandemic, Twitch got a major visibility boost from DJs moving over to streaming as a way to keep their local music and dance scene active. In 2021, Vice non-ironically questioned “Can DJs on Twitch replace clubs?” Amazon would be fools to risk losing such a vast audience of willing ad viewers, even if they did have to compensate music labels out of pocket.

Still, on some level, a change like this was probably inevitable. As Clancy points out during the interview, pre-recorded professionally produced music “doesn’t come for free.” And if Twitch can find a way to share the burden of paying for music with the creators who are actually sharing that music, they’ll certainly do so. 

Based on his casual responses in this interview, it’s impossible to get a full picture of what this means for the future of DJ streams on Twitch, and how onerous the new cost structure will become for individual creators. But beyond just the actual percentages of the revenue split, the move does raise more questions, not just for DJs on Twitch specifically but for the entire industry.

Without further clarification, it’s unclear how Amazon plans to monitor or enforce any new rules surrounding music on Twitch DJ streams and how it’s used. Are DJs going to be entirely responsible for policing their own mixes, or will this be handled automatically by the platform? How long does a song need to be played, or how prominently does a sample need to be used, in order to trigger a payout to that label? If a DJ accidentally fails to include one song or sample in their reporting, do they risk permanently losing monetization on that entire stream? 

Even if the system Twitch devises is ultimately fair and equitable to DJs, the platform, and the music labels, if it’s too complicated, finicky or unreliable, this could create major headaches down the road. The last thing Twitch DJs probably want to deal with is their own version of YouTube’s hated Content ID system, with its false positives and labyrinthine rules and regulations.

Bigger picture, the situation also raises questions about what kind of impact these changes will have on consumers, and the entire ecosystem of dance music online. Does the public really benefit from new rules that put more of the financial burden of DJing on the DJs themselves? And do record labels, as opposed to individual musicians, even need this new revenue stream?

According to the Recording Industry Association of America (RIAA), in the first half of 2023, revenues brought in by recorded music hit an all-time high of $8.4 billion. This was the second year in a row that music industry revenue grew at a rate of 9% or more year-over-year. The primary driver of all this profitability? You guessed it: streaming. Streaming revenue jumped by 10.3% over 2022 in 2023, hitting $7 billion all on its own. [If you adjust for inflation, the business is still bringing in less overall revenue than it was in the pre-internet era, when everyone was still buying CDs. Still, Universal Music Group is hardly going bankrupt.]

But all of this streaming money isn’t really trickling down to the individual artists. Spotify payouts to artists per stream are notoriously low, making it functionally impossible for those who don’t command millions or even billions of plays per month to eke out a living. As Nine Inch Nails frontman and composer Trent Reznor recently told GQ, “the terrible payout of streaming services has mortally wounded a whole tier of artists” and the systems as they currently exist “make being an artist unsustainable.”

As writer Dave Edwards pointed out in an insightful 2021 piece for Future, even the most popular contemporary musical artists at the top of the food chain typically bring the bulk of their earnings outside of the streaming economy. Rihanna’s fortune comes mostly from Fenty Beauty. Dr. Dre owes his wealth primarily to his investment in Beats. Taylor Swift produces her own concert films and then sells them to Disney. And so forth. Taking money out of the hands of individual artists (like DJs) in order to compensate the massively wealthy record labels that already suck up all the cash out of the business might seem inevitable, but that doesn’t make it any more of a positive step.

Edwards proposes an entirely new way of thinking about digital copyrights, establishing rules that will both compensate original rights holders while allowing for “limitless remixing, modding, and reinterpretation” of their work. It’s an interesting proposal that probably would lead to a creative revolution, freeing artists from the constant need to fixate on fair use and monetization concerns.
But in a world where musical artists have been sounding the alarm about paltry streaming revenue for years now, to no avail, in which labels continue getting richer while notable indie artists are forced to quit their bands and take up second careers as therapists… it’s easy to get despondent about our chances of genuinely upgrading these systems and funneling profits to the creators who actually need them the most.

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