Blues-rock duo The Black Keys, who held their newest LP, "El Camino," from streaming services like Spotify and Rhapsody when it dropped with Nonesuch on December 6, shared their reasoning with VH1 after a week of keeping mum on the decision. They told the outlet that streaming services have yet to provide a comparably lucrative equivalent to traditional album sales.
"It's becoming more popular, but it still isn't at a point where you're able to replace royalties from record sales with royalties from streams," drummer Pat Carney said in the interview. "It kind of felt unfair to people who had purchased our album to allow [other] people to go on a website and stream it whenever they wanted."
Carney went on to say that there is a general misunderstanding about how Spotify royalties work.
"There's a lot of stuff about some of these services that people don't really know," he said, while bandmate Dan Auerbach sat staring at the floor uncomfortably beside him. "It's kind of set up to be more fair for the labels than the artists, I think."
Billboard has calculated previously that, at Spotify's payout rate of 1.146 cents per stream, it would take 64 full streams for an artist to make as much profit as they would in a single 99-cent download with a service like iTunes. However, as digital distributor INgrooves' CEO Robb McDaniels notes, Spotify is proving to be a viable (if not ultimately more lucrative) source of income for major label artists like the Black Keys.
"Spotify recently moved into the number two position, behind iTunes," McDaniels told This Week in Music host Ian Rogers, when asked who gives the highest payouts to labels and artists, via the distributor. "Even before its U.S. launch."
The real question lies, however, not so much in whether album sales and streaming have comparable payout rates, as in whether services like Spotify and Pandora cannibalize traditional music retail. Spotify CEO Daniel Ek has repeatedly stated that album sales have grown in markets where the service is available, and labels have told Billboard that they've yet to see any negative impact from streaming on sales--although the U.S. version of Spotify is still in its infancy. If streaming doesn't hemmhorage album sales numbers, the royalties it pays are simply an added bonus, the thinking goes for some.
In the interview, Carney warned that younger acts should not follow their lead, citing exposure as the ultimate goal as a baby band.
"I think for unknown bands, smaller bands, it's a really good thing to kind of get yourself out there, especially something like Pandora … that introduces you to new stuff," he explained. "But for a band that makes a living selling music, [streaming] is not at a point yet to be feasible for us."
"El Camino" debuted at No. 2 on the Billboard 200 chart this week, with 206,000 copies sold, according to Nielsen Soundscan. The debut makes the band's best sales week and highest-charting album by far. (Last year's "Brothers" LP peaked at No. 3 with a mere 73,000 sold.)
-Additional reporting by Glenn Peoples, Nashville
Watch the interview below: