David Bowie would have failed in today’s cut-throat music industry, says Nile Rodgers

David Bowie would have been dropped before he ever made a global hit record in today’s hyper-competitive music industry, according to Chic’s Nile Rodgers, who said labels were failing to nurture unique talent and were instead focusing on profit.

The songwriter and musician who produced Let’s Dance alongside Bowie – which took him into the pop mainstream in the 1980s – said no modern label would have given Bowie time to produce a hit record after his run of albums in the 1970s that failed to win commercial success beyond the UK.

“They gave him all that time to try and make a hit, he called me up and we made [Let’s Dance],” said Rodgers. “[The labels] took on this financial responsibility and they would carry the artists they believed in that at some point in time would finally break, those days are truly over.”

Rodgers was speaking in front of a House of Commons select committee investigating the streaming economy and artist remuneration after it produced a landmark series of recommendations in 2021 that called for a “reset” across the industry to make streaming fairer for artists and songwriters.

The panel, which featured the academics Prof David Hesmondhalgh and Dr Hyojung Sun who produced a report on the economics of streaming, and Merck Mercuriadis, who set up the song management company Hipgnosis along with Rodgers, all said there had been slow and limited progress since 2021.

Sun told the committee: “We still have a long way to go before we can say the industry has been reset,” while Hesmondhalgh said that in reality “streaming is a source of income for relatively few people” because of the way profit is distributed.

In 2021, the committee said that while streaming had “brought significant profits to the recorded music industry, the talent behind it – performers, songwriters and composers – are losing out”, two years later the panel argued little had changed.

The committee’s report estimated that streaming services, such as Spotify, take 30-34% of revenues from a stream, with the label recouping 55% and the rest shared out between the recording artist, publisher and songwriter.

Rodgers illustrated the problems modern songwriters and artists face by comparing today’s streaming remuneration with what he experienced in the 1970s. He told the committee that in 1977 – after his first Chic album sold a million copies – he received $100,000, while Snoop Dogg revealed last week he got $45,000 for a billion streams.

In response to Snoop Dogg’s claims, Spotify said it made money for music primarily from two sources – Spotify Premium subscribers and advertisers on Spotify’s Free tier. “Nearly 70% of this money is paid out to music rights holders to what we call the ‘royalty pool’,” a spokesperson said.

Rodgers was dismissive of the labels’ claim that their majority share of streaming revenues is fair because they invest millions into artists and repertoire (A&R), pumping money into acts which could easily flop. “I really hate the fact that they keep using that argument that is completely archaic,” said Rodgers. “I hate to use words like ‘lie’ – but it’s a lie.”

Sun agreed, adding that the evidence did not support record labels’ claims that they were taking substantial risk, while Mercuriadis argued that because of streaming data that tells them which songs fans like, labels did not ever gamble on an artist. “The ones that talk back are the ones that the labels sign,” he said. “And at that point there’s very little risk because the public have already spoken.”

The committee hearing comes a few days after Spotify’s chief financial officer, Paul Vogel, announced his departure, days after cashing in $9.3m (£7.4m) in shares following the streaming service’s decision to cut almost a fifth of its global workforce.

Spotify reported it had 9,400 employees at the end of the third quarter of 2023, and the 17% cuts were the third round of redundancies this year – it had already cut back employee numbers by 6% in January and by a further 2% in June.