Spotify's Own Math Suggests Musicians Are Still Getting Hosed

Nerval's Lobster writes "Spotify wants to change the perception that it's killing artists' ability to make a living off music. In a new posting on its Website, the streaming-music hub suggests that songs' rights-holders earn between $0.006 and $0.0084 per stream, on average, and that a niche indie album on the service could earn an artist roughly $3,300 per month (a global hit album, on the other hand, would rack up $425,000 per month). 'We have succeeded in growing revenues for artists and labels in every country where we operate, and have now paid out over $1 billion USD in royalties to-date ($500 million of which we paid in 2013 alone),' the company wrote. 'We have proudly achieved these payouts despite having relatively few users compared to radio, iTunes or Pandora, and as we continue to grow we expect that we will generate many billions more in royalties.' But does that really counter all those artists (including Grizzly Bear and Damon Krukowski of Galaxie 500) who are on the record as saying that Spotify streaming only earns them a handful of dollars for tens of thousands of streaming plays? Let's say an artist earns $0.0084 per stream; it would still take 400,000 'plays' per month in order to reach that indie-album threshold of approximately $3,300. (At $0.006 per stream, it would take 550,000 streams to reach that baseline.) If Spotify's 'specific payment figures' with regard to albums are correct, that means its subscribers are listening to a lot of music on repeat. And granted, those calculations are rough, but even if they're relatively ballpark, they end up supporting artists' grousing that streaming music doesn't pay them nearly enough. But squeezed between labels and publishers that demand lots of money for licensing rights, and in-house expenses such as salaries and infrastructure, companies such as Spotify may have little choice but to keep the current payment model for the time being."

Comments

Your call

[oldhack]

Pull your tunes out of their service if you don't like it.

Re:Your call

[Entropy98]

It actually doesn't sound that bad, 400,000 web pageviews pays nowhere near $3,000.

Re:Your call

[DexterIsADog]

You're comparing a webview of a frivolous news story or blog post to a recorded song as if they were of equivalent value.

Seriously?

Re:Your call

[Z34107]

You're comparing three minutes of frivolous background noise to the written word as if they were of equivalent value?

Seriously?

Re:Your call

[FatLittleMonkey]

And those whining about Spotify want to treat "plays" as if they were purchases.

Re:Your call

[Riceballsan]

Is a song any more significant than a blog or any other page? Either one, drawing 400,000 takes either luck, or to produce something so good or so bad that it gets shared/tweeted into active circles etc... in both cases the off the charts money makers, are the creations that seem to have taken the least effort.

Re:Your call

[slick7]

You're comparing three minutes of frivolous background noise to the written word as if they were of equivalent value?

Seriously?

Between the Patriot Act and the NDAA and listening to the Barney song, Barney has it!

Re:Your call

[fermion]

My understanding is that much of this is based on compulsory licensing. This means that if you record music, and sell music, then it fair game for broadcast. This has been the model for a long time. And it has worked. One wonders if the Beatles or Elvis would be successful if the radio did not pay to advertise their music. Yet much of the current issue we have from streaming is because many labels and artist think they left a lot of money on the table when the licensing for radio was established. Many labels and artist seem to believe that radio is stealing money from them, although one wonders how a hit can be generated more cheaply than through airplay. Airplay that depends on broadband owned by the public, BTW.

Here is why internet radio is not stealing money from artist. Because it pays more. My understanding is that it pays directly to artists, not through middlemen who manipulate the numbers to pay royalties to artists based on fictional 'credits'. So if an artist is to get $100 from spotify, that is $100 that they would have never gotten through radio, and part of the money is not being diverted to more 'popular' artists or just not paid at all because you do not meet the quarterly threshold.

I also think that the labels might be making a long term mistake by believing they need to maximize upfront profits in streaming instead of looking at the promotional possibilities. As an example I look at Eminem. He got really pissed off at Napster when his music was on the site back in 2000. However, his music was not playing on the major young peoples stations in 2000. He was playing on some stations I listened to, in particular a hybrid english/spanish/hip hop(ther is fair amount of really good spanish hip top) station, but was not at all what the 'in crowd' listened to. Suburban parents were not comfortable with rap. But kids were hearing the music, and I wonder where from. Could it be they were downloading it to the computers? From Napster. I recall when he broke through to mainstream stations. For instance I was in the gym and the DJ(they still existed back then) was pleading with listeners to stop calling requested 'Stan' as they were going to get it on the air as fast as they could. As I said, most stations were not playing it, it was listener demand.

This has all been rehashed millions of times. That the artists are being robbed by streaming. I don't know. In the US minimum wage is less than $8 and hour, so if you spend 40 hours on a song, and get $300 in royalties, I am not sure who you are behind. If I spend 40 hours coding, and someone uses it once, am I entitled to $300? The reality is that recording music, like coding or anything else, is a speculative enterprise. Unless you create some work for hire, where someone else is going to take the risk and gain the majority of the reward, there is no entitlement to pay.

Frankly, if all the big talent that wouldn't work for less than a million dollars a year, I am sure that we would be back to days where most work was done 'for hire' and the artists were paid the absolute minimum possible.

Re:Your call

[Opportunist]

What's the difference between obnoxious and obnoxious?

Re:Your call

[mjwx]

Pull your tunes out of their service if you don't like it.

You do know that most "artists" dont have that control.

The reason writers and singers are getting screwed has nothing to do with Spotify, rather it's the system set up by the music industry to ensure that most cant profit or control their own works.

Spotify is the player, however it is the game that's rigged.

Re:Your call

[sumdumass]

One has a ? At the and and the other has a space.

Something tells me that wasn't whAt you were after.

Anyways, i'm wondering how the payments compare to radio with say a single station snd 400,000 listeners. I know BMI collects and pays differently for college radion verses commercial radio.

Re:Your call

[Anonymous Coward]

My understanding is that much of this is based on compulsory licensing. This means that if you record music, and sell music, then it fair game for broadcast. This has been the model for a long time. And it has worked. One wonders if the Beatles or Elvis would be successful if the radio did not pay to advertise their music. Yet much of the current issue we have from streaming is because many labels and artist think they left a lot of money on the table when the licensing for radio was established. Many labels and artist seem to believe that radio is stealing money from them, although one wonders how a hit can be generated more cheaply than through airplay. Airplay that depends on broadband owned by the public, BTW.

The problem is that Elvis and the Beatles et. al. were successful because their music got played on radio which then contributed to sell their albums. The problem is that nowadays hardly anybody buys albums if they can avoid it, they just use Spotify instead or simply torrent the music and that trend will increase. If we are to regard Spotify as a modern equivalent of the radio stations of the 1960s (and some music industry person actually commented you should regard Spotify as a publicity mechanism, not as a way to make money off of music) then my local Pirate party is in trouble because they have been billing Spotify as an example of a __replacement__ for the old outmoded business model of selling records/CDs. I just witnessed a lengthy debate between a local Pirate party politician and a rather well known musician where the musician presented real world figures over the pitiful amounts of money he made off of his more popular songs on Spotify as opposed to CDs. He was trying to voice the exact opinion being voiced in this article, i.e. that musicians are getting hosed way worse by Spotify and similar services than they ever were by the old Studios (who are major shareholders in Spotify by the way). Meanwhile the Pirate just kept harping on about Spotify and others being the new business model and ignoring his argument and his experience completely. The whole debate reminded me of the total disconnect between Democrats and Republicans in the US. I don't really disagree with the Pirates on this particular issue, there is a pressing need for new business models that are fair to musicians and not just the gatekeepers of distribution services. Some of these Pirates genuinely seem to be trying to solve the quandary of creating a new business model to enable Musicians to earn a living in the internet age. Their problem is that they just keep coming across as arguing that (and I get this a lot when talking to people about political parties): 'we are entitled to pirate because we can and therefore we are entitled to get stuff for free'. This is probably not the impression Pirate parties want to project since it tends make them look like freeloaders and freeloading in my experience tends to piss off large portions of the electorate. Holding Spotify up as an example isn't helping either.

Re:Your call

[happy monday]

Re. promotion, I've bought 10 albums in the last month or so, after listening to them on Spotify and deciding I liked them. Without Spotify allowing me to listen to the albums, I wouldn't have bought them. So Spotify does generate sales. I guess the question is, what proportion of people do buy stuff after hearing it on Spotify?

Re:Your call

[gl4ss]

there's a difference in creating something and hoping to get paid than creating the work for hire(which is most work). if you're pouring your soul into something just for the monetary reward expectation.. what kind of soul is it?

fyi, practically all the composers prior to modern copyright lived off from doing works for hire. you wanted something cool for your 1700's wedding, you paid some dude to compose it.

just because you can create something doesn't mean that others are obligated to feel like paying for it... a lot of music people poured their hearts into is just pure shit. some of it is good. how would you know without hearing it though? pay upfront 20 cent per listen(stream)? ? fuck no.

let's say that some dude can create 20 soul crunching songs in a year, does he deserve to be paid for them just because he creates them? why? what about if he creates 200? is he going to go on a strike if we don't pay up despite us not even wanting to listen to his songs?

I think the people bitching the most are people who are not being listened on spotify at all - and wouldn't be getting any radio plays either in a demand driven radio culture(demand creating radio culture not counting).

Re:Your call

[Vitani]

I know what you're trying to say, but you're comparing a "public" performance (radio, streamed) to a person's copy (book, DVD). If you buy the CD then you do only pay once, or visa-versa if you go to a book reading or watch the film on TV then the author/actors & directors will be paid royalties for another showing (or at least the studio will).

I like the idea of being paid for the hours you put into a project; I get paid £16 an hour to write code, that code is used for more hours than it took me to write, but I only get paid once, I don't get paid for every "use" of the software. Why should it be any different for someone who writes music, movie or a book?

Re:Your call

[GrumpySteen]

The problem is that nowadays hardly anybody buys albums if they can avoid it

Your "hardly anybody" bought 204.8 million albums and 1.34 billion individual songs last year.

the musician presented real world figures over the pitiful amounts of money he made off of his more popular songs on Spotify as opposed to CD

Would you pay $20,000 to rent a car for one trip to the store?

No? Then why would you think that people should pay as much to listen to a song one time as they would to buy it on CD? Yet that seems to be the argument the musician was making.

Re:Your call

[flyneye]

I'll say it again; if you are selling your songs and expecting a profit, you are WRONG!
Doing the same thing over and over and expecting some different outcome is well...you fill in the blank.
Forget the damn industry. If you operate within the bounds of the industry business model you are and will be f**ked.
Operate on a level playing field with the internet and replace the industry model.
1. Give your music away, it's the best way to stay in peoples minds and on their players. Obviously jingle writers can't but that's a direct market with fewer middlemen. Not music anyway, it's jingles.
2. Sell your performances. Book the hell out of yourself, play where it pays.
All this is very basic and I have a much more detailed outline on how to be a musician, make money, spread your fame and help kill the music industry.
We really DON'T need middlemen to choose the music we hear, promote random artists in spite of lack of talent, create a model that excludes non-signed artists, legislate our freedoms away, tie up our courts and attack people for sharing music which has no business being copyrighted to begin with.
Be your own "music industry", spread the work between band, friends and family.
Forget what you know, we make the future.

Re:Your call

[AndrewX]

If they really are "indie" artists, as claimed by most of the people bitching about Spotify not paying them "enough," then yes they do have that control.

Re:Your call

[Kelbear]

Albums haven't been making musicians rich from a long time. Having their songs played on the radio didn't make them rich either.

But having their songs heard got them fans which go out and see their live shows/tours, and that makes them quite a bit of money. Merchandising/Cross promotional deals can make them quite a lot more. (Dr. Dre's Beats brand headphones have totally eclipsed the amount he made in his entire career in the music industry).

The cold hard fact here is that the changes in the music industry are going to happen, no matter what. Spotify and Pandora at least get the artists some money in the meantime. Pirates are not entitled to free music...but they're going to do their thing anyway. Giving those listeners a free stream that at least makes some returns off them gives the artist something rather than nothing.

Even if one day it becomes impossible to make a living off music, I guarantee you, there will still be plenty of music because there are just too many people who want to make music (not all of it good). They'll do it in their spare time while still holding down a full-time job, they feel they need to make that music. Whether that's fair or not, it's still true. The supply of music is overwhelming compared to the demand.

Money Paid != Artist Paid

[elmer at web-axis]

Lots of middle men still exist between a artist and the end listener. All with very sticky fingers handling the money.

Are they really being hosed?

[Runaway1956]

What is there that dictates that an artist should be compensated every time a song is played? The rest of us are paid by the hour, by the job, under contract, or whatever. What is so special about artists, that they should be paid in perpetuity for having done a performance?

The REAL problem is, the artists get such a small piece of the pie, in comparison to the major labels. When a song becomes a global hit, the label makes billions, the artist gets a few million as a reward for enriching the label. And, all the REST of the artists are left believing that entertainment should pay big.

Dude - if you love music, play your music. If you love money more than you love music, maybe you should lay your guitar aside, and learn how to make a living. Musicians are cool and all, but FFS, we don't owe you a living for singing and playing.

Re:Are they really being hosed?

[viperidaenz]

That's why artists tour. They make shit all on album sales. Especially if they didn't write all the songs they sing. They make lots more with ticket sales.

Re:Are they really being hosed?

[DexterIsADog]

Exactly. Just like people who create businesses. They're entitled to reasonable hourly pay, but once the company exists, if they're not still working, they shouldn't get anything more. The business would belong to... well, everyone, I guess, just as you believe songs and other creative content should be ownerless once created.

Right? Ownership is theft!

Re:Are they really being hosed?

[alen]

artists make about average profit margins for a business after expenses

the big pop artists spend a lot of money on advertising. you think its an accident how the photogs always catch lady gaga wearing weird clothes?

by the time you pay for recording, marketing, itunes/amazon and all the other expenses you get some for yourself and then you have to tour. just like every other business today. most products are loss leaders and you need a high margin product to make all the profits. in music its selling the recorded version of your music which is the loss leader. the profits are in the touring

Re:Are they really being hosed?

[hlavac]

Well, what happens when they can't tour?

They lobby with their friends at ministry of culture and get royalties on blank media from people that have never heard of them doing backups of their data! Yay! Never have to work again!

Re:Are they really being hosed?

[Sarten-X]

Copyright is only a recent phenomena.

That's because mass copying is a recent phenomenon. Before easy copying techniques, art was promoted by patronage, as the GP suggests. It's still the effective system in small theaters and galleries around the world, and of course all manner of "arts" online. Get rid of copyright, and the patronage would still exist... it'd just be much more difficult for an artist to rely on an income, because there'd be no middlemen absorbing the financial risk.

Re:Are they really being hosed?

[unitron]

... Copyright is only a recent phenomena.

For a three hundred year definition of recent.

http://en.wikipedia.org/wiki/Statute_of_Anne

Re:Are they really being hosed?

[russbutton]

Dude... To play as well as it takes for some no-talent schmuck to want to listen to something more than once takes a lifetime of very, very hard work. The problem is that people who aren't musicians have no appreciation for the work, heart and soul required for music to be good, let alone great.

Clearly you don't.

Re:Are they really being hosed?

[ApplePy]

This is absurd. Do you not value music? Maybe you don't listen to music. How is an artist supposed to go on about creating music and making a living with no financial support.

Try local music for a change. Really local. Like those guys you never heard of down at the corner pub on Friday night. They're not U2 or Garth Brooks, but hey, for a $5 cover charge and $3 beers, who's complaining?

Those guys aren't in it for the money. They have real day jobs (mostly) and play on weekends because they love music. They know they are never going to play to a stadium, and they don't care.

Do you get what you pay for? Maybe. Can you have a beer with the band after the gig? Yep! Try that with the stars.

Thing is, people who really love to play music don't care about money for it. Sure, it's nice to keep them in beer and guitar strings, and they get that. But I just don't go along with your premise that good music can only come from people who are *lucky* enough to make a living at it.

Re:Are they really being hosed?

[jelizondo]

You mean like every other profession?

You don't get to be a great engineer, architect, doctor or dentist just by going to school. It takes talent, will, hard work, good luck and years of effort.

Now, how many engineers or architecs (doctors or dentists) have a change to become millionaires like an artist or sportsman?

Artists always think they are special and nobody else can even begin to understand how special they are... Well, try engineering for a while. You won't even make it past Calculus I, great special one!.

Re:Are they really being hosed?

[russbutton]

There are a lot of scientists and engineers who are also very fine musicians. The difference is that they are capable of doing something other than music. I'm one such person. I've been playing trumpet all my life. I've just never had any illusions about doing it for a living. I make my money as a Linux sysadmin. Been in the UNIX/Linux biz since '89.

People who make their living in music do so because they really aren't cut out to do anything else. I know. I'm married to one. She owns about $100,000 in instruments and makes about $45,000/year as a professional violinist.

I don't know ANY musicians who think they are due Great Wealth. They just want to make a living and pay the rent like the rest.

What's kind of funny in this discussion is that in the San Francisco area, the general population is complaining about all the techies at companies like Twitter, Zynga, etc who have taken over much of the city. Rents are going through the roof. $2500/month gets you a 2 bedroom 1 bath apartment these days. More in better neighborhoods. Folks here are talking about how the techies are all self-indulgent and act entitled. Pretty much the same way you talk about artists.

Re:Are they really being hosed?

[rioki]

As a matter of fact copyright also covers performances. A large amount of the mechanical royalties are actually collected for cover performances. There is no debate that without any recorded music you would have a similar situation with infringement. And historically that was the case, musicians would play the music and plays that was performed at the kings court. They did definitely not pay anything to the original author of the works.

It is funny that for many Americans history begins around 400 years ago. Blame it on the history course in high school, that basically begins with the Mayflower. Not that I can apply UsCulturalAsumption to the P or GGP with certainty.

In general terms I think copyright is a step forward. Especially Spottify is going beyond and above, they could just shell out the mechanical royalties and be done with it. I doubt much comes around to the artist through mechanical royalties.

Re:Are they really being hosed?

[gsslay]

You are placing all the value of music in its ability of being written by amateurs, performed by amateurs, played and enjoyed in a pub, with beer. That's a really narrow definition of music.

Not all music is like that. Not all music lovers are like that. Some music really does take full time professionals to compose and master. Some music you really don't want to listen to in a pub.

Re:Are they really being hosed?

[gsslay]

What is so special about artists, that they should be paid in perpetuity for having done a performance?

So you are suggesting that musicians, rather than being on a commission based on sales, become employees of some music company, paid by the hour? Like, say, a programmer. It's an idea. But people tend to disparage treating music as a production line. They value the freedom given to an artist. That's what makes them special.

maybe you should lay your guitar aside, and learn how to make a living

Or are you saying that musicians become amateurs, and fit in their hobby around their real living? Again, an idea, as long as everyone is happy to accept that no-one really has the time to produce as much music, or devote a lifetime to mastering it.

Re:Are they really being hosed?

[CastrTroy]

I think the real issue with doing music, or writing, or basketball (any sport) for a living is that there is a very small job market when you think about it. Sure everybody listens to music, but everyone tends to listen to the same 20 musicians. Same with basketball, there's only 30 teams, and 15 players per team, that's about 450 players. There's an extremely small number of people who make money in any of these professions, and the rest of the people make little to no money A "programmer" who can't even program fizz-buzz can easily make a decent salary but the equivalent of a musician or athlete with that level of talent is basically worthless. So sure, there's a lot of programmers (millions) who are making a lot of money, but that's because there's an actual demand for that many programmers. There isn't a demand for a million musicians, a million basketball players, or a million writers. There's a demand for millions of shelf stockers, but there's 10's of millions of people who are capable of doing the job. With programming, the demand for people outnumbers the number of people qualified to do the job. So of course they're going to get paid a lot.

So what you gonna do?

[future assassin]

> (Grizzly Bear and Damon Krukowski of Galaxie 500) who are on the record as saying that Spotify streaming only earns them a handful of dollars for tens of thousands of streaming plays?

So why don't you pull your songs from Spotify? Why not put them where you'll make bags of money? Wait you probably can't as you don't own the rights/distribution rights to your music?

Seriously you'd thin by now, and by that I mean ( its not 1997 and the technology has been there for years) the artists as a collective would have created their own distribution service and raked in the dough.

Re:So what you gonna do?

[UnknownSoldier]

Concur 100%.

The artist don't want to admit that they need to pay for popularity which is no different from the existing system.

Real bands just work hard their entire life to expand their fanbase instead of whining about it.

Hosed compared to what?

[EvilSS]

One of the articles today covering this compared the royalty rates to those paid by radio, which were about 10x what spotify pays. The problem is a) how many indie artists get ANY radio play and b) Radio royalties are per play, spotify royalties are per play per user. Sounds to me like radio stations are the ones giving them the shaft.

Re:Hosed compared to what?

[radarskiy]

a) Radio pays 0 performance royalties, only publishing royalties.

b) The publishing rights clearinghouses distribute royalties based on sampling, despite the fact that radio stations are required to submit their complete logs books. So if you're far enough down the long tail they may never recognize your play count.

Useless without context

[Just Some Guy]

So, how much does an artist make per single over-the-air play on a station with 550,000 listeners? If as many people listened to Spotify as to broadcast radio, half a million plays per month seems absolutely trivial.

Without knowing how Spotify's pay compares to radio, this sounds like little more than an emotional rant from Clear Channel.

Re:Useless without context

[Firethorn]

So, how much does an artist make per single over-the-air play on a station with 550,000 listeners? If as many people listened to Spotify as to broadcast radio, half a million plays per month seems absolutely trivial.

That's the thing, I don't think the rates are based much on the estimated listener, plus as somebody else mentioned, most of the payment goes to the writer of the song, not the performer. Even then the sticky fingers of all the middlemen suck most of the money out.

On the other hand, I have to ask, should a 'nich indie performer' with a single album earn $3.3k/month from spotify alone? Maybe once he or she has ~5 albums out.

Re:Useless without context

[jones_supa]

Without knowing how Spotify's pay compares to radio

Well, lets throw some stats onto the table then. These are the Spotify artist compensation stats for the Finnish singer-songwriter Anssi Kela's hit song Levoton tyttö (original article):

March 2013: 186 317 plays, €458,70
April 2013: 415 353 plays, €878,60
May 2013: 300 524 plays, €618,30
June 2013: 156 119 plays, €381,30

Total:
1 058 313 plays
€2 336,90

In the same article, the artist comments: "2336,90 euros is better than nothing. At least there is something coming through Spotify. If making music was my hobby, that kind of income would be just fine. From the perspective of a professional though, I have to say that if more and more of album sales are replaced with these streaming compensations, it of course causes some wrinkles on my forehead. Currently the situation is that people have to listen one song for roughly two thousand times on Spotify for it to make me equal amount of profit that I get from one CD sold."

Re:Useless without context

[unitron]

... most of the payment goes to the writer of the song, not the performer...

Well, actually it goes to whoever owns the publishing rights, whether that's the composer or someone to whom they transferred those rights.

Re:Useless without context

[SydShamino]

$3800 for what amounts to a few weeks writing a song and coming up with accompanying music, recording it, and getting it post edited doesn't sound so bad, especially since they also made money from other streaming sites, CD sales, live performances of that song, T-shirts and posters sold because people like that song, etc.

What do they expect, to be able to retire off one "hit"? If they want to be a professional musician, they need to put in 40 hour weeks for 40 years and save for retirement, just like every other professional. If they're not able to be creative like that, maybe a creative profession isn't suited for them.

30/70 split spotify/rights holders

[Anonymous Coward]

Summary fails to mention that the payout is 70% of Spotify's monthly revenue divided by number of tracks played in that time period, distributed to the rights holders (BMG/EMI/Warner/maybe even you, puny indy guy) based on play count. If you're under a label, you then apply your contract rate and finally get your cut of the proceeds, which is probably not a lot.

Ben Folds on the issue...

[Anonymous Coward]

Ben Folds, one of my favorite artists, spoke on the issue and said essentially... "I think people are going to look back on this time 50 years from now and say, wow, people could become millionaires just by playing music".

It is really only the last 50 years or so that groups became enormously wealthy based on the music they perform, and now things are returning back to normal.

Goldmine compared to radio

[EmperorOfCanada]

I am not saying that spotify money is enough. If anything it sounds like they are just another group exploiting artists but if I understand they are still a goldmine compared to radio. These artists are saying that they got some crappy little payment for 1 MILLION listens making it seem like they were ripped off and that 1 million is a huge number. But 1 million would be a normal number listening to a NY radio station at primetime and the same artist would be all chuffed that they are in a NY radio station's prime time rotation. But that radio station would be paying peanuts for that.

I suspect that this is why some of the more "successful" (I'm not saying good) artists just tour tour tour and can barely be bothered to politic their way in to the top 10 charts. This way they have much more control over the money. If some promoter tries to set up a concert where the artist is getting shafted then they just won't show up. Worst case contractually they will just get "laryngitis".

I have read an interesting thing about iTunes though. Many dead music libraries from decades ago suddenly became viable with iTunes. Some artists who charted in the 60's and 70's said, "I haven't had a royalty check in 15 years even though I hear my stuff on radio every now and then. But after I put my stuff on iTunes I'm now getting around $30,000 a year."

So one of the things with Spotify being ragged on by the artists might come from the fact that the numbers are presented to the artist making it clear that they aren't getting much money. Whereas their other distribution channels are much cloudier so they don't know how badly they are being screwed.

Well...

[Anonymous Coward]

How do Spotify royalties compare to broadcast royalties? Which at least in the U.S. apparently amount to 18 cents per 1000 listeners (or $0.00018/listener, or if my napkin math is right... 1/33 of what Spotify pays per listener?)

Doesn't seem like new media's getting rich, either. Do any of these services turn a profit?

What's a stream?

[Solandri]

Let's say an artist earns $0.0084 per stream; it would still take 400,000 'plays' per month in order to reach that indie-album threshold of approximately $3,300.

If a "stream" is a single person who listens to the artist in a month, then yeah 400,000 'plays' is a bit onerous.

If a "stream" is a single song listened to once, and the artist has (say) 10 reasonably popular songs, then only 4,000 fans worldwide listening to each of those songs once every 3 days would be enough for the artist to live comfortably. That doesn't sound too bad.

Content ID

[tepples]

What does Youtube pay for 400,000 page views?

I was under the impression that revenue from YouTube's Content ID program was under nondisclosure agreement.

The Alternatives?

[enter to exit]

So what are the alternatives? They can pull their music out of these services and get $0. If Spotify (and the like) give them more, we pay more. I don't think people are willing to pay more than roughly $10.00 a month for these things.

Artists will never say they have enough money, and people will never say they want to support artists - that is until they have to put their money where their mouth is. If spotify doubles their fees how many people will stop subscribing? Spotify already pays 70% to artists/their Representatives.

Content producers don't control their distribution medium anymore and people are used to free (or cheap) content. How much is Art worth? Should a good album make musicians millions? Why? The days of $20.00 albums are over - were they ever justifiable?

Perhaps Artists should lower their expectations - Artists should be grateful to services like Pandora/Spotify the alternatives aren't great.

Supply and demand

[Subm]

Supply and demand aren't exactly on their side either, as there are a lot of people making music out there.

It's tough to fight supply and demand for pricing.

On top of that, a lot of guys in bands get groupies, which probably motivates many of them. Throw in free beer and free admission to the clubs they play in and you're going to have a hard time decreasing the supply of music.

Re:$3,300 per month divided how many times?

[SydShamino]

If five people are only able to produce one "hit" in a given year, and the hit fades so fast that it doesn't earn residual income in future years, then maybe they're in the wrong profession? Maybe fire the three that don't write music or lyrics and bring in three more creative types who can both write and play? That would result in more overall hits and more money for all of them. Or maybe the one creative guy should hire studio musicians for the other four spots, only have to pay them $1000 each once to make the recording, and then pocket the other $36,000 for himself.

Voluntary payments!

[Engeekneer]

I'd really want to see some Spotify - Flattr integration (and in that case, better Flattr adoption), so that you could voluntarily and automatically pay more to the artists you listen to. You can replace Flattr here with any "Automatically-share-a-monthly-fee-between-the-artists-you-listen-to System"

What's does basic Spotify cost? 5€ a month? Out of which maybe 1-2€ go to the artist? If I could direclty add 10€ per month to be spread directly to the artists I listen to as voluntary donations, I'd gladly do that. That would be 15€ a month for me, which I think is reasonable (~price of an album per month). If even 10% of spotify users would do this, it would roughly double the artist income. Even making small donations easy {~2€/month) could have a huge impact.

I'm sure I'm not the only one who would gladly pay a bit more.

Re:are you kidding?

[Anonymous Coward]

some quick math.....
Numbers pulled from the web, SEC etc.

24million active users
Assume advertising covers itself for free users.

6,000,000 active monthly pay users

$15,000,000 @ $5 a month (assuming 3,000,000)
$30,000,000 @ $10 a month (assuming 3,000,000)
$45,000,000 / month in cash

20,000,000 song database

$2.25 per song per month to split up

Figure a bell curve distribution of popularity and its easy to see that the vast majority of songs in their library aren't getting much at all.

48 songs per day (assuming 4 hours of listening)

Please check out the still relevant info graphic from InformationIsBeautiful.
http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

Anecdotes.
My friends have a fairly successful religious music group that is not signed to a label. They make enough to have 4 members happily employed and have houses paid off etc. in their first 4 years.
They say that in the last year, there has been a sharp down turn in digital purchases through iTunes amazon etc.
Most of their money comes through song licensing these days instead of sales and they are having to rethink their whole business model to keep it going.
they have always made a laughable amount of money through streaming. Last year was $28 for spotify.

People pay for a streaming service and then they reach a content saturation point.
They also consume their content differently, nobody i know uses spotify/pandora and then switches to play an mp3 on their device for 1 song and then back, they are locked in, they just press "next" until something comes up.

It is obvious that it is hurting artists bottom line.

Some may say "Who do these bastards think they are to earn so much for so little?" let me tell you, for an indy band it is years of work to finally make it. so you have to aggregate the cost over the time it took to master your songwriting and musicianship at high financial risk. working at a factory for years to pay the bills so you can come home and write. If you spread the money they've made over the past 4 years over the 11 that they have put in to "Get there", it's more of a median wage with a high faillue risk.

That said, there are a lot of undeserving whiny jackoffs out there regardless of profession.
-S

It's Iron Maiden all again

[Arrepiadd]

Two days ago we had a story about how Iron Maiden is making big bucks by touring and not by selling CDs or whatever. Everyone agreed, back then, that this is the way to make money in the music industry.

Are we now surprised that no one gets to be a millionaire just out of Spotify?

Our Spotify Experience

[dizzywiggle]

Spotify has been an interesting experiment for my band, The Wee Lollies (shameless plug - www.theweelollies.com). A single stream garners us a mere $0.0046. Three streams pays out $0.0199. I don't really understand that math, but it is what it is I guess.

All told for 2013, we've earned about 28 cents from Spotify. Granted, we're not a national band, we're not on a label, and we're probably mediocre by most folks' standards. So people aren't rushing to add us to their playlists.

So the takeaway for us is that Spotify isn't really an income tool for new bands. You already have to be quite successful for Spotify to give you enough plays to earn enough to pay for, say, lunch at Taco Bell. It's not even a decent exposure tool as our stream count is way low. We really expected more organic plays. We're kind of surprised that that didn't happen.

At this point we're still on Spotify because, well, why not? As an artist, you want to make it easy for folks to hear your material. But the reality is from a business perspective, it doesn't make sense. After you account for your own time and energy keeping track of everything, it's really a negative return.

Consider the source

[Zontar_Thing_From_Ve]

Let me be blunt here. So an indie band that nobody has heard of (Grizzly Bear) and a different indie band that nobody has heard of and which broke up over 20 years ago (Galaxie 500) are complaining that they aren't getting enough money via Spotify. Gee, I don't know, is there any chance that maybe not enough people give a crap about their music to actually listen to it? Grizzly Bear and Galaxie 500 have their supporters, but the truth is that they just aren't all that big. They were mentioned earlier, so I'll use them as an example. If Iron Maiden wants to complain about what Spotify pays them, I'll listen, but if two no name indie bands, one of whom has been disbanded for over 20 years, want to cry about their payments, well, I'm not so interested. Groups like Grizzly Bear and Galaxie 500 are going to starve if they have only royalties to survive on. It's harsh but true.

Re:Publishing rights

[CastrTroy]

That's because the writer effectively owns the song, while the artists only owns the single performance of the song which was recorded. It's completely legal for the writer of the song to allow Band A to play a song and sell copies (with a percentage going to the writer), and allow Band B to record the same song and also sell copies (again with a percentage going to the writer). Unless the writer signed some kind of exclusivity agreement with the first band, he's perfectly within his rights to let another artist record the song and reap more royalties. The 10th most money-making song of all time is "The Christmas Song" AKA "Chestnuts roasting on an open fire", made so much money because of the sheer number of artists who have included it on their Christmas albums, and the sheer number of radio plays it gets every December.