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Royalties from Writing a Hit Song with Justin Bieber

156 points by microtherion 9y ago

briandoll 9y ago
On this theme, now is a good time to re-read the incredible letter Steve Albini wrote to Nirvana about potentially producing In Utero, which includes his perspective on royalties, etc. https://consequenceofsound.net/2013/09/read-steve-albinis-proposal-to-produce-nirvanas-in-utero/ https://consequenceofsound.net/2013/09/read-steve-albinis-pr...
x0x0 9y ago
Obviously the streaming numbers are minuscule, but if people bought CDs, they can play it unlimited times for a fixed rate. Streaming does substitute with radio and purchased music, but more the latter. Expecting radio rates for something that primarily substitutes for purchased CDs is ludicrous. It would have been more interesting (to me) if the article had compared the youtube/pandora payments with the equivalent CD purchases. Also, this is what google and apple want to do to all of us. Make your complements cheap to enhance your value. Hence the plummeting value of software on their platforms. Apple is busying crying crocodile tears about the difficulty of making a living on the ios platform. They're not gonna care unless and until it damages their platform.
- sbuttgereit 9y ago
  Your first point regarding how streaming cannibalizes CD I think is pretty spot on. Radio play for record companies and artists was a way to entice listeners to buy the record/cassette/CD/etc. and depending on where you sat in the payout chain, you really didn't expect money from radio... often times you paid to have your record played on radio (https://en.wikipedia.org/wiki/Payola https://en.wikipedia.org/wiki/Payola ... and there were creative ways around the laws after they were created). But radio didn't play what you wanted when you wanted (that took buying records), radio played what they wanted when they wanted. Streaming upends that. I don't buy records anymore, I pay a streaming subscription. I get pretty much anything I want whenever I want on demand. I have access to a much larger catalog than I would if I bought everything individually and I'm probably spending on-par with what I did in the old days. (I use to get a lot a free CDs and such because I worked for a record store chain in the 90's, but even so, I have access to a larger catalog today). The fact that I can get the vast majority of what I want means that those few hold out artists that I would like to listen to, but can't because they refuse to play the game (with good reason), simply don't get listened to... I have other choices. I can't comment on the other issues you raise.
peapicker 9y ago
If each radio spin at 347,820 spins hit 10,000 radio listeners average (a Denver hit station has about ~250,000 weekly listeners, a popular rush hour/drive time show with mixed talk/music format has ~80,000 listeners) , then the $53,000 was at a rate of 0.00001524 dollars per listener. If Pandora paid that, his royalty would have been $582.55... So it looks like the industry from a streaming point of view assumes about 20,000 radio listeners per play on the radio. This might even average correctly across the US market.
- 0xfeba 9y ago
  Yeah, radio is one->many, YT and Pandora are (usually) 1-1. Totally different schemes...
- sidlls 9y ago
  Aren't royalties paid per play (i.e. spin)? The rate for the radio is about $0.14 per play (53/347), in that case. Stations have no way of knowing how many listeners actually heard the song. They can estimate with ratings services, but not get exact numbers like say Spotify.
  - itsdrewmiller 9y ago
    Right - the point though is that playing a song on the radio and playing a song as a user of a streaming device have wildly different audience sizes (other than maybe for my 2am college radio show) and should pay very different rates.
  - CobrastanJorji 9y ago
    Right. But the point is that it's sort of weird to directly compare album sales, radio plays, and online streaming view count. Those are fundamentally different both in terms of audience size and income potential.
  - radley 9y ago
    I think you meant $0.0014 per play...
- 9y ago
mfoy_ 9y ago
Well, I thought this was going to be about JB screwing over a writer... so at least it wasn't that. Pretty low numbers though. I wonder what Spotify would have looked like if it were on the list...
- trgv 9y ago
  To some degree that is what happened, though I'm sure he was screwed by a lawyer rather than the artist himself. When they offered this songwriter some % of song royalties, they knew ahead of time that it wasn't going to be a whole lot of money. Solution? Songwriters need a new metric to charge by. One problem, though, is that perhaps songwriting isn't actually worth that much. When you look at a performer like Justin Beiber, how much of his income depends on specific songs that he's putting out? I'm not sure, but I don't necessarily think it's a large amount.
  - conductr 9y ago
    If writers are so opinionated about their works value, they just need to charge a fixed price. The allure of the possibility of writing a song once and having potentially massive perpetual income is why they like these royalty deals (and why said lawyer knew it was a good deal). But that's more of a lottery ticket in todays music industry. However, if you assign a price to your work you will quickly know what it's worth.
- sp821543 9y ago
  The rates paid to songwriters by Spotify & Pandora are similar: about $0.00007 per play. Source: royalty statements
StringyBob 9y ago
I pay GBP10 a month for Spotify. I've never listened to Justin Bieber on Spotify, but lots of other people (who don't pay) do. As a percentage of my cash, how much goes to Justin Bieber vs how much to the bands I've actually listened to who have many less total plays? Or - do neither of them get anything?
- mfoy_ 9y ago
  A fair chunk would go to Bieber, almost nothing would go to the band you listened to exclusively. It's because Spotify pools all the subscription money earmarked for artists into one great pool then divvies it up based on number of plays or play-time or some weird proxy measurement.
  - deleted 9y ago
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- alehul 9y ago
  The other comment was correct that most of the pooled money will go to Bieber, however I feel there's a better way to frame it. Economically speaking, you can imagine if Spotify had 100 users paying 10 GBP each; 99 listened exclusively to Justin Bieber, and 1 to 'Band.' All users listen to music in equal frequency. Though 99% of the pooled money — and if divvied up equally, 99% of 'Band' fan's money — goes to Justin Bieber, 'Band' fan's listening weight results in ~10 GBP of the total pool being pulled towards 'Band.' So, in effect, all of 'Band' fan's money could be classified as going towards 'Band.' Also, as a couple side notes in Spotify's revenue structure: 1. 70% goes to artists, 30% goes to Spotify. 2. Over 70% of Spotify users become paying subscribers iirc, so there's not much of a problem with listening weight being pulled by free users.
  - mikeash 9y ago
    Isn't the whole problem that users don't listen to music with equal frequency? If I use Spotify more than you do, then in effect some of your subscription money goes to the bands I like instead of the bands you like, which is weird and kind of destructive.
excalibur 9y ago
In the absence of significant income from album sales, artists can make a respectable living through touring and merchandising. This path isn't going to work for songwriters. They need to find a different funding model. Perhaps bill artists by the hour? Probably a flat-rate contract for x dollars per song would be more feasible.
- saaaaaam 9y ago
  Famous artists can yes. If you are a semi-known band with four people playing a twenty date tour playing 400 capacity venues with two local support acts you're probably not making so much. That's 8,000 people who care enough to come out and see you. So let's say at least 100,000 people need to like you enough that they would at least consider buying the ticket. $4000 dollars gross in ticket sales per night, 30% to the promoter. $2800 left. If you get 50% of that with 25% to each support act then after commissions to booking agent and manager you're left with maybe $950. You need to pay travel and accommodation costs out of that, and possibly a tour manager. For a four piece band plus tour manager you probably need $30 a head per diem for incidentals of living in the road. Add in food - another $30 per head and you've got $650 left. Hotel rooms aren't cheap. travel isn't cheap. Sure you can sell 25 t-shirts a night at $20 each and make $15 a shirt. And throw in some CDs - maybe 30 at $10 a pop... you maybe net another $600 a night. $1250 a day for your hotels and travel for 5 people - maybe you have $600 left after these costs. Oh and you have to pay your tour manager... Each of the people in the band makes... what - $100 per show? Can artists really make that respectable a living from touring and merch? Sure, scale this up, play bigger venues - 2,000 capacity. But then your costs increase - people want a more impressive show, not just spit and sawdust. You need a set, lighting design, all the rest of it.
- deleted 9y ago
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mfoy_ 9y ago
I can't speak as to the other platforms, but spotify's revenue sharing model really sucks for small artists. For example, if someone signs up for Spotify to listen to exclusively songs by one artist, that artist is not getting that user's monthly fee... they're probably getting a couple pennies tops, if that.
- luhn 9y ago
  I've heard this before. I think it's definitely possible that Spotify's revshare works out in favor of big artists, but I haven't heard an argument for that that didn't involve making broad, unsupported assumptions about users' listening habits.
- peapicker 9y ago
  I really do wish that the part of the money I pay Spotify that goes to royalties ONLY went to the artists I listened to...
- dkrich 9y ago
  But why should they get most of the monthly fee? Spotify offers the ability for that user to listen to that artist plus a million others and thus carries the overhead required to create a platform for that artist to publish in the first place. This seems a bit like saying that I as a taxpayer should only have to pay for the public services that I, at this point in time, take advantage of.
  - mfoy_ 9y ago
    That's why Spotify takes its cut, no? Comparing listening to different artists to funding multiple agencies with tax dollars isn't a valid comparison. It's like saying that when I buy my favourite brand of ice cream at the store, that the other ice cream brands will get a cut simply for gracing the shelves.
    - dkrich 9y ago
      No, it's like saying that when you buy your favorite brand of ice cream at the store the grocery store keeps most of the profit because without the store the ice cream manufacturer wouldn't have a place to sell to the masses. If said artist is in such high demand, then he or she can go make their own streaming platform, charge $10/month, and keep 100%. Obviously that isn't the case, so they must get some utility out of using the Spotify platform.
itsdrewmiller 9y ago
I can't say I've done a lot of research on this dispute, but so far I side with the streaming services since they aren't constantly conflating completely different numbers to try to trick readers. "Spin" is a radio term that isn't used in streaming, for good reason; it's just not the same thing at all.
nfriedly 9y ago
Yea... I think the system is rubbish, but I don't really feel very sorry for someone earning $149k from lyrics they wrote 3 years ago. Edit: helped write - per wgj there were 5 authors on that song - https://news.ycombinator.com/item?id=15419567 https://news.ycombinator.com/item?id=15419567
- bm1362 9y ago
  I believe that was a total? I didn't read it as just for this year.
  - nfriedly 9y ago
    That could be, but it seems like he's being well compensated for his effort either way.
    - JustSomeNobody 9y ago
      Is he? Is he being compensated well when looked at relative to what others have made off of it? It would be interesting to see those numbers.
      - pwinnski 9y ago
        Just consider it flat out: Pick something you did three years ago. Let's say it took you a day, or a week, or a a good chunk of a month, off and on. With no followup work after that, what's a "reasonable" rate of return for that effort? I make a good hourly rate, but at the end of each hour, my earning from that hour is done, and none of my hours have every billed at $149k.
      - kelnos 9y ago
        You can make that argument about any kind of job. Is the CEO who makes $10M a year really worth 100x the marketer who makes $100k a year? It's all in what you value, and who has the most leverage to get more money for whatever value they may provide. You may not think it's fair that the record company made some large multiplier of what the artist made, but that's just how the business works. If you want to change it by cutting out the record company, it's a lot easier to do that than it was 20 years ago, so I'd say the situation for artists in that regard is better, not worse. In the end it absolutely does not matter what anyone thinks is "fair". Absent some form of regulation, people are going to extract as much wealth as they can out of a series of transactions, and some people are going to be more advantaged at doing so than others, whether because of talent or for structural reasons.
look_lookatme 9y ago
> How will I be able to support my gift? In the end what we are seeing is that that golden era of creators making a living (and much much more) was an anomaly. Control of new types of distribution created scarcity and new forms of expression and shifting norms jacked up demand. But now distribution is free, instant and global. Demand has flatlined and production has exploded. The hard question a creator needs to ask themselves now is not "how do I get paid for what my art is worth?", but instead "was my art ever worth much to begin with?"
- dkrich 9y ago
  The question of worth changes as time goes by and technology changes. When your only option for consuming a new song was to either wait for it to play on the radio or go buy the album, the value was much higher because supply was controlled by a few and consequently in short supply, so pricing power was much higher. Now most of the power lies with the consumer who will typically consume whatever artists choose to offer their creations for close to free. There are some artists like Garth Brooks and formerly Taylor Swift, who wield enough power through enormous demand for their songs to limit supply and charge higher amounts, but these are the exceptions. What's ironic about this article to me is that Justin Bieber would likely not have ever become famous in the first place if not for YouTube because that's where he was discovered. The same goes for a large percentage of today's most successful artists. So previously the record labels wielded all the power and only the chosen few who they deemed worthy made large sums of money. Now pretty much anybody can put their stuff out there but the consequence is that they can't control the supply.
- olivermarks 9y ago
  >The hard question a creator needs to ask themselves now is not "how do I get paid for what my art is worth?", but instead "was my art ever worth much to begin with?" I disagree. The hard questions for creators of anything is how to control sales of the product. The digital platforms have failed musicians. The challenge is how to enforce prevention of piracy (ie illegal uploading of material). This will ultimately be legal hardball, and what 'record companies' used to do to protect their label and artist roster. Someone needs ot take on the big digital platforms in a landmark case. Regarding creativity, a tangible asset (like a box and booklet containing the music in some new format for example) would go a long way to making people think they had actually bought 'something' rather than just listening to an fM radio like stream of tunes. Art is rarely worth very much at the time of creation, but can subsequently explode in future popularity. Creators need robust protection mechanisms in place to help them keep creating, and that is legal precidents.
realthings 9y ago
Get with the times! The way people consume music has radically changed. The music gold rush is over. The simple fact is people listen to music on YouTube and Spotify now. Music is also absurdly high in supply because everyone wants to be a musician. Guess what that does to the value? That's right, music is cheap because it isn't worth much. Whenever I see people complain about this, I just feel sorry for them. The world changes, and there are winners and losers because of the change. It's so strange to me how people think the world owes them something. The value of objectively looking at the market is so underrated.
- jbergens 9y ago
  On the other hand there is money in music, and it could and should increase. When you have 1 billion people paying $10 / month you have $12 billion per year to split between the artists, songwriters, record companies and distributors. That might still be lower than before but it is some money.
  - danbruc 9y ago
    $120 billion per year, you missed a factor of 10.
  - vkou 9y ago
    Fortunately for Hacker News, most of that economic windfall goes to middlemen.
    - tormeh 9y ago
      Unfortunately, it goes to the labels. The streaming services aren't rolling in the dough.
      - vkou 9y ago
        It also goes to the engineers working on the services. $200,000-$300,000/year to a senior, even if the service itself is losing money (And when it goes bust, you can always find another job.)
rurban 9y ago
At least we know why Google earns so much. They don't pay any royalties, rather keep everything to themselves. Interesting business concept.
- civilian 9y ago
  I don't think they're keeping everything for themselves. I think they're actually not taking in that much money from Youtube ads / youtube red.
dna_polymerase 9y ago
Wait for GANs and Style Transfer. Your "blessing" will evaporate as soon as the first Machine Learned Song hits Billboard 100.
- bitL 9y ago
  RNNs are pretty close already: https://soundcloud.com/reivalk/basic-rnn-joplin-example-overfitting https://soundcloud.com/reivalk/basic-rnn-joplin-example-over...
  - shmed 9y ago
    The title point out that it's "overfitted". Basically the AI just reproduced almost the exact song that it was fitted with. It's basically a failed experiment where the machine didn't learn how to make music, but insted just repeated the note that it was taught. Not the best example to show case what RNN can do for music.
southphillyman 9y ago
My grandfather had a single hit song over 50 years ago and he still lives comfortably off accumulated royalties and other proceeds in 2017. Those days are long gone. In this current system artists can still become millionaires via concert and show money. It's the writers and producers who are getting shafted since they depend mostly on royalities and points. What I find intriguing are the genres where producers are arguably MORE important than the artist (think trap music). Some producers in that space are circumventing this problem by starting their own labels and signing artists under them. This is essentially what Mike Will Made It has done with Rae Sremmurd. As the music industry evolves, people participating in it have to continually think outside the box and innovate to maintain revenue streams.
- thebiglebrewski 9y ago
  "Santa's Super Sleigh"?
  - southphillyman 9y ago
    No but my user name is a big hint. Artist who grew up in South Philly 50-60 years ago and had a hit song so big he still lives off the royalties today.....
    - sulam 9y ago
      Chubby Checker?!
      - culot 9y ago
        I don't know that Chubby Checker did so well. I saw him at a county fair 25 years ago. He was performing in a tent the size of a large restroom, with only two rows of benches, at about 2pm. There may have been only 3-4 people there altogether.
    - sp821543 9y ago
      Bobby?
_kulte 9y ago
I don't understand, so Bieber made $596,000 (assuming he owned the other 80%) from this song? No way, it would seem like?
- zaroth 9y ago
  There are actually a completely different set of royalties payed to the performer vs. the songwriter.
  - wgj 9y ago
    Rodney Jerkins is only one of five writers on the song: https://en.wikipedia.org/wiki/As_Long_as_You_Love_Me_(Justin_Bieber_song) https://en.wikipedia.org/wiki/As_Long_as_You_Love_Me_(Justin... Bieber also has songwriting credit. If the royalty was divided evenly, Bieber would also get 20%. However, it isn't required to divide evenly, and songwriter royalties can be negotiated myriad different ways.
capkutay 9y ago
Everyone knows that songwriters do not make their money off royalties. They make their money off charging pop stars hourly to write music with them. The same way performing artists don't make money off their albums, they make money by touring and increasing their brand reach as an artist. Music industry is not about creating IP, the same way the tech industry is not about creating IP. Making things and making money are two separate, yet intertwined tasks.
- thomastjeffery 9y ago
  > is not about creating IP I wish more people would come to terms with that. Protecting "IP" should not be the focus, but for many it is, so we have Copyright, DRM, etc.
deleted 9y ago
[deleted]
danjoc 9y ago
I have similar feelings. My gift generates millions for someone else. I take home above median income, but I'm not getting rich. I'm working toward a plan. I wonder what his plan is? It's interesting watching this comment section fill with bickering over what commenters think he deserves.
- darkdreams 9y ago
  Seconded. I think the software industry is an example where the "creators" just get a salary.If you are lucky or an early stage employee, you may get some equity. Software that we write creates billions for corporations but we never get a share. Question: Why do musicians & "creative" people get royalties for what they do and not others? If value creation is the argument, I would argue we are also creating value. I am not asking to be mean, but I am curious.
  - jacquesm 9y ago
    Because they have a union that has negotiated terms on their behalf.
  - sfifs 9y ago
    It's the risk tolerance intersecting with demand-supply. If you join a startup where you are willing to be underpaid in return for equity which could make you rich at a small probability, you're in a entertainment industry model. However if you want a salary and comfortable living, you take a salary and don't get a shot at wealth. You could refuse to work on such terms but your company could persumably hire someone else who won't refuse since the supply of risk averse individuals significantly exceeds those who take risk..
pragmar 9y ago
There are some interesting points in the article's comment thread. >>> Amir Epstein - Money for big hits is in streaming on DSP’s. Spotify pays $7,000 per million streams. That may sound like nothing, but when artists like JB get 100,000,000 streams (that’s a conservative number) that’s $700,000. And then there’s apple itunes, which pays around the same, and google play which pays a little more. And if you are lucky and getting decent numbers on Tidal, it pays $23,000USD per million. Not too shabby >>> Anonymous (response) - That Spotify money you just referenced $7,000 per 1 million streams goes to whoever owns the MASTER. Typically the record company, NOT the songwriters. Do your homework There is a pot of money out there, but you're unlikely to see it unless you're the one writing the record contracts.
joshuaheard 9y ago
The guy wrote a song. It took him, what, a month? For that he earned $150,000? Annualized, that's almost $2 million. I don't see the problem here.
- konschubert 9y ago
  The problem is that writing a hit song is not something he can do every month. It's like finding a nugget of gold. It still has to fund the operation.
  - joshuaheard 9y ago
    His pay probably lasts as long as that song was popular.
- dgudkov 9y ago
  It would be fair to count in years of education and training. Just like with any other profession.
sxates 9y ago
Everyone is very focused on the contrast between the Radio royalties and the Streaming royalties - but we all skipped right past that first item: $149,000 in royalties for writing a song (just the first 3 years). That's a lot of money - more than most people make in 2-3 years - for what probably amounted to a few weeks of work. And we're supposed to feel sorry for him because he couldn't retire on it? Seems to me if he got 1 of these per year he'd be pretty set.
- tjr 9y ago
  I don't think his problem was with the $149,000, but rather, with the trend toward $200 for tens of millions of streaming plays. I.e., it might not be long before a comparable song with comparable popularity earns him $1000 instead of $150,000.
  - sxates 9y ago
    I have to accept that the value of the work I do may change in time, either up or down. Why do people in the music industry not have to accept that as well? Why are they entitled to the same economics decade after decade, while the rest of the world changes?
    - tjr 9y ago
      I personally think that music is a bad career choice. I started out majoring in music in college 20 years ago before switching to computer science, and while I still enjoy playing and writing and recording music, I enjoy whatever money I may get from it like a bonus. I don't think that music industry people are entitled to anything in particular. I do think there's probably something suboptimal going on with streaming payments. If I were watching payment for my work drop 100x, I would probably be both looking for ways to "correct" that if possible, and looking for other work to do...
- vkou 9y ago
  Writing a top hit song is a 'few weeks of work' as much as writing a program is 'hitting the 'submit' button in your source control system.' You don't get paid for all the non-hit songs you wrote.
owly 9y ago
Wow. The amount of hate in the comments is amazing. Eveyone knows best! I know many artists who complain about their low streaming royalties turn around and listen to music on Youtube, Pandora, Etc. HYPOCRITES. Do you really care about directly supporting your favorite artists and encouraging the work of upcoming acts? Then buy their music on BandCamp, go to shows and buy t-shirts/merch.
ilamont 9y ago
This is a story about middlemen. 30 years ago, the supply chain for recorded music went something like this: creator -> music label & radio -> retailers -> audience Now it's something like this: creator -> (label) -> digital platform -> audience Huge power is concentrated in the platforms, which essentially combine curation, distribution, sales, and marketing. They control pricing. They control the playlists. They control the relationship with audiences and understand them far more than record retailers or radio ever did. Labels now provide questionable value -- I would expect that some platforms may start to move into that area, in order to guarantee exclusivity, which is one of the few ways for labels to establish competitive differentiation. This is already happening in other media, such as books (ex: Amazon-owned book labels signing top authors or strong up-and-comers) as well as Amazon video and Netflix funding promising scripts and creative teams. What can artists do? They have a few cards to play. One of them is exclusivity. Another is the ability to build their own connections with audiences (often using free or low-cost communications platforms). And dedicated audiences will do what is asked of them, within reason. Some also perform, which is one of the few areas to make money these days. But platforms are also horning in on that pot. Ticketmaster is ruthless when it comes to manipulating pricing and forcing artists to play by its rules. If I were an up-and-coming artist, I would concentrate not on becoming a "star" but rather making music that both you and your audiences can love, and building indestructible bonds with audiences that they will follow you no matter where you go, whether it's jumping platforms, going on tour, buying new march, or taking part in other activities that respect their love for the music while helping you make a living.
- konschubert 9y ago
  I'm worried about platforms moving into label territory too much because as soon as label start seeing them as competitors, they'll start rolling their own platforms and then we get that fragmentation which we know from video.
- saaaaaam 9y ago
  Yes and no. 30 years ago the supply chain for recorded music went something like this: Songwriter - publisher - recording artist - record label - wholesale distribution - retailer - audience. Someone would write a song. Ideally they would have a publisher, whose job it is to help them maximise the commercial exploitation of that song. That song would be recorded by an artist, funded by a record label. The writer and performing artist may or may not be the same person or people. A record label would sign a recording artist, and often pay them an advance against future recording royalty revenues. That advance - say $100,000 - was exactly that - an upfront payment, and until the artist's royalty payout hit $100,000 they did not make any more money and did not share in any profits the label might be making from the recording. At the point that they have paid back the $100,000 advance the artist has "recouped" and starts to get a share of profits. The label would pay for the recording of the song, and then pay for mixing, master, and production of the finished product. They would then ship this product to a distributor who would get it into shops. The distributor would pay the label a unit price considerably below the retail price. The publisher representing the songwriter would get a small fee per unit shipped based on the wholesale price. The artist would get a small recording royalty per unit against the wholesale distribution rate - maybe 10% or 20% or whatever deal they had struck with the label. Retailers would mark up from what they paid. Sales would be driven by a marketing campaign paid for by the record label - sometimes the publisher would contribute to this marketing spend. Marketing would comprise interviews/features/reviews in a limited universe of music publications and newspapers, some advertising spend, a radio campaign (convincing radio stations to play the music) and perhaps some TV slots. It was fairly manageable, and labels had good connections into major media so were quite easily able to generate good hype for artists. If the record didn't sell, then the label had sunk a lot of money into marketing and promotion, and the advance to the artist. And if the record didn't sell, the artist would not begin to recoup against their advance. Now the model is something like - Songwriter - publisher - recording artist - record label - music platform Someone still needs to write a song. Someone still needs to pay for that song to be recorded. Recording is easier and cheaper than ever though, so labels don't have to invest so much here. However, because it's easier and cheaper to record than ever before, it also means that more people than ever are doing it. Distributing physical product was HARD. And expensive. And now that you can quite literally with a couple of clicks send a recording to Spotify or Apple Music, that barrier to entry has also dropped. So it's easier and cheaper to record, easier and cheaper to distribute - and the audience has far more choice than ever before. Marketing music effectively is harder than ever - there are more channels to reach consumers than ever before, and labels have far less influence over these channels than they did before. So marketing music effectively requires a real understanding of the potential fan base for an artist, and real understanding of how to structure and run a campaign, and reach the curators who power the platforms. The role of a label has changed considerably in the last 30 years. Do labels provide questionable value? Against the old model, yes - you can record and distribute your music without a label. To reach an audience and really cut through against all the thousands of other people recording and distributing music - you need real expertise, and considerable experience of what works and what doesn't work. Running a record label in the old days was very different to running a record label now. But labels make money by being experts. If I were an up-and-coming artist I would make music that I and my audience could love - and I would hire the BEST POSSIBLE PEOPLE to ensure that I'm maximising my chances in every possible area of my career, and cut them in for a percentage of whatever increased success they could bring me. Are those experts working for a "record label"? Maybe, or maybe not. But they will definitely be doing this day in, day out, for similar artists, and they will be learning every day what does and doesn't work. A lot of people in technology seem to think that music is a "build it and they will come" sort of thing. Just because your song is on Apple Music or Spotify does not mean that people are going to discover you. Once they discover you, you have to hope that they will stick with you on your journey, but actually because they way a lot of platforms work the music comes first and the "artist brand" comes second. It's a pretty widely acknowledged fact in the music industry that if you play a bunch of relatively well known songs to a bunch of kids they will probably know the songs, and be able to sing along. They probably WON'T be able to tell you the artist behind those songs though. Great songs deserve great audiences - but all too often great songs suffer because they can't cut through and find those audiences, and even when they do get listened to, converting someone who hears your music into someone who remains a fan and follows along on your journey is something else entirely.
rasz 9y ago
Judging by YouTube alone he wasnt paid 20%, but rather 0.01-0.5% of real royalties.
saaaaaam 9y ago
The revenues from live when you write or co-write for a globally recognised artist who tours will always be more lucrative for songwriters than the revenues from recordings. This is because (generally speaking) the revenues for live for songwriters come as a split of box office - and live performance is generally going to gross a lot more than recording for an artist of that stature. For example, in the UK, PRS takes 3% of box office, and that is then paid out to songwriters based on duration of performance. So for example, if someone sells 1000 tickets at 10 each, there is £300 to be paid to PRS. If there are three acts playing and they each play 30 minutes, songwriters get £3.34 per minute. So if two songwriters co-write a song and agree a 60/40 split and that song is 4 minutes 30 seconds one songwriter would get £9.02 from this show and the other would get £6.01. Bieber played six dates at the O2 in London - capacity 20,000 - and tickets seem to have been around the £45 mark. Let's assume he pretty much sold out - so those six dates grossed £5.4m Assuming he did a 20 song set (so maybe 75 minutes duration for songs, with two support acts each playing 30 minutes - total duration 135 minutes) then the songwriters (for both Bieber and support acts) are getting £1200 per minute of performance across that segment of the tour. So actually, if you are the support act and you are a singer-songwriter playing 30 minutes support to Bieber, you're going to walk away with your live appearance fees plus £36k in songwriter royalties. Streaming revenue splits between labels and songwriters (or sound recording copyright royalties, and publishing mechanical royalties) are based on old record label models, where the label invested a large amount of money to record, manufacture and market product; because of this, they took the lion's share of revenues from record music sales. It's easy to argue that things have changed, but equally, generally speaking a songwriter needs an artist to perform and record the song - and the artist probably needs a label (or someone with some money) to market that song and help it generate the maximum revenues. Songwriters still benefit, because they get MORE revenues than they would have done otherwise. A great song is nothing unless someone records it and performs it. So the problem is not necessarily with Pandora, Spotify, YouTube and all of these other companies - they are following models which by-and-large have been dictated to them by labels - you can't operate a music streaming platform without songs to play, and you can't play songs without obtaining permission to use the recording, and the recording copyright - and thus that permission - is controlled by record labels rather than songwriters. The scale of the market is completely different. Bieber's 2016 world tour apparently grossed $250m in ticket sales - if we stick (for ease) with the UK model for compensating songwriters for live performance, this tour generated $7.5m in revenues for songwriters. Let's say that across the whole tour - including Bieber songs, numerous co-writes, and support acts - there were 250 songwriters involved. Assuming everyone's song was performed for roughly the same duration then each songwriter should have walked away with about $37,500. Not bad. The problem is not streaming - it's people crafting flawed narrative that is based around "my song got streamed a billion times and all I got was this lousy t-shirt" but at the same time ignoring the completely different scales of revenue for live performance vs recording. Bieber has 32 million monthly listeners on Spotify. Assuming that they each listen to an average of 8 tracks a month (for a total of roughly 250m streams) then his label is generating maybe around $1.25m in recording revenues. The songwriters will be getting a fraction of that - and each individual songwriter will get a proportion of that fraction, based on how much their song is listened to. If his most popular song gets 50% of streaming activity, second most popular 25%, third most popular 10%... and his tenth most popular gets 1% then that track is only generating the label $12,500 a month - and maybe $2,500 for the song writer - but it's still getting 2.5m streams a month. If the writer has a 20% share of the song, then they are getting $500 - over a year (all things remaining equal) then maybe they get $6,000 for 30m streams. If that song was played on every date of a Bieber tour as part of a 20 song, 75 minute set, on a tour where headliner is performing 60% of the total duration, then based on the UK model for songwriter performance royalties the writer of that song would be getting $225,000. If someone has a 20% share of that song they are getting $45,000.
tstubben 9y ago
They are talking about songwriting royalties which are easily less then 5% of the royalties paid out by streaming companies. The vast majority of the royalty goes to the recording artist and their label in this case Justin Bieber.
- lukeh 9y ago
  Right, this is an important point which appears to be have been missed elsewhere in this thread (and was probably assumed knowledge in the original link).
majani 9y ago
As with any article about music finances, it misses one crucial detail: elaborating how the money is split between every single entity in the value chain. There's plenty of YouTubers who make orders of magnitude more money on the same amount of views. I feel it's probably largely due to the fact that youtubers usually only split the cash two ways between the star and the editor
juancn 9y ago
You want to know how many spins a day some of my code does?
- ghostbrainalpha 9y ago
  Actually yes please... I would love to see that math worked out with someone who has written a popular program/website.
andybak 9y ago
In case anyone wants to glorify the "good old days": http://www.negativland.com/news/?page_id=17 http://www.negativland.com/news/?page_id=17
greedo 9y ago
I've got a relative in the music/movie business. He was pretty successful at both, most people in the US over 40 would probably recognize him. He and his family live well, but he still tours; usually small venues, travels by tour bus instead of fancy planes. Small crew, just a manager, sound guy and his wife. I figure he might pull $5K a stop, maybe 2x that depending on the size of the venue. Not bad, but not FU money. He still acts in movies, even some that have not held up well over time. I doubt he makes a ton with those roles either. But he still does them. My mom asked why he still does it, at his age; he replied, "I've got kids to put through school." I saw him perform for the first time in 40 years, and realized how much he lied to my mom. On stage, he was (as the kids these days say) lit. He clearly loved the music (he still writes and performs new material), but the light in his eyes showed that what he really loved was performing and sharing his music with the audience. Most musicians can't count on a career lasting 50+ years. The era of singles is gone, and performances are where the next generation will have to make their living.
sebastianwolff 9y ago
Digital Music News is tabloid journalism. It's negligent in its research, and the technophobic clickbait articles' primary intent is to spread mirth and hysteria about the alleged evils of music tech companies. No sources, no citations. But, for fun, let's break it down. 10 minutes of research: Rodney Jerkins Prod represents 20%. BMI says that BMG represents their interests; HFA states that it's EMI. Who knows. For his 20%, they haven't collected mechanicals from Apple/Deezer/Amazon/Goove/Pandora/Tidal/SoundCloud/SiriusXM. I'm not sure about YouTube, Spotify, and the others, but it's likely that the same lack of collection applies. BMI and other performance societies pay writers's shares (50%) directly to members. The same doesn't apply for other royalties. The article also doesn't mention his label/publisher cut, which are likely astronomical. My thought? Royalties are paid out to someone who's negligent in their management, and doesn't pass on/report that income.

156 points by microtherion 9y ago

On this theme, now is a good time to re-read the incredible letter Steve Albini wrote to Nirvana about potentially producing In Utero, which includes his perspective on royalties, etc. https://consequenceofsound.net/2013/09/read-steve-albinis-proposal-to-produce-nirvanas-in-utero/ https://consequenceofsound.net/2013/09/read-steve-albinis-pr...

x0x0 9y ago

Obviously the streaming numbers are minuscule, but if people bought CDs, they can play it unlimited times for a fixed rate. Streaming does substitute with radio and purchased music, but more the latter. Expecting radio rates for something that primarily substitutes for purchased CDs is ludicrous. It would have been more interesting (to me) if the article had compared the youtube/pandora payments with the equivalent CD purchases. Also, this is what google and apple want to do to all of us. Make your complements cheap to enhance your value. Hence the plummeting value of software on their platforms. Apple is busying crying crocodile tears about the difficulty of making a living on the ios platform. They're not gonna care unless and until it damages their platform.

sbuttgereit 9y ago
Your first point regarding how streaming cannibalizes CD I think is pretty spot on. Radio play for record companies and artists was a way to entice listeners to buy the record/cassette/CD/etc. and depending on where you sat in the payout chain, you really didn't expect money from radio... often times you paid to have your record played on radio (https://en.wikipedia.org/wiki/Payola https://en.wikipedia.org/wiki/Payola ... and there were creative ways around the laws after they were created). But radio didn't play what you wanted when you wanted (that took buying records), radio played what they wanted when they wanted. Streaming upends that. I don't buy records anymore, I pay a streaming subscription. I get pretty much anything I want whenever I want on demand. I have access to a much larger catalog than I would if I bought everything individually and I'm probably spending on-par with what I did in the old days. (I use to get a lot a free CDs and such because I worked for a record store chain in the 90's, but even so, I have access to a larger catalog today). The fact that I can get the vast majority of what I want means that those few hold out artists that I would like to listen to, but can't because they refuse to play the game (with good reason), simply don't get listened to... I have other choices. I can't comment on the other issues you raise.

peapicker 9y ago

If each radio spin at 347,820 spins hit 10,000 radio listeners average (a Denver hit station has about ~250,000 weekly listeners, a popular rush hour/drive time show with mixed talk/music format has ~80,000 listeners) , then the $53,000 was at a rate of 0.00001524 dollars per listener. If Pandora paid that, his royalty would have been $582.55... So it looks like the industry from a streaming point of view assumes about 20,000 radio listeners per play on the radio. This might even average correctly across the US market.

0xfeba 9y ago
Yeah, radio is one->many, YT and Pandora are (usually) 1-1. Totally different schemes...
sidlls 9y ago
Aren't royalties paid per play (i.e. spin)? The rate for the radio is about $0.14 per play (53/347), in that case. Stations have no way of knowing how many listeners actually heard the song. They can estimate with ratings services, but not get exact numbers like say Spotify.
- itsdrewmiller 9y ago
  Right - the point though is that playing a song on the radio and playing a song as a user of a streaming device have wildly different audience sizes (other than maybe for my 2am college radio show) and should pay very different rates.
- CobrastanJorji 9y ago
  Right. But the point is that it's sort of weird to directly compare album sales, radio plays, and online streaming view count. Those are fundamentally different both in terms of audience size and income potential.
- radley 9y ago
  I think you meant $0.0014 per play...
9y ago

mfoy_ 9y ago

Well, I thought this was going to be about JB screwing over a writer... so at least it wasn't that. Pretty low numbers though. I wonder what Spotify would have looked like if it were on the list...

trgv 9y ago
To some degree that is what happened, though I'm sure he was screwed by a lawyer rather than the artist himself. When they offered this songwriter some % of song royalties, they knew ahead of time that it wasn't going to be a whole lot of money. Solution? Songwriters need a new metric to charge by. One problem, though, is that perhaps songwriting isn't actually worth that much. When you look at a performer like Justin Beiber, how much of his income depends on specific songs that he's putting out? I'm not sure, but I don't necessarily think it's a large amount.
- conductr 9y ago
  If writers are so opinionated about their works value, they just need to charge a fixed price. The allure of the possibility of writing a song once and having potentially massive perpetual income is why they like these royalty deals (and why said lawyer knew it was a good deal). But that's more of a lottery ticket in todays music industry. However, if you assign a price to your work you will quickly know what it's worth.
sp821543 9y ago
The rates paid to songwriters by Spotify & Pandora are similar: about $0.00007 per play. Source: royalty statements

StringyBob 9y ago

I pay GBP10 a month for Spotify. I've never listened to Justin Bieber on Spotify, but lots of other people (who don't pay) do. As a percentage of my cash, how much goes to Justin Bieber vs how much to the bands I've actually listened to who have many less total plays? Or - do neither of them get anything?

mfoy_ 9y ago
A fair chunk would go to Bieber, almost nothing would go to the band you listened to exclusively. It's because Spotify pools all the subscription money earmarked for artists into one great pool then divvies it up based on number of plays or play-time or some weird proxy measurement.
- deleted 9y ago
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alehul 9y ago
The other comment was correct that most of the pooled money will go to Bieber, however I feel there's a better way to frame it. Economically speaking, you can imagine if Spotify had 100 users paying 10 GBP each; 99 listened exclusively to Justin Bieber, and 1 to 'Band.' All users listen to music in equal frequency. Though 99% of the pooled money — and if divvied up equally, 99% of 'Band' fan's money — goes to Justin Bieber, 'Band' fan's listening weight results in ~10 GBP of the total pool being pulled towards 'Band.' So, in effect, all of 'Band' fan's money could be classified as going towards 'Band.' Also, as a couple side notes in Spotify's revenue structure: 1. 70% goes to artists, 30% goes to Spotify. 2. Over 70% of Spotify users become paying subscribers iirc, so there's not much of a problem with listening weight being pulled by free users.
- mikeash 9y ago
  Isn't the whole problem that users don't listen to music with equal frequency? If I use Spotify more than you do, then in effect some of your subscription money goes to the bands I like instead of the bands you like, which is weird and kind of destructive.

excalibur 9y ago

In the absence of significant income from album sales, artists can make a respectable living through touring and merchandising. This path isn't going to work for songwriters. They need to find a different funding model. Perhaps bill artists by the hour? Probably a flat-rate contract for x dollars per song would be more feasible.

saaaaaam 9y ago
Famous artists can yes. If you are a semi-known band with four people playing a twenty date tour playing 400 capacity venues with two local support acts you're probably not making so much. That's 8,000 people who care enough to come out and see you. So let's say at least 100,000 people need to like you enough that they would at least consider buying the ticket. $4000 dollars gross in ticket sales per night, 30% to the promoter. $2800 left. If you get 50% of that with 25% to each support act then after commissions to booking agent and manager you're left with maybe $950. You need to pay travel and accommodation costs out of that, and possibly a tour manager. For a four piece band plus tour manager you probably need $30 a head per diem for incidentals of living in the road. Add in food - another $30 per head and you've got $650 left. Hotel rooms aren't cheap. travel isn't cheap. Sure you can sell 25 t-shirts a night at $20 each and make $15 a shirt. And throw in some CDs - maybe 30 at $10 a pop... you maybe net another $600 a night. $1250 a day for your hotels and travel for 5 people - maybe you have $600 left after these costs. Oh and you have to pay your tour manager... Each of the people in the band makes... what - $100 per show? Can artists really make that respectable a living from touring and merch? Sure, scale this up, play bigger venues - 2,000 capacity. But then your costs increase - people want a more impressive show, not just spit and sawdust. You need a set, lighting design, all the rest of it.
deleted 9y ago
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mfoy_ 9y ago

I can't speak as to the other platforms, but spotify's revenue sharing model really sucks for small artists. For example, if someone signs up for Spotify to listen to exclusively songs by one artist, that artist is not getting that user's monthly fee... they're probably getting a couple pennies tops, if that.

luhn 9y ago
I've heard this before. I think it's definitely possible that Spotify's revshare works out in favor of big artists, but I haven't heard an argument for that that didn't involve making broad, unsupported assumptions about users' listening habits.
peapicker 9y ago
I really do wish that the part of the money I pay Spotify that goes to royalties ONLY went to the artists I listened to...
dkrich 9y ago
But why should they get most of the monthly fee? Spotify offers the ability for that user to listen to that artist plus a million others and thus carries the overhead required to create a platform for that artist to publish in the first place. This seems a bit like saying that I as a taxpayer should only have to pay for the public services that I, at this point in time, take advantage of.
- mfoy_ 9y ago
  That's why Spotify takes its cut, no? Comparing listening to different artists to funding multiple agencies with tax dollars isn't a valid comparison. It's like saying that when I buy my favourite brand of ice cream at the store, that the other ice cream brands will get a cut simply for gracing the shelves.
  - dkrich 9y ago
    No, it's like saying that when you buy your favorite brand of ice cream at the store the grocery store keeps most of the profit because without the store the ice cream manufacturer wouldn't have a place to sell to the masses. If said artist is in such high demand, then he or she can go make their own streaming platform, charge $10/month, and keep 100%. Obviously that isn't the case, so they must get some utility out of using the Spotify platform.

itsdrewmiller 9y ago

I can't say I've done a lot of research on this dispute, but so far I side with the streaming services since they aren't constantly conflating completely different numbers to try to trick readers. "Spin" is a radio term that isn't used in streaming, for good reason; it's just not the same thing at all.

nfriedly 9y ago

Yea... I think the system is rubbish, but I don't really feel very sorry for someone earning $149k from lyrics they wrote 3 years ago. Edit: helped write - per wgj there were 5 authors on that song - https://news.ycombinator.com/item?id=15419567 https://news.ycombinator.com/item?id=15419567

bm1362 9y ago
I believe that was a total? I didn't read it as just for this year.
- nfriedly 9y ago
  That could be, but it seems like he's being well compensated for his effort either way.
  - JustSomeNobody 9y ago
    Is he? Is he being compensated well when looked at relative to what others have made off of it? It would be interesting to see those numbers.
    - pwinnski 9y ago
      Just consider it flat out: Pick something you did three years ago. Let's say it took you a day, or a week, or a a good chunk of a month, off and on. With no followup work after that, what's a "reasonable" rate of return for that effort? I make a good hourly rate, but at the end of each hour, my earning from that hour is done, and none of my hours have every billed at $149k.
    - kelnos 9y ago
      You can make that argument about any kind of job. Is the CEO who makes $10M a year really worth 100x the marketer who makes $100k a year? It's all in what you value, and who has the most leverage to get more money for whatever value they may provide. You may not think it's fair that the record company made some large multiplier of what the artist made, but that's just how the business works. If you want to change it by cutting out the record company, it's a lot easier to do that than it was 20 years ago, so I'd say the situation for artists in that regard is better, not worse. In the end it absolutely does not matter what anyone thinks is "fair". Absent some form of regulation, people are going to extract as much wealth as they can out of a series of transactions, and some people are going to be more advantaged at doing so than others, whether because of talent or for structural reasons.

look_lookatme 9y ago

> How will I be able to support my gift? In the end what we are seeing is that that golden era of creators making a living (and much much more) was an anomaly. Control of new types of distribution created scarcity and new forms of expression and shifting norms jacked up demand. But now distribution is free, instant and global. Demand has flatlined and production has exploded. The hard question a creator needs to ask themselves now is not "how do I get paid for what my art is worth?", but instead "was my art ever worth much to begin with?"

dkrich 9y ago
The question of worth changes as time goes by and technology changes. When your only option for consuming a new song was to either wait for it to play on the radio or go buy the album, the value was much higher because supply was controlled by a few and consequently in short supply, so pricing power was much higher. Now most of the power lies with the consumer who will typically consume whatever artists choose to offer their creations for close to free. There are some artists like Garth Brooks and formerly Taylor Swift, who wield enough power through enormous demand for their songs to limit supply and charge higher amounts, but these are the exceptions. What's ironic about this article to me is that Justin Bieber would likely not have ever become famous in the first place if not for YouTube because that's where he was discovered. The same goes for a large percentage of today's most successful artists. So previously the record labels wielded all the power and only the chosen few who they deemed worthy made large sums of money. Now pretty much anybody can put their stuff out there but the consequence is that they can't control the supply.
olivermarks 9y ago
>The hard question a creator needs to ask themselves now is not "how do I get paid for what my art is worth?", but instead "was my art ever worth much to begin with?" I disagree. The hard questions for creators of anything is how to control sales of the product. The digital platforms have failed musicians. The challenge is how to enforce prevention of piracy (ie illegal uploading of material). This will ultimately be legal hardball, and what 'record companies' used to do to protect their label and artist roster. Someone needs ot take on the big digital platforms in a landmark case. Regarding creativity, a tangible asset (like a box and booklet containing the music in some new format for example) would go a long way to making people think they had actually bought 'something' rather than just listening to an fM radio like stream of tunes. Art is rarely worth very much at the time of creation, but can subsequently explode in future popularity. Creators need robust protection mechanisms in place to help them keep creating, and that is legal precidents.

realthings 9y ago

Get with the times! The way people consume music has radically changed. The music gold rush is over. The simple fact is people listen to music on YouTube and Spotify now. Music is also absurdly high in supply because everyone wants to be a musician. Guess what that does to the value? That's right, music is cheap because it isn't worth much. Whenever I see people complain about this, I just feel sorry for them. The world changes, and there are winners and losers because of the change. It's so strange to me how people think the world owes them something. The value of objectively looking at the market is so underrated.

jbergens 9y ago
On the other hand there is money in music, and it could and should increase. When you have 1 billion people paying $10 / month you have $12 billion per year to split between the artists, songwriters, record companies and distributors. That might still be lower than before but it is some money.
- danbruc 9y ago
  $120 billion per year, you missed a factor of 10.
- vkou 9y ago
  Fortunately for Hacker News, most of that economic windfall goes to middlemen.
  - tormeh 9y ago
    Unfortunately, it goes to the labels. The streaming services aren't rolling in the dough.
    - vkou 9y ago
      It also goes to the engineers working on the services. $200,000-$300,000/year to a senior, even if the service itself is losing money (And when it goes bust, you can always find another job.)

rurban 9y ago

At least we know why Google earns so much. They don't pay any royalties, rather keep everything to themselves. Interesting business concept.

civilian 9y ago
I don't think they're keeping everything for themselves. I think they're actually not taking in that much money from Youtube ads / youtube red.

dna_polymerase 9y ago

Wait for GANs and Style Transfer. Your "blessing" will evaporate as soon as the first Machine Learned Song hits Billboard 100.

bitL 9y ago
RNNs are pretty close already: https://soundcloud.com/reivalk/basic-rnn-joplin-example-overfitting https://soundcloud.com/reivalk/basic-rnn-joplin-example-over...
- shmed 9y ago
  The title point out that it's "overfitted". Basically the AI just reproduced almost the exact song that it was fitted with. It's basically a failed experiment where the machine didn't learn how to make music, but insted just repeated the note that it was taught. Not the best example to show case what RNN can do for music.

southphillyman 9y ago

My grandfather had a single hit song over 50 years ago and he still lives comfortably off accumulated royalties and other proceeds in 2017. Those days are long gone. In this current system artists can still become millionaires via concert and show money. It's the writers and producers who are getting shafted since they depend mostly on royalities and points. What I find intriguing are the genres where producers are arguably MORE important than the artist (think trap music). Some producers in that space are circumventing this problem by starting their own labels and signing artists under them. This is essentially what Mike Will Made It has done with Rae Sremmurd. As the music industry evolves, people participating in it have to continually think outside the box and innovate to maintain revenue streams.

thebiglebrewski 9y ago
"Santa's Super Sleigh"?
- southphillyman 9y ago
  No but my user name is a big hint. Artist who grew up in South Philly 50-60 years ago and had a hit song so big he still lives off the royalties today.....
  - sulam 9y ago
    Chubby Checker?!
    - culot 9y ago
      I don't know that Chubby Checker did so well. I saw him at a county fair 25 years ago. He was performing in a tent the size of a large restroom, with only two rows of benches, at about 2pm. There may have been only 3-4 people there altogether.
  - sp821543 9y ago
    Bobby?

_kulte 9y ago

I don't understand, so Bieber made $596,000 (assuming he owned the other 80%) from this song? No way, it would seem like?

zaroth 9y ago
There are actually a completely different set of royalties payed to the performer vs. the songwriter.
- wgj 9y ago
  Rodney Jerkins is only one of five writers on the song: https://en.wikipedia.org/wiki/As_Long_as_You_Love_Me_(Justin_Bieber_song) https://en.wikipedia.org/wiki/As_Long_as_You_Love_Me_(Justin... Bieber also has songwriting credit. If the royalty was divided evenly, Bieber would also get 20%. However, it isn't required to divide evenly, and songwriter royalties can be negotiated myriad different ways.

capkutay 9y ago

Everyone knows that songwriters do not make their money off royalties. They make their money off charging pop stars hourly to write music with them. The same way performing artists don't make money off their albums, they make money by touring and increasing their brand reach as an artist. Music industry is not about creating IP, the same way the tech industry is not about creating IP. Making things and making money are two separate, yet intertwined tasks.

thomastjeffery 9y ago
> is not about creating IP I wish more people would come to terms with that. Protecting "IP" should not be the focus, but for many it is, so we have Copyright, DRM, etc.

deleted 9y ago

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danjoc 9y ago

I have similar feelings. My gift generates millions for someone else. I take home above median income, but I'm not getting rich. I'm working toward a plan. I wonder what his plan is? It's interesting watching this comment section fill with bickering over what commenters think he deserves.

darkdreams 9y ago
Seconded. I think the software industry is an example where the "creators" just get a salary.If you are lucky or an early stage employee, you may get some equity. Software that we write creates billions for corporations but we never get a share. Question: Why do musicians & "creative" people get royalties for what they do and not others? If value creation is the argument, I would argue we are also creating value. I am not asking to be mean, but I am curious.
- jacquesm 9y ago
  Because they have a union that has negotiated terms on their behalf.
- sfifs 9y ago
  It's the risk tolerance intersecting with demand-supply. If you join a startup where you are willing to be underpaid in return for equity which could make you rich at a small probability, you're in a entertainment industry model. However if you want a salary and comfortable living, you take a salary and don't get a shot at wealth. You could refuse to work on such terms but your company could persumably hire someone else who won't refuse since the supply of risk averse individuals significantly exceeds those who take risk..

pragmar 9y ago

There are some interesting points in the article's comment thread. >>> Amir Epstein - Money for big hits is in streaming on DSP’s. Spotify pays $7,000 per million streams. That may sound like nothing, but when artists like JB get 100,000,000 streams (that’s a conservative number) that’s $700,000. And then there’s apple itunes, which pays around the same, and google play which pays a little more. And if you are lucky and getting decent numbers on Tidal, it pays $23,000USD per million. Not too shabby >>> Anonymous (response) - That Spotify money you just referenced $7,000 per 1 million streams goes to whoever owns the MASTER. Typically the record company, NOT the songwriters. Do your homework There is a pot of money out there, but you're unlikely to see it unless you're the one writing the record contracts.

joshuaheard 9y ago

The guy wrote a song. It took him, what, a month? For that he earned $150,000? Annualized, that's almost $2 million. I don't see the problem here.

konschubert 9y ago
The problem is that writing a hit song is not something he can do every month. It's like finding a nugget of gold. It still has to fund the operation.
- joshuaheard 9y ago
  His pay probably lasts as long as that song was popular.
dgudkov 9y ago
It would be fair to count in years of education and training. Just like with any other profession.

sxates 9y ago

Everyone is very focused on the contrast between the Radio royalties and the Streaming royalties - but we all skipped right past that first item: $149,000 in royalties for writing a song (just the first 3 years). That's a lot of money - more than most people make in 2-3 years - for what probably amounted to a few weeks of work. And we're supposed to feel sorry for him because he couldn't retire on it? Seems to me if he got 1 of these per year he'd be pretty set.

tjr 9y ago
I don't think his problem was with the $149,000, but rather, with the trend toward $200 for tens of millions of streaming plays. I.e., it might not be long before a comparable song with comparable popularity earns him $1000 instead of $150,000.
- sxates 9y ago
  I have to accept that the value of the work I do may change in time, either up or down. Why do people in the music industry not have to accept that as well? Why are they entitled to the same economics decade after decade, while the rest of the world changes?
  - tjr 9y ago
    I personally think that music is a bad career choice. I started out majoring in music in college 20 years ago before switching to computer science, and while I still enjoy playing and writing and recording music, I enjoy whatever money I may get from it like a bonus. I don't think that music industry people are entitled to anything in particular. I do think there's probably something suboptimal going on with streaming payments. If I were watching payment for my work drop 100x, I would probably be both looking for ways to "correct" that if possible, and looking for other work to do...
vkou 9y ago
Writing a top hit song is a 'few weeks of work' as much as writing a program is 'hitting the 'submit' button in your source control system.' You don't get paid for all the non-hit songs you wrote.

owly 9y ago

Wow. The amount of hate in the comments is amazing. Eveyone knows best! I know many artists who complain about their low streaming royalties turn around and listen to music on Youtube, Pandora, Etc. HYPOCRITES. Do you really care about directly supporting your favorite artists and encouraging the work of upcoming acts? Then buy their music on BandCamp, go to shows and buy t-shirts/merch.

ilamont 9y ago

This is a story about middlemen. 30 years ago, the supply chain for recorded music went something like this: creator -> music label & radio -> retailers -> audience Now it's something like this: creator -> (label) -> digital platform -> audience Huge power is concentrated in the platforms, which essentially combine curation, distribution, sales, and marketing. They control pricing. They control the playlists. They control the relationship with audiences and understand them far more than record retailers or radio ever did. Labels now provide questionable value -- I would expect that some platforms may start to move into that area, in order to guarantee exclusivity, which is one of the few ways for labels to establish competitive differentiation. This is already happening in other media, such as books (ex: Amazon-owned book labels signing top authors or strong up-and-comers) as well as Amazon video and Netflix funding promising scripts and creative teams. What can artists do? They have a few cards to play. One of them is exclusivity. Another is the ability to build their own connections with audiences (often using free or low-cost communications platforms). And dedicated audiences will do what is asked of them, within reason. Some also perform, which is one of the few areas to make money these days. But platforms are also horning in on that pot. Ticketmaster is ruthless when it comes to manipulating pricing and forcing artists to play by its rules. If I were an up-and-coming artist, I would concentrate not on becoming a "star" but rather making music that both you and your audiences can love, and building indestructible bonds with audiences that they will follow you no matter where you go, whether it's jumping platforms, going on tour, buying new march, or taking part in other activities that respect their love for the music while helping you make a living.

konschubert 9y ago
I'm worried about platforms moving into label territory too much because as soon as label start seeing them as competitors, they'll start rolling their own platforms and then we get that fragmentation which we know from video.
saaaaaam 9y ago
Yes and no. 30 years ago the supply chain for recorded music went something like this: Songwriter - publisher - recording artist - record label - wholesale distribution - retailer - audience. Someone would write a song. Ideally they would have a publisher, whose job it is to help them maximise the commercial exploitation of that song. That song would be recorded by an artist, funded by a record label. The writer and performing artist may or may not be the same person or people. A record label would sign a recording artist, and often pay them an advance against future recording royalty revenues. That advance - say $100,000 - was exactly that - an upfront payment, and until the artist's royalty payout hit $100,000 they did not make any more money and did not share in any profits the label might be making from the recording. At the point that they have paid back the $100,000 advance the artist has "recouped" and starts to get a share of profits. The label would pay for the recording of the song, and then pay for mixing, master, and production of the finished product. They would then ship this product to a distributor who would get it into shops. The distributor would pay the label a unit price considerably below the retail price. The publisher representing the songwriter would get a small fee per unit shipped based on the wholesale price. The artist would get a small recording royalty per unit against the wholesale distribution rate - maybe 10% or 20% or whatever deal they had struck with the label. Retailers would mark up from what they paid. Sales would be driven by a marketing campaign paid for by the record label - sometimes the publisher would contribute to this marketing spend. Marketing would comprise interviews/features/reviews in a limited universe of music publications and newspapers, some advertising spend, a radio campaign (convincing radio stations to play the music) and perhaps some TV slots. It was fairly manageable, and labels had good connections into major media so were quite easily able to generate good hype for artists. If the record didn't sell, then the label had sunk a lot of money into marketing and promotion, and the advance to the artist. And if the record didn't sell, the artist would not begin to recoup against their advance. Now the model is something like - Songwriter - publisher - recording artist - record label - music platform Someone still needs to write a song. Someone still needs to pay for that song to be recorded. Recording is easier and cheaper than ever though, so labels don't have to invest so much here. However, because it's easier and cheaper to record than ever before, it also means that more people than ever are doing it. Distributing physical product was HARD. And expensive. And now that you can quite literally with a couple of clicks send a recording to Spotify or Apple Music, that barrier to entry has also dropped. So it's easier and cheaper to record, easier and cheaper to distribute - and the audience has far more choice than ever before. Marketing music effectively is harder than ever - there are more channels to reach consumers than ever before, and labels have far less influence over these channels than they did before. So marketing music effectively requires a real understanding of the potential fan base for an artist, and real understanding of how to structure and run a campaign, and reach the curators who power the platforms. The role of a label has changed considerably in the last 30 years. Do labels provide questionable value? Against the old model, yes - you can record and distribute your music without a label. To reach an audience and really cut through against all the thousands of other people recording and distributing music - you need real expertise, and considerable experience of what works and what doesn't work. Running a record label in the old days was very different to running a record label now. But labels make money by being experts. If I were an up-and-coming artist I would make music that I and my audience could love - and I would hire the BEST POSSIBLE PEOPLE to ensure that I'm maximising my chances in every possible area of my career, and cut them in for a percentage of whatever increased success they could bring me. Are those experts working for a "record label"? Maybe, or maybe not. But they will definitely be doing this day in, day out, for similar artists, and they will be learning every day what does and doesn't work. A lot of people in technology seem to think that music is a "build it and they will come" sort of thing. Just because your song is on Apple Music or Spotify does not mean that people are going to discover you. Once they discover you, you have to hope that they will stick with you on your journey, but actually because they way a lot of platforms work the music comes first and the "artist brand" comes second. It's a pretty widely acknowledged fact in the music industry that if you play a bunch of relatively well known songs to a bunch of kids they will probably know the songs, and be able to sing along. They probably WON'T be able to tell you the artist behind those songs though. Great songs deserve great audiences - but all too often great songs suffer because they can't cut through and find those audiences, and even when they do get listened to, converting someone who hears your music into someone who remains a fan and follows along on your journey is something else entirely.

rasz 9y ago

Judging by YouTube alone he wasnt paid 20%, but rather 0.01-0.5% of real royalties.

saaaaaam 9y ago

The revenues from live when you write or co-write for a globally recognised artist who tours will always be more lucrative for songwriters than the revenues from recordings. This is because (generally speaking) the revenues for live for songwriters come as a split of box office - and live performance is generally going to gross a lot more than recording for an artist of that stature. For example, in the UK, PRS takes 3% of box office, and that is then paid out to songwriters based on duration of performance. So for example, if someone sells 1000 tickets at 10 each, there is £300 to be paid to PRS. If there are three acts playing and they each play 30 minutes, songwriters get £3.34 per minute. So if two songwriters co-write a song and agree a 60/40 split and that song is 4 minutes 30 seconds one songwriter would get £9.02 from this show and the other would get £6.01. Bieber played six dates at the O2 in London - capacity 20,000 - and tickets seem to have been around the £45 mark. Let's assume he pretty much sold out - so those six dates grossed £5.4m Assuming he did a 20 song set (so maybe 75 minutes duration for songs, with two support acts each playing 30 minutes - total duration 135 minutes) then the songwriters (for both Bieber and support acts) are getting £1200 per minute of performance across that segment of the tour. So actually, if you are the support act and you are a singer-songwriter playing 30 minutes support to Bieber, you're going to walk away with your live appearance fees plus £36k in songwriter royalties. Streaming revenue splits between labels and songwriters (or sound recording copyright royalties, and publishing mechanical royalties) are based on old record label models, where the label invested a large amount of money to record, manufacture and market product; because of this, they took the lion's share of revenues from record music sales. It's easy to argue that things have changed, but equally, generally speaking a songwriter needs an artist to perform and record the song - and the artist probably needs a label (or someone with some money) to market that song and help it generate the maximum revenues. Songwriters still benefit, because they get MORE revenues than they would have done otherwise. A great song is nothing unless someone records it and performs it. So the problem is not necessarily with Pandora, Spotify, YouTube and all of these other companies - they are following models which by-and-large have been dictated to them by labels - you can't operate a music streaming platform without songs to play, and you can't play songs without obtaining permission to use the recording, and the recording copyright - and thus that permission - is controlled by record labels rather than songwriters. The scale of the market is completely different. Bieber's 2016 world tour apparently grossed $250m in ticket sales - if we stick (for ease) with the UK model for compensating songwriters for live performance, this tour generated $7.5m in revenues for songwriters. Let's say that across the whole tour - including Bieber songs, numerous co-writes, and support acts - there were 250 songwriters involved. Assuming everyone's song was performed for roughly the same duration then each songwriter should have walked away with about $37,500. Not bad. The problem is not streaming - it's people crafting flawed narrative that is based around "my song got streamed a billion times and all I got was this lousy t-shirt" but at the same time ignoring the completely different scales of revenue for live performance vs recording. Bieber has 32 million monthly listeners on Spotify. Assuming that they each listen to an average of 8 tracks a month (for a total of roughly 250m streams) then his label is generating maybe around $1.25m in recording revenues. The songwriters will be getting a fraction of that - and each individual songwriter will get a proportion of that fraction, based on how much their song is listened to. If his most popular song gets 50% of streaming activity, second most popular 25%, third most popular 10%... and his tenth most popular gets 1% then that track is only generating the label $12,500 a month - and maybe $2,500 for the song writer - but it's still getting 2.5m streams a month. If the writer has a 20% share of the song, then they are getting $500 - over a year (all things remaining equal) then maybe they get $6,000 for 30m streams. If that song was played on every date of a Bieber tour as part of a 20 song, 75 minute set, on a tour where headliner is performing 60% of the total duration, then based on the UK model for songwriter performance royalties the writer of that song would be getting $225,000. If someone has a 20% share of that song they are getting $45,000.

tstubben 9y ago

They are talking about songwriting royalties which are easily less then 5% of the royalties paid out by streaming companies. The vast majority of the royalty goes to the recording artist and their label in this case Justin Bieber.

lukeh 9y ago
Right, this is an important point which appears to be have been missed elsewhere in this thread (and was probably assumed knowledge in the original link).

majani 9y ago

As with any article about music finances, it misses one crucial detail: elaborating how the money is split between every single entity in the value chain. There's plenty of YouTubers who make orders of magnitude more money on the same amount of views. I feel it's probably largely due to the fact that youtubers usually only split the cash two ways between the star and the editor

juancn 9y ago

You want to know how many spins a day some of my code does?

ghostbrainalpha 9y ago
Actually yes please... I would love to see that math worked out with someone who has written a popular program/website.

andybak 9y ago

In case anyone wants to glorify the "good old days": http://www.negativland.com/news/?page_id=17 http://www.negativland.com/news/?page_id=17

greedo 9y ago

I've got a relative in the music/movie business. He was pretty successful at both, most people in the US over 40 would probably recognize him. He and his family live well, but he still tours; usually small venues, travels by tour bus instead of fancy planes. Small crew, just a manager, sound guy and his wife. I figure he might pull $5K a stop, maybe 2x that depending on the size of the venue. Not bad, but not FU money. He still acts in movies, even some that have not held up well over time. I doubt he makes a ton with those roles either. But he still does them. My mom asked why he still does it, at his age; he replied, "I've got kids to put through school." I saw him perform for the first time in 40 years, and realized how much he lied to my mom. On stage, he was (as the kids these days say) lit. He clearly loved the music (he still writes and performs new material), but the light in his eyes showed that what he really loved was performing and sharing his music with the audience. Most musicians can't count on a career lasting 50+ years. The era of singles is gone, and performances are where the next generation will have to make their living.

sebastianwolff 9y ago

Digital Music News is tabloid journalism. It's negligent in its research, and the technophobic clickbait articles' primary intent is to spread mirth and hysteria about the alleged evils of music tech companies. No sources, no citations. But, for fun, let's break it down. 10 minutes of research: Rodney Jerkins Prod represents 20%. BMI says that BMG represents their interests; HFA states that it's EMI. Who knows. For his 20%, they haven't collected mechanicals from Apple/Deezer/Amazon/Goove/Pandora/Tidal/SoundCloud/SiriusXM. I'm not sure about YouTube, Spotify, and the others, but it's likely that the same lack of collection applies. BMI and other performance societies pay writers's shares (50%) directly to members. The same doesn't apply for other royalties. The article also doesn't mention his label/publisher cut, which are likely astronomical. My thought? Royalties are paid out to someone who's negligent in their management, and doesn't pass on/report that income.