14 ms·

Artists to Spotify CEO: musicians can no longer afford to make $0.00174927 per stream.

heavenlyblue 6y ago
It’s not far away from musicians paying for others to listen to them.
Alupis 6y ago
Let's be honest. The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. The overwhelming majority of music is unknown, has few fans, and will never "go platinum" nor sell out stadiums - ie, most musicians are not Taylor Swift. For all those artists... access to millions of potential listeners from around the world is an amazing advancement. The number of artists I've discovered, personally, through Pandora's recommendation system is staggering. I'd never know about these artists in a pre-streaming world.
- Kaze404 6y ago
  That's a very bold claim to make without any data.
  - baddox 6y ago
    Does the fact that these musicians choose to put their music on Spotify count as data?
    - Kaze404 6y ago
      Picking between starving and making a penny is not a choice.
  - Alupis 6y ago
    How so? Any person can make a song, and list it on Pandora or Spotify. How many listeners do you think your average garage band has? How many radio spots would they normally get? Albums sold? Most of us have known or lived with someone in a band at some point in our youth. Some of us still play in bands for fun. How much money did they or do you make from selling CD's today? It's practically zero, and it's been practically zero the entire time I've been alive. Anecdata, the people in bands I currently know produce and print CD's at a total loss. They literally give them away for free, hoping to get someone to listen to their latest masterpiece. Pandora and Spotify are a massive boon for these folks.
  - novok 6y ago
    In the world of google, it's a good idea to look it up before making such one sentence replies.
    - Kaze404 6y ago
      It's also a good idea to source your claims.
- deleted 6y ago
  [deleted]
- jakelazaroff 6y ago
  Just speaking for my own band: we have had tens of thousands of streams on Spotify, yet we have made over 4x more revenue from music sales on BandCamp than we have on all streaming services combined.
  - Alupis 6y ago
    That's great! I wish more bands had this level of success. BandCamp is more-or-less an "indie" place to find music. People have to be "into" it to go there and find music. Spotify and Pandora are far lower barriers for every-day people. Just put on some station you've created from your favorite band, and eventually it'll start playing new bands you've never heard and might love. It's amazing.
    - dhosek 6y ago
      What it ends up doing is incentivizing artists to create songs like this: https://play.google.com/store/music/artist/The_Very_Very_Awesome_Song_Band?id=Ahp4g2jup56dfjxtncqbjiuzjdi&hl=en_US https://play.google.com/store/music/artist/The_Very_Very_Awe... I read somewhere that the artist behind this discovered that the streaming songs he made the most from were songs that were apparently requested by random small child requests so he created a whole bunch of songs for just that purpose and makes the bulk of his income through that. Discovery on the streaming services is awful and the renumeration for indie artists is also awful. It's the worst of all possible worlds.
      - Alupis 6y ago
        How is this bad? This artist found a niche that wouldn't exist otherwise, and is making a profit from it. This artist has made a business out of their music. Most music isn't a business, it's a passion and hobby.
        dhosek 6y ago
        I used to be able to do reverse phone lookup by typing a number into google. People have turned that into a business and now it, to put it simply, does not work at all. This is the music equivalent of that. It's also why there are gajillions of crappy cover songs on the streaming services. It's turned into a money extraction thing and is crowding out the, you know, music. Once upon a time, not that long ago even, a talented musician could make a living from their music. It's depressing to read biographies of entertainers who came up in the first half of the twentieth century who needed a job so they became entertainers. We've traded our culture for a mess of pottage.
- drchopchop 6y ago
  No way. How can music simultaneously be "unknown, has few fans" but also benefit from "access to millions of potential listeners"? If they get millions of listens they aren't exactly unknown anymore. One CD sold at a gig for $10 is equal to about 2,000 Spotify plays. A t-shirt sale is double that. A mid-level band can play to 200 people a night and do $1000 daily in merch, easy (and I've personally done it). Sure, if people discover the band via Spotify, that brings them to shows, so there is the discoverability aspect - but the compensation is not remotely comparable. Spotify profits off of the market value of streaming music having dropped to practically nothing (due to practically infinite supply), and their pay rates are terrible as a result.
  - Alupis 6y ago
    You're forgetting all the expense of printing the CD's. It can be thousands of dollars, for a basic bi-fold paper cover. Selling CD's at $10 can, and often is, a loss. "Mid-level" band playing to 200 people who don't know who they are, and might buy a few T-Shirts isn't making much either. Plus they have to quit their jobs and travel, or settle for local shows once a month (or right now, zero shows for practically the entire year). The bar or "house" might pay the band $250 for the show, split 4 or 5 ways... plus deduct any overpriced alcohol and food the band consumed. They often walk away with barely enough money to put into the gas tank. Heck, most of the professional, full-time "mid-level" bands can hardly afford their practice space monthly rent. Very, very few "Mid-level" bands make money. It's a passion project. Very few get lucky enough to make it to the next level and tour with some known bands.
  - JCharante 6y ago
    On the other hand I think it's more common to send a friend a link to a music streaming service for them to listen to a single track than it is to send an amazon link for them to order the CD. Streaming lets you capture revenue from people who may end up not liking your song(s), doesn't it?
  - scooble 6y ago
    "One CD sold at a gig for $10 is equal to about 2,000 Spotify plays" Assuming the album is 10 songs, am I then right in thinking that once I've listened to an album over 200 times (2000 individual song-plays) then the artist would have been better off if I'd used spotify rather than buying the cd? 200 plays over a few decades of album ownership sounds like a pretty low threshold for cds to be better for artists than spotify. Perversely, it looks as though the only artists who will have done better from me buying their album are ones I grew tired of quickly (though my reselling the album could mitigate that).
- platetone 6y ago
  As a small time musician with about 20 albums in as many years up on the streaming services, I am 100% fine with this trade-off. I get basically nothing, but in return I can share my musically instantly with anyone. It's pretty awesome really. It would suck to have to make a living off music or art.
- BosunoB 6y ago
  This might be true if Spotify's monetization was distributed fairly, but instead it's basically redistributive to the biggest players. In short, instead of splitting a person's premium payment equally among all the artists they listened to, it's split among all artists on the platform. E.g. if Lady Gaga is 2% of all Spotify plays in a month, they get 2% of the money, even if you personally didn't listen to Lady Gaga at all.
  - majormajor 6y ago
    Does this really work out differently? It probably gets complicated w/ ads vs premium subs, but if I was 1 subscriber and there were 100 total subs, and I listened exclusively to 1 artist, but 99 other people listened to a different artist... the artist I listened to gets the same amount if they get 100% of my fee or 1% of the total fees, right? I guess users with idle subscriptions is another edge case here.
    - skykooler 6y ago
      I wonder how that is influenced by demographics, i.e. if the people who are on a family plan or a free plan are more likely to listen to certain artists and less likely to listen to others.
  - tomdell 6y ago
    It’s actually even MORE weighted in favor of major label artists like Lady Gaga, thanks to special deals between the big majors and Spotify. My numbers aren’t exact here, but this is the principle of the deal - let’s say Lady Gaga gets 2% of streams and random indie artist gets 2% of streams - because of the deals, Lady Gaga’s music gets paid out 2.5% of the pot and the indie gets 1.5% of it.
    - JAlexoid 6y ago
      If a rando artist suddenly gets as many streams as Gaga, then Spotify might make that deal with the "random indie artist". But let's be real - majority of people go to Spotify BECAUSE there is Gaga, Beyonce, Taylor Swift, Rihanna, Adelle, The Weekend, Shawn Mendes, etc... If you take those names out of the pot - Spotify turns into crappier Soundcloud. These indie artists literally cottail on the big names.
- wwweston 6y ago
  Honesty has to be matched with clarity of insight to be worth much. "Access to millions of potential listeners from around the world" was an advance that had arrived with internet itself and monetized with a number of retailed-recording models like iTunes or Amazon. Or Pandora, if you like, but it's important to note it is a big mistake to think of Spotify and Pandora as the same thing. They're no more in the same category than FM radio is in the same category as a cabinet full of records. Pandora is radio evolved,and it's a discovery and promotional boon, I happily enjoy it and pay for it. Spotify is something else entirely -- it isn't primarily a radio station, it is a cloud replacement for record collections or the practice of owning recordings at all. Even calling it "streaming" almost kneecaps attempts to think about it productively because of how much that term is associated with broadcast. Spotify's value-ad isn't audience reach. It isn't even algorithmic or social recommendation, both of which were done before it began to gnaw away at the industry. Spotify's contribution to both is marginal. The big first-order benefit for the consumer is that it replaces retailed-recording revenue with very fractional per-stream revenue, and so it turns out you pay a lot less and the artist gets paid a lot less. Trying to justify that with "yes, but their potential audience is so much bigger" ignores that artists have to do a LOT of increased volume to make up. 100 plays for every single or album they might have sold is a floor; in a retailed-recording model, someone who nets $.50 a song is already doing better than someone who gets 100 plays on Spotify (also, that's average and there are some rank-takes-all issues with how payments are distributed). And you still have the classic problem artists have always had -- how do you capture fickle and scarce attention? And if you're relying on attention-volume, then that means niche music isn't going to be as much, so you need to pick a form that has the broadest possible appeal. And like the article says, you need to also focus on volume of material rather than polishing less frequent releases for a long time. And of course, marketing & promotion matters more than ever when a broad audience makes the economics work. Do we like these incentives? Or do we just like paying less up front and not having to think about them? As you say, let's be honest and clear-eyed about our answers.
- jariel 6y ago
  "Let's be honest. The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. T" Revenues to artists from digital distribution is a fraction of what it was during the CD days. People used to pay for music, now they do not.
  - Alupis 6y ago
    > People used to pay for music, now they do not. People also used to steal music too. Having a "free" or minimal-cost streaming option has pretty much removed that desire for most people. > Revenues to artists from digital distribution is a fraction of what it was during the CD days. Perhaps for the Taylor Swift's of the world, sure. For everyone else, which makes up 99.99% of musicians, bands and artists... they made zero or negative money before, now they have a chance to get in front of people who would otherwise never know who they are or listen to their music. That's a win for the 99.99%.
    - jariel 6y ago
      So the 'paying' bit happened because of Mp3s, not because of streaming. Artists, were they given the choice, would choose neither, they would chose a kind of DRM. So yes, you make a good point about the long tail. However - the barrier was reasonable. It was possible to make an album and get it out without killing yourself - the actual manufacture of a CD/Cassette is not that much. So that barrier was maybe artificial, but it did definitely make it so that most big music was good. The secondary acts could make demo/mix tapes. By dropping the barrier you definitely get a bunch of artists we would not otherwise, but the signal to noise ratio is immense. There are 100 waste-of-time-noise artists for every serious one, and it's harder for the good one's to get through. We see this on the top pop charts. There are still mega acts with decent production qualities like Taylor Swift - where the artistry is getting low (she is no Michael Jackson), and then the rest of it is unlistenable, reductive garbage. There was always quite a lot of that (i.e. a lot of not-very-good music on the charts) - but the signal to noise ratio is a much bigger problem now. So - the 'decent music' that is not 'really pop' like Taylor Swift never gets through. Decent artists are stuck in a pile of noise and rubble.
- ZoomZoomZoom 6y ago
  >The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. You have to back such claims with data.
kd913 6y ago
Shouldn't they be aiming at basically Google, Amazon and Apple here for undercutting Spotify? Spotify has to price match against those giants who subsidize their respective services with other profitable aspects of the business. Spotify themselves for the most part having been losing money/matching even. What can Spotify do? They raise the cost of premium, they lose marketshare and that would be a death spiral no?
jetti 6y ago
In the US, those rates are set by Copyright Royalties Board [0] and then collected by SoundExchange [1]. The current rates for streaming on a subscription service (such as Spotify) are $0.0024 per performance.[2] The rates aren't determined by Spotify, again in the US, so it isn't Spotify's fault if the royalty per stream aren't enough to live on. [0] https://www.crb.gov/ https://www.crb.gov/ [1] https://www.soundexchange.com/ https://www.soundexchange.com/ [2] https://www.soundexchange.com/service-provider/rates/commercial-webcaster/ https://www.soundexchange.com/service-provider/rates/commerc...

It’s not far away from musicians paying for others to listen to them.

Let's be honest. The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. The overwhelming majority of music is unknown, has few fans, and will never "go platinum" nor sell out stadiums - ie, most musicians are not Taylor Swift. For all those artists... access to millions of potential listeners from around the world is an amazing advancement. The number of artists I've discovered, personally, through Pandora's recommendation system is staggering. I'd never know about these artists in a pre-streaming world.

Kaze404 6y ago
That's a very bold claim to make without any data.
- baddox 6y ago
  Does the fact that these musicians choose to put their music on Spotify count as data?
  - Kaze404 6y ago
    Picking between starving and making a penny is not a choice.
- Alupis 6y ago
  How so? Any person can make a song, and list it on Pandora or Spotify. How many listeners do you think your average garage band has? How many radio spots would they normally get? Albums sold? Most of us have known or lived with someone in a band at some point in our youth. Some of us still play in bands for fun. How much money did they or do you make from selling CD's today? It's practically zero, and it's been practically zero the entire time I've been alive. Anecdata, the people in bands I currently know produce and print CD's at a total loss. They literally give them away for free, hoping to get someone to listen to their latest masterpiece. Pandora and Spotify are a massive boon for these folks.
- novok 6y ago
  In the world of google, it's a good idea to look it up before making such one sentence replies.
  - Kaze404 6y ago
    It's also a good idea to source your claims.
deleted 6y ago
[deleted]
jakelazaroff 6y ago
Just speaking for my own band: we have had tens of thousands of streams on Spotify, yet we have made over 4x more revenue from music sales on BandCamp than we have on all streaming services combined.
- Alupis 6y ago
  That's great! I wish more bands had this level of success. BandCamp is more-or-less an "indie" place to find music. People have to be "into" it to go there and find music. Spotify and Pandora are far lower barriers for every-day people. Just put on some station you've created from your favorite band, and eventually it'll start playing new bands you've never heard and might love. It's amazing.
  - dhosek 6y ago
    What it ends up doing is incentivizing artists to create songs like this: https://play.google.com/store/music/artist/The_Very_Very_Awesome_Song_Band?id=Ahp4g2jup56dfjxtncqbjiuzjdi&hl=en_US https://play.google.com/store/music/artist/The_Very_Very_Awe... I read somewhere that the artist behind this discovered that the streaming songs he made the most from were songs that were apparently requested by random small child requests so he created a whole bunch of songs for just that purpose and makes the bulk of his income through that. Discovery on the streaming services is awful and the renumeration for indie artists is also awful. It's the worst of all possible worlds.
    - Alupis 6y ago
      How is this bad? This artist found a niche that wouldn't exist otherwise, and is making a profit from it. This artist has made a business out of their music. Most music isn't a business, it's a passion and hobby.
      - dhosek 6y ago
        I used to be able to do reverse phone lookup by typing a number into google. People have turned that into a business and now it, to put it simply, does not work at all. This is the music equivalent of that. It's also why there are gajillions of crappy cover songs on the streaming services. It's turned into a money extraction thing and is crowding out the, you know, music. Once upon a time, not that long ago even, a talented musician could make a living from their music. It's depressing to read biographies of entertainers who came up in the first half of the twentieth century who needed a job so they became entertainers. We've traded our culture for a mess of pottage.
drchopchop 6y ago
No way. How can music simultaneously be "unknown, has few fans" but also benefit from "access to millions of potential listeners"? If they get millions of listens they aren't exactly unknown anymore. One CD sold at a gig for $10 is equal to about 2,000 Spotify plays. A t-shirt sale is double that. A mid-level band can play to 200 people a night and do $1000 daily in merch, easy (and I've personally done it). Sure, if people discover the band via Spotify, that brings them to shows, so there is the discoverability aspect - but the compensation is not remotely comparable. Spotify profits off of the market value of streaming music having dropped to practically nothing (due to practically infinite supply), and their pay rates are terrible as a result.
- Alupis 6y ago
  You're forgetting all the expense of printing the CD's. It can be thousands of dollars, for a basic bi-fold paper cover. Selling CD's at $10 can, and often is, a loss. "Mid-level" band playing to 200 people who don't know who they are, and might buy a few T-Shirts isn't making much either. Plus they have to quit their jobs and travel, or settle for local shows once a month (or right now, zero shows for practically the entire year). The bar or "house" might pay the band $250 for the show, split 4 or 5 ways... plus deduct any overpriced alcohol and food the band consumed. They often walk away with barely enough money to put into the gas tank. Heck, most of the professional, full-time "mid-level" bands can hardly afford their practice space monthly rent. Very, very few "Mid-level" bands make money. It's a passion project. Very few get lucky enough to make it to the next level and tour with some known bands.
- JCharante 6y ago
  On the other hand I think it's more common to send a friend a link to a music streaming service for them to listen to a single track than it is to send an amazon link for them to order the CD. Streaming lets you capture revenue from people who may end up not liking your song(s), doesn't it?
- scooble 6y ago
  "One CD sold at a gig for $10 is equal to about 2,000 Spotify plays" Assuming the album is 10 songs, am I then right in thinking that once I've listened to an album over 200 times (2000 individual song-plays) then the artist would have been better off if I'd used spotify rather than buying the cd? 200 plays over a few decades of album ownership sounds like a pretty low threshold for cds to be better for artists than spotify. Perversely, it looks as though the only artists who will have done better from me buying their album are ones I grew tired of quickly (though my reselling the album could mitigate that).
platetone 6y ago
As a small time musician with about 20 albums in as many years up on the streaming services, I am 100% fine with this trade-off. I get basically nothing, but in return I can share my musically instantly with anyone. It's pretty awesome really. It would suck to have to make a living off music or art.
BosunoB 6y ago
This might be true if Spotify's monetization was distributed fairly, but instead it's basically redistributive to the biggest players. In short, instead of splitting a person's premium payment equally among all the artists they listened to, it's split among all artists on the platform. E.g. if Lady Gaga is 2% of all Spotify plays in a month, they get 2% of the money, even if you personally didn't listen to Lady Gaga at all.
- majormajor 6y ago
  Does this really work out differently? It probably gets complicated w/ ads vs premium subs, but if I was 1 subscriber and there were 100 total subs, and I listened exclusively to 1 artist, but 99 other people listened to a different artist... the artist I listened to gets the same amount if they get 100% of my fee or 1% of the total fees, right? I guess users with idle subscriptions is another edge case here.
  - skykooler 6y ago
    I wonder how that is influenced by demographics, i.e. if the people who are on a family plan or a free plan are more likely to listen to certain artists and less likely to listen to others.
- tomdell 6y ago
  It’s actually even MORE weighted in favor of major label artists like Lady Gaga, thanks to special deals between the big majors and Spotify. My numbers aren’t exact here, but this is the principle of the deal - let’s say Lady Gaga gets 2% of streams and random indie artist gets 2% of streams - because of the deals, Lady Gaga’s music gets paid out 2.5% of the pot and the indie gets 1.5% of it.
  - JAlexoid 6y ago
    If a rando artist suddenly gets as many streams as Gaga, then Spotify might make that deal with the "random indie artist". But let's be real - majority of people go to Spotify BECAUSE there is Gaga, Beyonce, Taylor Swift, Rihanna, Adelle, The Weekend, Shawn Mendes, etc... If you take those names out of the pot - Spotify turns into crappier Soundcloud. These indie artists literally cottail on the big names.
wwweston 6y ago
Honesty has to be matched with clarity of insight to be worth much. "Access to millions of potential listeners from around the world" was an advance that had arrived with internet itself and monetized with a number of retailed-recording models like iTunes or Amazon. Or Pandora, if you like, but it's important to note it is a big mistake to think of Spotify and Pandora as the same thing. They're no more in the same category than FM radio is in the same category as a cabinet full of records. Pandora is radio evolved,and it's a discovery and promotional boon, I happily enjoy it and pay for it. Spotify is something else entirely -- it isn't primarily a radio station, it is a cloud replacement for record collections or the practice of owning recordings at all. Even calling it "streaming" almost kneecaps attempts to think about it productively because of how much that term is associated with broadcast. Spotify's value-ad isn't audience reach. It isn't even algorithmic or social recommendation, both of which were done before it began to gnaw away at the industry. Spotify's contribution to both is marginal. The big first-order benefit for the consumer is that it replaces retailed-recording revenue with very fractional per-stream revenue, and so it turns out you pay a lot less and the artist gets paid a lot less. Trying to justify that with "yes, but their potential audience is so much bigger" ignores that artists have to do a LOT of increased volume to make up. 100 plays for every single or album they might have sold is a floor; in a retailed-recording model, someone who nets $.50 a song is already doing better than someone who gets 100 plays on Spotify (also, that's average and there are some rank-takes-all issues with how payments are distributed). And you still have the classic problem artists have always had -- how do you capture fickle and scarce attention? And if you're relying on attention-volume, then that means niche music isn't going to be as much, so you need to pick a form that has the broadest possible appeal. And like the article says, you need to also focus on volume of material rather than polishing less frequent releases for a long time. And of course, marketing & promotion matters more than ever when a broad audience makes the economics work. Do we like these incentives? Or do we just like paying less up front and not having to think about them? As you say, let's be honest and clear-eyed about our answers.
jariel 6y ago
"Let's be honest. The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. T" Revenues to artists from digital distribution is a fraction of what it was during the CD days. People used to pay for music, now they do not.
- Alupis 6y ago
  > People used to pay for music, now they do not. People also used to steal music too. Having a "free" or minimal-cost streaming option has pretty much removed that desire for most people. > Revenues to artists from digital distribution is a fraction of what it was during the CD days. Perhaps for the Taylor Swift's of the world, sure. For everyone else, which makes up 99.99% of musicians, bands and artists... they made zero or negative money before, now they have a chance to get in front of people who would otherwise never know who they are or listen to their music. That's a win for the 99.99%.
  - jariel 6y ago
    So the 'paying' bit happened because of Mp3s, not because of streaming. Artists, were they given the choice, would choose neither, they would chose a kind of DRM. So yes, you make a good point about the long tail. However - the barrier was reasonable. It was possible to make an album and get it out without killing yourself - the actual manufacture of a CD/Cassette is not that much. So that barrier was maybe artificial, but it did definitely make it so that most big music was good. The secondary acts could make demo/mix tapes. By dropping the barrier you definitely get a bunch of artists we would not otherwise, but the signal to noise ratio is immense. There are 100 waste-of-time-noise artists for every serious one, and it's harder for the good one's to get through. We see this on the top pop charts. There are still mega acts with decent production qualities like Taylor Swift - where the artistry is getting low (she is no Michael Jackson), and then the rest of it is unlistenable, reductive garbage. There was always quite a lot of that (i.e. a lot of not-very-good music on the charts) - but the signal to noise ratio is a much bigger problem now. So - the 'decent music' that is not 'really pop' like Taylor Swift never gets through. Decent artists are stuck in a pile of noise and rubble.
ZoomZoomZoom 6y ago
>The amount Spotify/Pandora/et al pay the majority of musicians per stream is far more than they'd make selling CD's. You have to back such claims with data.

kd913 6y ago

Shouldn't they be aiming at basically Google, Amazon and Apple here for undercutting Spotify? Spotify has to price match against those giants who subsidize their respective services with other profitable aspects of the business. Spotify themselves for the most part having been losing money/matching even. What can Spotify do? They raise the cost of premium, they lose marketshare and that would be a death spiral no?

jetti 6y ago

In the US, those rates are set by Copyright Royalties Board [0] and then collected by SoundExchange [1]. The current rates for streaming on a subscription service (such as Spotify) are $0.0024 per performance.[2] The rates aren't determined by Spotify, again in the US, so it isn't Spotify's fault if the royalty per stream aren't enough to live on. [0] https://www.crb.gov/ https://www.crb.gov/ [1] https://www.soundexchange.com/ https://www.soundexchange.com/ [2] https://www.soundexchange.com/service-provider/rates/commercial-webcaster/ https://www.soundexchange.com/service-provider/rates/commerc...