4 ms·

Yes, ignoring all other costs isn't great. Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family me

Yes, ignoring all other costs isn't great. Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family memberships. Excluding free users, it's probably ~$5 per user. That being said, Apple Music pays .75p/stream, Tidal is 1.25p/stream. They can probably figure it out.

stephenhuey 6y ago
If they cannot pay the artists more, a long-term freemium plan might not be a great business model then. If free users are seriously cutting into profits, should they change the free plan to a limited free trial? I was around in the 80s 90s and we didn't really have free cassettes and CDs and radio paid studios & artists with ad revenue. Spotify is well known enough now that it could be argued an unending free tier may no longer be necessary.
- mrgreenfur 6y ago
  Totally agree. Maybe spotify should look like an app store with fees in the 30% range at the top end (shopify/apple/steam). Their role is very similar: distribution and discovery. They probably could wi points giving better payouts per stream to smaller artists too, like steam does. Hopefully competition will force it down too (eg epic vs steam vs apple). We might need open access to back catalogues and not exclusive deals, but its a start
  - mattnewton 6y ago
    The App Store for music exists many times over and users (including myself) prefer a lower cost streaming model. There is simply too much cheap or free music out there now for me to value it at iTunes singles prices.
    - wtetzner 6y ago
      Of course, and users would prefer completely free music over cheap music too. That doesn't mean it's sustainable, though.
      - mattnewton 6y ago
        I mean, short of government legislation the market isn’t going to stop driving the price of music down. The marginal cost of additional “performances” of the song is almost zero and people are constantly making new recordings for free because they love doing so. I don’t see why making a living off digitally recorded music has to be sustainable, and I don’t see how it can be when the supply is so endless.
        wtetzner 6y ago
        It very well may not be sustainable. But I guess my point is that Spotify's business model might turn out to not be sustainable if artists decide it's not worth it to have their music on it. If they don't decide that, then of course, maybe you just can't make a living selling music through Spotify. You could probably make a living as a musician in other ways, though.
- mattnewton 6y ago
  This doesn’t make sense to me, it’s not that they are eating into profits, it’s that they are eating into average margin; they presumably still at least break even on free users. And I would bet dollars to donuts that those free users are not going to convert to paid when piracy, YouTube videos, and free trials of other services exist.
  - Rule35 6y ago
    I think Spotify is the first service to tempt me from piracy. Piracy doesn't handle discovery, or access across multiple devices, is a pain, and is actually (who knew?) illegal. Spotify handles all of those and won't get you arrested. Youtube for music is simply worse than pirating and being caught.
    - dont__panic 6y ago
      To be fair, back in the day I used last.fm for music discovery, social music stuff, etc. and the more Spotify forces podcasts down my (paying subscription) throat the more I want to go back to piracy + last.fm.
- Rule35 6y ago
  Perhaps the dynamics have changed since you had to shop for music in physical stores, and purchase it in hour-long increments. I certainly play more music now than when I had to change the tape, but without the ritual and the intent, I listen a lot less. This changes my value from streaming over simply not having to store my music library locally. It doesn't cost an artist more to be played more, but it does cost the streaming service. This may bring more casual listening and help some artists, and "underpay" someone who's more famous and would get the bulk of the first-song play that comes from intent. I don't think it's "wrong" but it may be the wrong fit for any given artist.
vardaro 6y ago
The nominal figure of what the platform per stream pays artists should not be discussed without taking into consideration the amount of monthly active users using the platform. Tidal and AM have significantly fewer users than Spotify
Dma54rhs 6y ago
> Yes, ignoring all other costs isn't great. > Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family memberships. Excluding free users, it's probably ~$5 per user. > That being said, Apple Music pays .75p/stream, Tidal is 1.25p/stream. They can probably figure it out. Their rates are per country, they differ. So these calculations gave to it into account, but everyone pays the 5 or whatever it costs now in the west.
- smachiz 6y ago
  The amount they pay per stream differs per country too, I think.

stephenhuey 6y ago

If they cannot pay the artists more, a long-term freemium plan might not be a great business model then. If free users are seriously cutting into profits, should they change the free plan to a limited free trial? I was around in the 80s 90s and we didn't really have free cassettes and CDs and radio paid studios & artists with ad revenue. Spotify is well known enough now that it could be argued an unending free tier may no longer be necessary.

mrgreenfur 6y ago
Totally agree. Maybe spotify should look like an app store with fees in the 30% range at the top end (shopify/apple/steam). Their role is very similar: distribution and discovery. They probably could wi points giving better payouts per stream to smaller artists too, like steam does. Hopefully competition will force it down too (eg epic vs steam vs apple). We might need open access to back catalogues and not exclusive deals, but its a start
- mattnewton 6y ago
  The App Store for music exists many times over and users (including myself) prefer a lower cost streaming model. There is simply too much cheap or free music out there now for me to value it at iTunes singles prices.
  - wtetzner 6y ago
    Of course, and users would prefer completely free music over cheap music too. That doesn't mean it's sustainable, though.
    - mattnewton 6y ago
      I mean, short of government legislation the market isn’t going to stop driving the price of music down. The marginal cost of additional “performances” of the song is almost zero and people are constantly making new recordings for free because they love doing so. I don’t see why making a living off digitally recorded music has to be sustainable, and I don’t see how it can be when the supply is so endless.
      - wtetzner 6y ago
        It very well may not be sustainable. But I guess my point is that Spotify's business model might turn out to not be sustainable if artists decide it's not worth it to have their music on it. If they don't decide that, then of course, maybe you just can't make a living selling music through Spotify. You could probably make a living as a musician in other ways, though.
mattnewton 6y ago
This doesn’t make sense to me, it’s not that they are eating into profits, it’s that they are eating into average margin; they presumably still at least break even on free users. And I would bet dollars to donuts that those free users are not going to convert to paid when piracy, YouTube videos, and free trials of other services exist.
- Rule35 6y ago
  I think Spotify is the first service to tempt me from piracy. Piracy doesn't handle discovery, or access across multiple devices, is a pain, and is actually (who knew?) illegal. Spotify handles all of those and won't get you arrested. Youtube for music is simply worse than pirating and being caught.
  - dont__panic 6y ago
    To be fair, back in the day I used last.fm for music discovery, social music stuff, etc. and the more Spotify forces podcasts down my (paying subscription) throat the more I want to go back to piracy + last.fm.
Rule35 6y ago
Perhaps the dynamics have changed since you had to shop for music in physical stores, and purchase it in hour-long increments. I certainly play more music now than when I had to change the tape, but without the ritual and the intent, I listen a lot less. This changes my value from streaming over simply not having to store my music library locally. It doesn't cost an artist more to be played more, but it does cost the streaming service. This may bring more casual listening and help some artists, and "underpay" someone who's more famous and would get the bulk of the first-song play that comes from intent. I don't think it's "wrong" but it may be the wrong fit for any given artist.

vardaro 6y ago

The nominal figure of what the platform per stream pays artists should not be discussed without taking into consideration the amount of monthly active users using the platform. Tidal and AM have significantly fewer users than Spotify

Dma54rhs 6y ago

> Yes, ignoring all other costs isn't great. > Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family memberships. Excluding free users, it's probably ~$5 per user. > That being said, Apple Music pays .75p/stream, Tidal is 1.25p/stream. They can probably figure it out. Their rates are per country, they differ. So these calculations gave to it into account, but everyone pays the 5 or whatever it costs now in the west.

smachiz 6y ago
The amount they pay per stream differs per country too, I think.