3 ms·

No, I don't think you are. For years there's been a conflict broadly defined as "streaming rates paid to artists are irrationally low" vs. "streaming services

No, I don't think you are. For years there's been a conflict broadly defined as "streaming rates paid to artists are irrationally low" vs. "streaming services aren't making money as it is"; the problem is that those aren't mutually exclusive positions. They can both be true at the same time. At least to me, this suggests that the real problem is that $8–10 a month for ad-free streams was too low a price point to set. If Spotify's pricing structure had been something more like Hulu's -- no free tier at all, $6/month with ads and $12/month without -- they'd have easily been able to meet that penny-per-stream pay rate. (Tidal beats that pay rate, but I suspect that's by virtue of charging $20/month for "hi-fi" streams.) But, at this point they've set consumer expectations: streaming music services cost $10 per month. Changing that would be pretty difficult.

xorcist 6y ago
> the real problem is that $8–10 a month for ad-free streams Which sounds a bit weird to me. How many people used to spend more than $10 every month on LP or CD records. Probably many enthusiasts, but the average customer? Not a chance. Yet artists say they get paid a lot less. The money must go somewhere.
- dwohnitmok 6y ago
  > Yet artists say they get paid a lot less. The money must go somewhere. I don't have any stats for this, but my first guess would be way more paid artists (before the internet, how many people could even hope to make money off music? Physical distribution vs digital distribution is a huge barrier).
- optimiz3 6y ago
  IMO spending $10 a month on CDs is a different market, since you own an asset in perpetuity. Spotify would have to guarantee a perpetual license that expands your library access the more you pay in. Instead, Spotify rents access to a single large library (which is good enough for most but very different).
  - FalconSensei 6y ago
    Exactly. When I buy a CD, I have a physical good that is displayed on my shelf and it's going to stay with me for years, and which I can possibly re-sell. $10 for Spotify gives me a month of listening to music. But after that is over, all I got is another $10 payment for the next month.
- tpmx 6y ago
  Interesting question. The US recorded music market peaked year 2000, at $13.4B. (https://musicbusinessresearch.wordpress.com/2014/03/21/the-recorded-music-market-in-the-us-2000-2013/ https://musicbusinessresearch.wordpress.com/2014/03/21/the-r...) With 282 million citizens at the time, that means every US citizen spent $3.95/month on CDs. Adjusted for inflation it's $7.56.
- chipotle_coyote 6y ago
  It's an interesting question. The cost structures are obviously very different, and while the assumption is that the internet always makes things cheaper and better, I haven't dug into that to see how it really plays out in this context.

xorcist 6y ago

> the real problem is that $8–10 a month for ad-free streams Which sounds a bit weird to me. How many people used to spend more than $10 every month on LP or CD records. Probably many enthusiasts, but the average customer? Not a chance. Yet artists say they get paid a lot less. The money must go somewhere.

dwohnitmok 6y ago
> Yet artists say they get paid a lot less. The money must go somewhere. I don't have any stats for this, but my first guess would be way more paid artists (before the internet, how many people could even hope to make money off music? Physical distribution vs digital distribution is a huge barrier).
optimiz3 6y ago
IMO spending $10 a month on CDs is a different market, since you own an asset in perpetuity. Spotify would have to guarantee a perpetual license that expands your library access the more you pay in. Instead, Spotify rents access to a single large library (which is good enough for most but very different).
- FalconSensei 6y ago
  Exactly. When I buy a CD, I have a physical good that is displayed on my shelf and it's going to stay with me for years, and which I can possibly re-sell. $10 for Spotify gives me a month of listening to music. But after that is over, all I got is another $10 payment for the next month.
tpmx 6y ago
Interesting question. The US recorded music market peaked year 2000, at $13.4B. (https://musicbusinessresearch.wordpress.com/2014/03/21/the-recorded-music-market-in-the-us-2000-2013/ https://musicbusinessresearch.wordpress.com/2014/03/21/the-r...) With 282 million citizens at the time, that means every US citizen spent $3.95/month on CDs. Adjusted for inflation it's $7.56.
chipotle_coyote 6y ago
It's an interesting question. The cost structures are obviously very different, and while the assumption is that the internet always makes things cheaper and better, I haven't dug into that to see how it really plays out in this context.