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> Then again, given that Spotify’s annual revenues were last put at nearly £7bn while the per-stream rate it pays to artists is currently reckoned to be around

• greenmana 5y ago
  What would make me happy, both as a consumer and a musician, is that if I only listen to my favorite artist for the whole month, then 75 % of my monthly subscription money would go directly to said artist, and not Taylor Swift or what ever is the current "most popular pool".
  • magicalhippo 5y ago
    For that there's Bandcamp.com I got Spotify, but it's a family plan due to my SO. I buy just about all the music from Bandcamp anyway.
    • greenmana 5y ago
      Bandcamp is nice, I've also bought many albums there. Streaming stuff I mostly listen on Tidal these days, so I can imagine I get the best possible (lossless) sound quality and don't have to think I'm downgrading from CD's to Spotify when it comes to that. Not that it's a huge or even a noticeable difference in many cases... but the revenue model seems better on Tidal for the artist.
  • monsieurbanana 5y ago
    Sure, as long as your favourite artist doesn't receive money from anyone who doesn't listen to him. All the money from a small percentage of people or a small percentage of money from everyone is the same.
    • Dylan16807 5y ago
      > Sure, as long as your favourite artist doesn't receive money from anyone who doesn't listen to him. Yes. > All the money from a small percentage of people or a small percentage of money from everyone is the same. Only if you assume that people with lots of hours listen to the same mix of artists as people with few to medium hours. If accounts that are left on all day have a bias, then they will steer everyone's money in the direction of that bias.
      • dtech 5y ago
        > Only if you assume that people with lots of hours listen to the same mix of artists as people with few to medium hours. That's the big assumption, which is most likely false. Even though it's not allowed, entities like gyms or bars have the top40 on repeat throughout the day.
    • pjc50 5y ago
      Yes, this seems correct to me by simple commutation of arithmetic. Although there is a problem that "money paid per user per month is fixed", "per-stream payout is fixed", and "money allocated to recipients matches in proportion to plays" cannot all be true at the same time. Are people asking for (in the limit case) paying £10 to spotify for a month and listening to exactly one track once by Taylor Swift to result in a single royalty payment of X% of £10 to Taylor Swift?
      • monsieurbanana 5y ago
        > per-stream payout is fixed Is it fixed? I thought the article gave an average per-stream payout by a simple division of royalties and number of streams.
  • southerntofu 5y ago
    Yes, but unfortunately the copyright mafia was precisely designed to take money from independent artists up into the pockets of a tiny elite of bureaucrats and famous artists. If that sounds suspicious/conspirational to you i'm happy to elaborate.
    • dstick 5y ago
      Please, elaborate.
      • southerntofu 5y ago
        So there's a lot of considerations and a lot of different systems at play depending on where you're based. For example in France and Belgium (and probably other places), most music copyrights are handled by a State-sanctioned "non-profit" called SACEM/SABAM which has administrative fees and execs paid with 5/6 digits salaries, and arranges the money to be funneled through over a dozen other "non-profits" (who have the same kind of setup). This is not exactly a monopoly because by law you can still manage your copy "rights" individually (collective vs individual management) but then everything gets more complicated. There were talks about a decade ago of a europe-wide, cooperative collective rights management association, but i don't know what happened to that. Anyway, under this system, there are a lot of inequalities. According to official SACEM statistics, about 2/3 of their registered artists (who pay for membership) never earn a single cent every year. And in 2011, only 150 artists (less than 1%) earned over half of all redistributed revenues... then again, the amount that is being redistributed has been severely punctured by the execs/administrative types who get paid no matter what. The highest french financial authority, la Cour des Comptes, has many official reports over the years about the misbehavior of SACEM & friends and how they swindle artists through legal though dubious schemes (moving money around many orgs, each applying administrative fees until there's nothing left). So that's for "independent" artists under collective management. Then there's artists giving away their rights to publishers/editors. They will be pressured to accept a small percentage in exchange for having their album/book/movie published "for free". But they've essentially sold their soul to the devil. If their art doesn't bring a lot of money, the publisher has essentially lost nothing. But if it does, then it's making tons of money, some of which will pay for the same kind of capitalist bloodsuckers (execs/investors), and the rest will pay more well-known artists who had a position to bargain for better contracts. But even if your art fares well, your publisher may decide to stop publishing it, and there's absolutely nothing you can do about it. Under some jurisdictions you can bargain with the publisher to buy back your rights (that's gonna cost you some serious €€€), but under others you're simply left powerless because distributing your own production is now a violation of the publisher's copyright. How fucked up is that? Then there's live performances. If you're a more-or-less unknown artist, all the money you're gonna make is with a live audience. But once you've sold the rights to your music, movie, or theater piece to a copyright vampire, then you have to pay them off to play your own works and you'll only retain a portion of whatever should have ended up in your pockets. There's plenty of other aspects to consider and i'm not familiar with all of them as i'm not an artist myself, but i have enough artists in my close circles who've made the mistake of dealing with copyright, editors and such nonsense and will never do that again. I don't personally know a single artist who plays by the capitalist rules anymore because they were all fucked by the bigger fish. Now my friends all either publish free art (copyleft) or do pirate art (zero fucks given for copyright).
  • robert-boehnke 5y ago
    Without Taylor Swift (or any other big name major label artist), Spotify might not be a viable business though. Taylor Swift may argue that she's entitled to a better deal since she drives traffic, similar to how Apple Stores can negotiate better rents in shopping malls.
    • kilroy123 5y ago
      Is that true nowadays? I think in the past, yes.
    • imtringued 5y ago
      The problem is that Taylor Swift drives a lot of non subscriber traffic.
    • Dudeman112 5y ago
      That would be reflected on OP's model though - if she truly drove traffic, she would proportionally be rewarded far more than that artist
  • Reimersholme 5y ago
    Actually, I remember reading an article from someone at Spotify who argued that the economics in that situation would end up hurting small artists and favour Taylor Swift much more than the current model. As an example; big music aficionados might listen to 75 different bands in a month, which will mean 1% of their subscription money will go to each of them. The large majority of music listeners though listen to 5-10 big-name artists only. Distributing money fairly after what each premium subscriber listens too thus would end up favouring the big name artists much more than the current model they have. I have no way of knowing whether this is true, but thought it was an interesting perspective...
    • syrrim 5y ago
      See this: http://www.digitalmedia.fi/wp-content/uploads/2018/02/UC_report_final_171213.pdf http://www.digitalmedia.fi/wp-content/uploads/2018/02/UC_rep... Discussed at the time: https://news.ycombinator.com/item?id=25024552 https://news.ycombinator.com/item?id=25024552
    • imtringued 5y ago
      It doesn't really matter. Spotify just doesn't pay that much per listen in the first place. There is only so much money you can squeeze out of a $10 subscription.
    • scrps 5y ago
      I think a tipping system would be a better solution, preferably one where 100% of the tip goes to the artist. Spotify still gets their cut from subs and I get to make sure I support the artists I actually listen to. Clarity edit: I mean a tipping system on top of the existing system.
  • tass 5y ago
    Deezer: https://www.deezer.com/ucps https://www.deezer.com/ucps
• superjan 5y ago
  Isn’t the problem that the record companies keep most of that?
• tremon 5y ago
  Spotify pays out about 75% [1] of their revenue as royalties Your statement is equally disingenuous. How much of that 75% ends up going to the artists?
  • dtech 5y ago
    How it that relevant? Just as a music shop selling CDs cannot fix that a lot of their royalties (purchase price) don't go directly to artists and music labels skim a lot, Spotify cannot fix this. In fact, Spotify has improved this situation, as self-publishing is now a lot more viable than 20 years ago.
  • jbverschoor 5y ago
    Not only that, but it's plain incorrect. False information
    • dtech 5y ago
      Please provide sources if you disagree with my source instead of just asserting it's false
      • jbverschoor 5y ago
        The spotify Q1 financial statement https://investors.spotify.com/financials/default.aspx https://investors.spotify.com/financials/default.aspx https://s22.q4cdn.com/540910603/files/doc_financials/2021/q1/f3a5d6f7-4036-4117-9913-c35194e1371a.pdf https://s22.q4cdn.com/540910603/files/doc_financials/2021/q1... Page 4: > Revenue 2,147 1,848 > Cost of revenue 1,599 1,376 So 74%, but cost of revenue is: Page 32: Cost of Revenue =============== > Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. We incur royalty costs, which we pay to certain record labels, music publishers, and other rights holders, for the right to stream music to our users. Royalties are typically calculated monthly based on the combination of a number of different elements. Generally, Premium Service royalties are based on the greater of a percentage of revenue and a per user amount. Royalties for the Ad-Supported Service are typically a percentage of relevant revenue, although certain agreements are based on the greater of a percentage of relevant revenue and an amount for each time a sound recording and musical composition is streamed. We have negotiated lower per user amounts for our lower priced subscription plans such as Family Plan, Duo Plan, and Student Plan users. In our agreements with certain record labels, the percentage of revenue used in the calculation of royalties is generally dependent upon certain targets being met. The targets can include such measures as the number of Premium Subscribers, the ratio of Ad-Supported Users to Premium Subscribers, and/or the rates of Premium Subscriber churn. In addition, royalty rates vary by country. Some of our royalty agreements require that royalty costs be paid in advance or are subject to minimum guaranteed amounts. For the majority of royalty agreements, incremental costs incurred due to un-recouped advances and minimum guarantees have not been significant to date. We also have certain so-called most favored nation royalty agreements, which require us to record additional costs if certain material contract terms are not as favorable as the terms we have agreed to with similar licensors. > Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. Cost of revenue also includes discounted trial costs. So assuming "predominantly" means between 50% and 60% (otherwise it would've been specified and used for marketing communications), they're spending about 44% on royalties. The other 30% is easily "spent", rather allocated, on: "credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets" This is in line with the "Apple spends pays twice as much royalties with Apple Music". For example, they said they're spending 450M on google cloud in 2018-2021. So one quarter would already be 37.5M, based on only that, about 2%. Then you have the payment processing, let's say 2%. They have 5,584 employees, of which a big chunck is probably support. etc.
• jbverschoor 5y ago
  You should read a bit further.. > Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. Cost of revenue also includes discounted trial cost Also, Apple's App Store charges 15% for subscription, and includes most of thath. Apple Music pays double the rate of Spotify.