7 ms·

How Good is Spotify for Indie Musicians? (Not Good)

30 points by dgurney 15y ago

jakubw 15y ago
I don't want this sound like yet another anti-label rant but as I see it, this is mostly a chicken-egg problem caused by the big labels, that are unlikely to be charging Spotify the same fee per stream but rather a flat fee that is so high that Spotify is still at loss and can't afford paying more to smaller players. I'd imagine if more artists went independent, things could be better both for them and Spotify.
foulmouthboy 15y ago
Ridiculously short sighted analysis. So you sell 143 CDs and make your thousand bucks. Good for you. End of the road. Then you sell another 155 CDs on CD Baby. Make another thousand bucks. Yep. End of the road. In the time that it's taken to sell 298 CDs, and effectively reach 300 people, you're telling me you wouldn't (for free) make the music available to thousands of users and then just share the hell out of it? How much music gets streamed by Spotify users just looking to try a track out? That too counts as revenue. If it were me, I'd distribute across as many channels as quickly as possible and hope that I catch on as opposed to "burning out" each channel one by one in the most painfully slow marketing campaign ever.
- earbitscom 15y ago
  It is a ridiculously short sighted analysis but the point is that the thousand bucks you cited is likely to be a fraction of that if anyone can go listen to the album whenever they want for free. There are plenty of ways to market your music without making it pointless for anyone to purchase it.
- dgurney 15y ago
  Well, a lot of new media companies, including Grooveshark, have made exactly that argument. It might work for larger artists with a built-in fanbase, which makes virality easier to achieve since it'll start with some sharing momentum. But for indie artists with very small fanbases (I'm talking hundreds of fans, not thousands), having your music available for free doesn't do as much for you. The fans who would have bought your album will now listen for free and not buy it, and nobody else has heard of you. Plus, explosive virality will be harder to achieve - in general - with such a small number of people to begin with. Again, I'm sure Spotify pays out a significant amount to the record labels and major artists, but I'm talking here solely from the perspective of a small indie musician with a, say, 200 person fanbase. In that case I don't think your argument makes sense.
  - earbitscom 15y ago
    Even Coldplay just announced last week that their new album would not be on Spotify. They released it this week, it went to #1 by a landslide and a huge % of it was in digital sales. If it were available on Spotify, you can only imagine that's not what would have happened.
    - dgurney 15y ago
      Good point. I'm curious to see if there's more of this from major bands. I love Spotify, but as a musician, it does make sense to capture all the sales you can at first, and then open up your album for free streaming later. Some fans will do whatever it takes to hear an album when it's released, and if you give them a free option upon release, you're losing those sales.
  - foulmouthboy 15y ago
    Why can't you do both? The people who are finding your sell pressed CDs would probably buy it whether it was on Spotify or not. If those initial buyers then wanted to share the music with somebody else, I would think Spotify would be a MUCH preferred option compared to ripping the CD and sharing it on a torrent site. As an indie musician, your goal shouldn't be to milk as much money as you can from your 200 person fanbase, right? It should be to double and triple that fanbase. Self pressed CDs seems to be one of the slower, more painful ways of doing that.
droithomme 15y ago
I haven't used this product so perhaps I am misunderstanding the article. It seems to confuse sales royalties and streaming fees. Streaming fees are 1 cent for big names and 2/10 cent for small names, is that it? And sales commissions for outright downloaded sales are not specified. But then $1 "per stream" is suddenly brought up in the last sentence without explanation. $1 per track download or sale is somewhat industry standard, with iTunes' 99 cent tracks. But $1 per stream or single listening is not normal at all. The two seem to be very different things, downloads and single plays. To me, the article seemed to confuse them.
- dgurney 15y ago
  sorry, the $1 per stream is referring to Concert Window's royalty to artists (the artists get $1 per webcast ticket sold). Then as for Spotify, which is separate, I had originally thought that Spotify paid 1 cent to the artist/record label per stream, but in actuality it's a little under $0.002.
  - colomon 15y ago
    BTW, we've been enjoying the free webcasts from Passim (lots of Matt & Shannon!), and my wife went crazy and started talking about subscribing when she read the Concert Window upcoming schedule. It's a great service for those of us far away from those clubs. (PS once I hit the "download free track" on your webpage, none of the links on the left hand side worked any more.)
iamben 15y ago
As someone that's done 'the band thing' and been involved with plenty of others who have and are doing 'the band thing' - if I was doing it now, as a smaller artist I would absolutely go to town with distribution by whatever means necessary. I'd get onto spotify, itunes, amazon, whatever. Hell, I'd probably even give the record away for free. For a smaller (indie/indie label) band, getting people through the door was always the biggest problem. Get them through the door, get the fanbase, you can sell them whatever you like. When I had the numbers, I'd deal with the money. Long and short, I'd rather have 10 thousand people listen to my record and talk/blog/tweet about me / come to shows, than 100 people buy it and 10 people come to my show.
- bigsassy 15y ago
  Agreed. Not to mention you can make some seriously sweet profits selling merch at shows ($25 T-shirts, $0.25 stickers, and every price point in between). If you want to pay the rent as a musician, you HAVE to do it by playing a lot of shows and drawing a bunch of fans with you. speaking from experience
- cclark20 15y ago
  Except Spotify isn't for discovery and virality. What your talking about is getting people to discover music. Usually done through blogs, social media, youtube. But when your talking about a service like spotify which is really a one dimensional store for storing, putting music on your mobile device that doesn't drive merch sales or concert tickets or even fans then they should be paying there fair share to artists. Granted maybe with FB open graph integration this is changing. And of course this isn't just a Spotify problem this is a label problem (of course now they're one and the same). Anyways the question isn't whether giving your music away for free or not is a good idea -- The question is why isn't Spotify doing what they say there are there to do?... Pay artists.
  - iamben 15y ago
    I disagree - I've been using Spotify for a couple of years to discover new music. The 'Related artists' panel, and then the 'Top Hits' easily lets you find similar bands/musicians and sample their most popular songs. I'd prefer someone to discover a song of mine of Youtube, or read about me in a blog or a Twitter post, and spend the day streaming everything I've done - come to my show and singalong. Looking at listings for my local venue, I'll regularly spend the preceding days / week listening to who's coming to play before I go and see them live. I'm aware my views differ from some, but we're in an age where you can pirate an album in 30 seconds. Those that are going to steal it, will. Similarly, those that want to pay, will. Until you have enough loyal fans/generic TV/radio coverage to buy your single on iTunes, why not just let them hear it wherever and ask them to donate or buy a t-shirt or vinyl? Answering the question as to why Spotify isn't paying artists - the system may not be perfect at the minute, but it's certainly pushing the boundaries much better (and more legally) than anything previously. Which is a great, great thing, IMO.
mseebach 15y ago
I'm a long-time Spotify user, and I have not bought a single piece of music (digital or CD) since I signed up, and I suspect I won't ever again. Even if you offered me a free CD sent to my door, I wouldn't know what to do with it. I suspect the optical drive in my laptop is dead (I tried to burn a Linux install CD out of habit about a year ago, three in a row came out corrupted, then I discovered installing from USB-drives) and even if I'd get it ripped, I'd need to distribute it between my personal laptop, work desktop and phone (for living room listening). And dealing with backup. Or, if you were on Spotify, I'd invest the time it takes to type in your name and give it a listen. If I enjoyed it, I'd probably buy a ticket to your show when your tour comes to London. You're awfully concerned with getting your as-of-yet non-existent fans to cough up their cash rather than focusing on discoverability and betting on the long tail (I'm rudely making the assumption that Irish folk songs performed on accordion isn't going to displace Rihanna and Justin Beiber from the Top 40).
- dgurney 15y ago
  I suppose for a musician, taking the leap of faith from cash-in-hand to maybe-cash-down-the-road is a big one. Even if ultimately it might pay off. It's a pretty fundamental transition between business models. Edit: Also forgot to mention an important distinction in my point, which maybe wasn't clear enough: I will definitely put my music on Spotify eventually... just not at first, so I can capture a few sales that might otherwise have been lost to it.
  - mseebach 15y ago
    But you might have passed though London by the time I hear your music. Or I might read the review of your new CD in a newspaper and look you up, unsuccessfully. By the time you're there, I've long since forgotten you. I'm not in the music business, so this is only based on readings and hear-say and should be taken with a massive grain of salt: Perhaps you'd be better off forgetting about making money off of your debut album. You can focus on getting maximum reach and energise your fans and then, if you don't make any money, it's not disappointing.
- colomon 15y ago
joelrunyon 15y ago
I think there was a graph here on HN a while back on the number of CDs/mp3/streams it would take for an artist to make a certain threshold of income. If anyone could find that, it would be really helpful in conjunction with this article.
- bigwally 15y ago
  Is this it? http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music...
- joelrunyon 15y ago
  Some quick math: One million (1,000,000) streams comes out to $2,000 for the artist. Helps give perspective to the artist's deal in numbers we can actually comprehend.
- spacemanaki 15y ago
  I don't know if this is it, but it's very similar: http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music... Linked from the OP
  - joelrunyon 15y ago
    +1 - That's it. Good find.
Fliko 15y ago
This is why we have things like Bandcamp and Tunecore
bigwally 15y ago
I think $0.002 may be a tad high. The rate is closer to $0.0016 and to even have your music on Spotify you need to go through an aggregator(think fees) or pay Spotify money. Indie musicians would be lucky to get anywhere near $0.002 per play on Spotify.
swilliams 15y ago
Here's a freebie for Spotify and Rdio: Allow artists to sell their merch from your app/website. It would engender a ton of good will from artists. It might even help your margins (which I imagine can't be too huge) too. If they don't do that, there's a startup idea for someone.
cletus 15y ago
The vast majority of musicians can only support themselves via live performances. This was true before streaming services. It was true before the Internet. It's still true. Radio stations pay (through a complicated scheme) royalties to songwriters. There are no performance royalties (whereas there are on Internet-streamed radio, which can be seen as a victory for radio broadcasting lobbying). Major label artists typically earn nothing from music sales [1] due to RIAA accounting. The parallel artists shouldn't be drawing isn't to the cost of purchasing a song or a CD but to radio royalties. If a radio station plays a song, how many people hear it? How much do they earn per listener? Unfortunately, that's really hard to answer. Streaming services should be viewed as a means of discovery and curation. The bigger the audience you have the more you can make from live shows, which is your staple income unless you're the Rolling Stones, Sting, the Beatles, etc. To focus on the <1 cent per stream figure is shortsighted. You should be letting as many people as possible listen to your music. There's a reason tech companies typically start by giving away their services: build an audience and you can scale. This applies to musicians. Think about it: charging $5/head for 50 people at the local bar to listen to you takes you exactly the same amount of time as charging $50/person for 10,000+ people to listen to you in a large concert venue. Sure not everyone is going to get so famous but I guarantee you this: if you don't get relatively well-known, your income from music sales in any form won't sustain you or even be that significant.
- dgurney 15y ago
  I like a lot of what you say in this - especially the last sentence. Out of curiosity, though, does anyone have numbers on the "spread the word" free model? I'd love to see some hard evidence (it that's even possible to collect) that it works. A lot of people are essentially saying "focusing on album sales to the exclusion of free streaming is shortsighted" -- but how do we know that's true, aside from an intuitive gut reaction? Are tour revenues for Spotify artists increasing? Are more people going to gigs? There must be numbers somewhere. I should also note that a large percentage of tour revenues are from album sales; I don't know to what extent Spotify is cannibalizing those. So it's true that tour revenue is probably the number one income source, but don't forget how important physical merch sales are on those tours.
- twainer 15y ago
billboebel 15y ago
When I hear a good indie band, I try to buy something from them. I don't care what it is... a tshirt, a cd (even though I never play it), a beer cuzy, whatever. Today I can only do that at a live show. I wish someone would make it easier for me to give my money to bands I like.

30 points by dgurney 15y ago

I don't want this sound like yet another anti-label rant but as I see it, this is mostly a chicken-egg problem caused by the big labels, that are unlikely to be charging Spotify the same fee per stream but rather a flat fee that is so high that Spotify is still at loss and can't afford paying more to smaller players. I'd imagine if more artists went independent, things could be better both for them and Spotify.

foulmouthboy 15y ago

Ridiculously short sighted analysis. So you sell 143 CDs and make your thousand bucks. Good for you. End of the road. Then you sell another 155 CDs on CD Baby. Make another thousand bucks. Yep. End of the road. In the time that it's taken to sell 298 CDs, and effectively reach 300 people, you're telling me you wouldn't (for free) make the music available to thousands of users and then just share the hell out of it? How much music gets streamed by Spotify users just looking to try a track out? That too counts as revenue. If it were me, I'd distribute across as many channels as quickly as possible and hope that I catch on as opposed to "burning out" each channel one by one in the most painfully slow marketing campaign ever.

earbitscom 15y ago
It is a ridiculously short sighted analysis but the point is that the thousand bucks you cited is likely to be a fraction of that if anyone can go listen to the album whenever they want for free. There are plenty of ways to market your music without making it pointless for anyone to purchase it.
dgurney 15y ago
Well, a lot of new media companies, including Grooveshark, have made exactly that argument. It might work for larger artists with a built-in fanbase, which makes virality easier to achieve since it'll start with some sharing momentum. But for indie artists with very small fanbases (I'm talking hundreds of fans, not thousands), having your music available for free doesn't do as much for you. The fans who would have bought your album will now listen for free and not buy it, and nobody else has heard of you. Plus, explosive virality will be harder to achieve - in general - with such a small number of people to begin with. Again, I'm sure Spotify pays out a significant amount to the record labels and major artists, but I'm talking here solely from the perspective of a small indie musician with a, say, 200 person fanbase. In that case I don't think your argument makes sense.
- earbitscom 15y ago
  Even Coldplay just announced last week that their new album would not be on Spotify. They released it this week, it went to #1 by a landslide and a huge % of it was in digital sales. If it were available on Spotify, you can only imagine that's not what would have happened.
  - dgurney 15y ago
    Good point. I'm curious to see if there's more of this from major bands. I love Spotify, but as a musician, it does make sense to capture all the sales you can at first, and then open up your album for free streaming later. Some fans will do whatever it takes to hear an album when it's released, and if you give them a free option upon release, you're losing those sales.
- foulmouthboy 15y ago
  Why can't you do both? The people who are finding your sell pressed CDs would probably buy it whether it was on Spotify or not. If those initial buyers then wanted to share the music with somebody else, I would think Spotify would be a MUCH preferred option compared to ripping the CD and sharing it on a torrent site. As an indie musician, your goal shouldn't be to milk as much money as you can from your 200 person fanbase, right? It should be to double and triple that fanbase. Self pressed CDs seems to be one of the slower, more painful ways of doing that.

droithomme 15y ago

I haven't used this product so perhaps I am misunderstanding the article. It seems to confuse sales royalties and streaming fees. Streaming fees are 1 cent for big names and 2/10 cent for small names, is that it? And sales commissions for outright downloaded sales are not specified. But then $1 "per stream" is suddenly brought up in the last sentence without explanation. $1 per track download or sale is somewhat industry standard, with iTunes' 99 cent tracks. But $1 per stream or single listening is not normal at all. The two seem to be very different things, downloads and single plays. To me, the article seemed to confuse them.

dgurney 15y ago
sorry, the $1 per stream is referring to Concert Window's royalty to artists (the artists get $1 per webcast ticket sold). Then as for Spotify, which is separate, I had originally thought that Spotify paid 1 cent to the artist/record label per stream, but in actuality it's a little under $0.002.
- colomon 15y ago
  BTW, we've been enjoying the free webcasts from Passim (lots of Matt & Shannon!), and my wife went crazy and started talking about subscribing when she read the Concert Window upcoming schedule. It's a great service for those of us far away from those clubs. (PS once I hit the "download free track" on your webpage, none of the links on the left hand side worked any more.)

iamben 15y ago

As someone that's done 'the band thing' and been involved with plenty of others who have and are doing 'the band thing' - if I was doing it now, as a smaller artist I would absolutely go to town with distribution by whatever means necessary. I'd get onto spotify, itunes, amazon, whatever. Hell, I'd probably even give the record away for free. For a smaller (indie/indie label) band, getting people through the door was always the biggest problem. Get them through the door, get the fanbase, you can sell them whatever you like. When I had the numbers, I'd deal with the money. Long and short, I'd rather have 10 thousand people listen to my record and talk/blog/tweet about me / come to shows, than 100 people buy it and 10 people come to my show.

bigsassy 15y ago
Agreed. Not to mention you can make some seriously sweet profits selling merch at shows ($25 T-shirts, $0.25 stickers, and every price point in between). If you want to pay the rent as a musician, you HAVE to do it by playing a lot of shows and drawing a bunch of fans with you. speaking from experience
cclark20 15y ago
Except Spotify isn't for discovery and virality. What your talking about is getting people to discover music. Usually done through blogs, social media, youtube. But when your talking about a service like spotify which is really a one dimensional store for storing, putting music on your mobile device that doesn't drive merch sales or concert tickets or even fans then they should be paying there fair share to artists. Granted maybe with FB open graph integration this is changing. And of course this isn't just a Spotify problem this is a label problem (of course now they're one and the same). Anyways the question isn't whether giving your music away for free or not is a good idea -- The question is why isn't Spotify doing what they say there are there to do?... Pay artists.
- iamben 15y ago
  I disagree - I've been using Spotify for a couple of years to discover new music. The 'Related artists' panel, and then the 'Top Hits' easily lets you find similar bands/musicians and sample their most popular songs. I'd prefer someone to discover a song of mine of Youtube, or read about me in a blog or a Twitter post, and spend the day streaming everything I've done - come to my show and singalong. Looking at listings for my local venue, I'll regularly spend the preceding days / week listening to who's coming to play before I go and see them live. I'm aware my views differ from some, but we're in an age where you can pirate an album in 30 seconds. Those that are going to steal it, will. Similarly, those that want to pay, will. Until you have enough loyal fans/generic TV/radio coverage to buy your single on iTunes, why not just let them hear it wherever and ask them to donate or buy a t-shirt or vinyl? Answering the question as to why Spotify isn't paying artists - the system may not be perfect at the minute, but it's certainly pushing the boundaries much better (and more legally) than anything previously. Which is a great, great thing, IMO.

mseebach 15y ago

I'm a long-time Spotify user, and I have not bought a single piece of music (digital or CD) since I signed up, and I suspect I won't ever again. Even if you offered me a free CD sent to my door, I wouldn't know what to do with it. I suspect the optical drive in my laptop is dead (I tried to burn a Linux install CD out of habit about a year ago, three in a row came out corrupted, then I discovered installing from USB-drives) and even if I'd get it ripped, I'd need to distribute it between my personal laptop, work desktop and phone (for living room listening). And dealing with backup. Or, if you were on Spotify, I'd invest the time it takes to type in your name and give it a listen. If I enjoyed it, I'd probably buy a ticket to your show when your tour comes to London. You're awfully concerned with getting your as-of-yet non-existent fans to cough up their cash rather than focusing on discoverability and betting on the long tail (I'm rudely making the assumption that Irish folk songs performed on accordion isn't going to displace Rihanna and Justin Beiber from the Top 40).

dgurney 15y ago
I suppose for a musician, taking the leap of faith from cash-in-hand to maybe-cash-down-the-road is a big one. Even if ultimately it might pay off. It's a pretty fundamental transition between business models. Edit: Also forgot to mention an important distinction in my point, which maybe wasn't clear enough: I will definitely put my music on Spotify eventually... just not at first, so I can capture a few sales that might otherwise have been lost to it.
- mseebach 15y ago
  But you might have passed though London by the time I hear your music. Or I might read the review of your new CD in a newspaper and look you up, unsuccessfully. By the time you're there, I've long since forgotten you. I'm not in the music business, so this is only based on readings and hear-say and should be taken with a massive grain of salt: Perhaps you'd be better off forgetting about making money off of your debut album. You can focus on getting maximum reach and energise your fans and then, if you don't make any money, it's not disappointing.
colomon 15y ago

joelrunyon 15y ago

I think there was a graph here on HN a while back on the number of CDs/mp3/streams it would take for an artist to make a certain threshold of income. If anyone could find that, it would be really helpful in conjunction with this article.

bigwally 15y ago
Is this it? http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music...
joelrunyon 15y ago
Some quick math: One million (1,000,000) streams comes out to $2,000 for the artist. Helps give perspective to the artist's deal in numbers we can actually comprehend.
spacemanaki 15y ago
I don't know if this is it, but it's very similar: http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music... Linked from the OP
- joelrunyon 15y ago
  +1 - That's it. Good find.

Fliko 15y ago

This is why we have things like Bandcamp and Tunecore

bigwally 15y ago

I think $0.002 may be a tad high. The rate is closer to $0.0016 and to even have your music on Spotify you need to go through an aggregator(think fees) or pay Spotify money. Indie musicians would be lucky to get anywhere near $0.002 per play on Spotify.

swilliams 15y ago

Here's a freebie for Spotify and Rdio: Allow artists to sell their merch from your app/website. It would engender a ton of good will from artists. It might even help your margins (which I imagine can't be too huge) too. If they don't do that, there's a startup idea for someone.

cletus 15y ago

The vast majority of musicians can only support themselves via live performances. This was true before streaming services. It was true before the Internet. It's still true. Radio stations pay (through a complicated scheme) royalties to songwriters. There are no performance royalties (whereas there are on Internet-streamed radio, which can be seen as a victory for radio broadcasting lobbying). Major label artists typically earn nothing from music sales [1] due to RIAA accounting. The parallel artists shouldn't be drawing isn't to the cost of purchasing a song or a CD but to radio royalties. If a radio station plays a song, how many people hear it? How much do they earn per listener? Unfortunately, that's really hard to answer. Streaming services should be viewed as a means of discovery and curation. The bigger the audience you have the more you can make from live shows, which is your staple income unless you're the Rolling Stones, Sting, the Beatles, etc. To focus on the <1 cent per stream figure is shortsighted. You should be letting as many people as possible listen to your music. There's a reason tech companies typically start by giving away their services: build an audience and you can scale. This applies to musicians. Think about it: charging $5/head for 50 people at the local bar to listen to you takes you exactly the same amount of time as charging $50/person for 10,000+ people to listen to you in a large concert venue. Sure not everyone is going to get so famous but I guarantee you this: if you don't get relatively well-known, your income from music sales in any form won't sustain you or even be that significant.

dgurney 15y ago
I like a lot of what you say in this - especially the last sentence. Out of curiosity, though, does anyone have numbers on the "spread the word" free model? I'd love to see some hard evidence (it that's even possible to collect) that it works. A lot of people are essentially saying "focusing on album sales to the exclusion of free streaming is shortsighted" -- but how do we know that's true, aside from an intuitive gut reaction? Are tour revenues for Spotify artists increasing? Are more people going to gigs? There must be numbers somewhere. I should also note that a large percentage of tour revenues are from album sales; I don't know to what extent Spotify is cannibalizing those. So it's true that tour revenue is probably the number one income source, but don't forget how important physical merch sales are on those tours.
twainer 15y ago

billboebel 15y ago

When I hear a good indie band, I try to buy something from them. I don't care what it is... a tshirt, a cd (even though I never play it), a beer cuzy, whatever. Today I can only do that at a live show. I wish someone would make it easier for me to give my money to bands I like.