6 ms·

Reductive thinking and the unfairness of Spotify payments

34 points by edent 3y ago

amadeuspagel 3y ago
There are many different systems which are fair in the sense that they treat all artists equally, but in fact artists are not equal. Some artists are powerful enough that people would leave a streaming service if it didn't have them, so they are able to bargain for more then the service can pay to everyone.
alerter 3y ago
I don't really agree with this. There may not be a mathematically perfect solution to the problem of paying artists, but that doesn't preclude criticism. Apart from anything else, Spotify isn't trying to find the fairest approach, it's trying to leverage its market dominance to increase profitability and maintain market share.
- edent 3y ago
  This isn't necessarily about mathematical fairness. The cake-slicing algorithm beloved by parents of waring siblings is a good example. "I cut, you choose" isn't guaranteed to give a 50/50 split. But it incentivises the cutter to act with loss minimisation as their goal. And most kids can intuit how fair that is. There are cake slicing algorithms for increasing numbers of participants. But they become increasingly harder to understand for people who aren't experts in game theory. So you're left with the problem of what causes the least complaints rather than what is logically fair.
apwell23 3y ago
User 1 listens once to a 3 minute song by Ariana Grande. User 2 listens once to a 3 minute song by Billie Eilish. That's all they do for that month. I think most reasonable people would say that artists A & B would split the money evenly. I don't think reasonable people would say that. Artists should be able to negotiate how much their stream costs.
- infecto 3y ago
  Was that in the problem constraint? I don’t really think it belongs. I also don’t think a ton of people would disagree with your statement but it has too many open ended question for these examples. Does the artist own their songs? Does the label have any control on which streaming services are used? If the artist owns all of their songs, they don’t have to stream them on Spotify.
  - nicce 3y ago
    Yeah, if someone would be able to negotiate about the price, it assumes that they are desired or popular; the platform cannot afford to not take them. But does it matter? If they really are popular, they will be popular on the platform as well. Let the statistics define the value and compensation, hopefully equally.
    - pc86 3y ago
      Why is it "hopefully equally?" I'm not convinced a system that gives Grande and Eilish both $1 per stream on $2 revenue is inherently better than one that gives Grande $1.50 and Eilish $0.50 from $2 revenue, or better than one that gives Grande $0.10 and Eilish $0.05 from $2 revenue.
- the_other 3y ago
  > I don't think reasonable people would say that. Why don't you think this? What's unreasonable about the distribution in this example? > Artists should be able to negotiate how much their stream costs. reply How could that possibly work? It would lead to shop/bandcamp style artist-fan pricing, which the casual listening market has been trained out of.
- satyrnein 3y ago
  This is pretty much the case already; the contracts with Spotify are negotiated. It's just that it's record labels (and not artists) doing the negotiating, since they own the recordings.
prepend 3y ago
The alternative is that artists get nothing from these customers. It’s not like Spotify is getting rich. They keep 30% and give artists 70% (although much goes to labels, but the point is that Spotify only gets 30%). The market isn’t there for people to pay so much for music. It’s not unfair as much as a busker not being a millionaire isn’t unfair either. How much money should someone get for a million people listening to their song? What’s the fair amount? I’m not sure, but I think Spotify is the closest artists have ever gotten given the historical payouts for radio, album sales, etc. I think most of this is just people not understanding and naturally wanting more.
- infecto 3y ago
  Tend to agree here. Maybe artists made more money back in the day on radio time and sold albums. From all the anecdotes you hear, it was the producers/labels that took the majority of the revenue. I think it’s fine for artists to want more, it’s a free market after all, they might just not get it.
  - 0thgen 3y ago
    On top of that, the "average" payout to artists feels less important to me than the "median" artist payout. In other words, are there now more artists making money than before, even if the big hitters are making less off album sales? That matters a lot
- rhasenack 3y ago
  I have a musician friend that had a fairly successful (locally) independent band from around 2008 to 2012. I've talked to him a couple of time about the business side of it - when the band started they managed to create a nice community of people that liked their music, even before they released their first album. People would go to concerts and buy a lot of merchandise and their CDs and even vinils when they recorded and released their music. He shared that with the popularization of streaming services, they lost a lot of their identity and this community lost a lot of force. At the same time, a lot more people were listening to their music (and still are), but the return to them was really low, both monetarily and in the sense of accomplishment of the band.
Apleks 3y ago
I'd like to point out the analysis done by Cory Doctorow on Spotify, and by extension, on the whole streaming industry: https://doctorow.medium.com/spotify-steals-from-artists-a-spotify-exclusive-91c564436c9d https://doctorow.medium.com/spotify-steals-from-artists-a-sp...
- infecto 3y ago
  Unfortunately medium paywalled. Wish I could pay for a single article.
  - jraph 3y ago
    Disabling JS on medium removes the paywall and makes the whole website lightweight and fast. uBlock Origin has a convenient feature for this.
    - ethbr1 3y ago
      Can we observe the irony of a comment about avoiding paying for content, in a discussion about the most artist-equitable way to pay for content?
      - jraph 3y ago
        I'm observing quite hard now.
  - danaris 3y ago
    Cory tends to post his stuff to several places: the most reliable, AIUI, is pluralistic.net. You can find this same article there at https://pluralistic.net/2022/09/12/streaming-doesnt-pay/#stunt-publishing https://pluralistic.net/2022/09/12/streaming-doesnt-pay/#stu...
jasode 3y ago
The common suggested alternative payment system to fix the "unfairness" of Spotify's current splitting of the pie is "user-centric" payments: https://www.google.com/search?q=spotify+user-centric+payment https://www.google.com/search?q=spotify+user-centric+payment It's easier to illustrate that idea with a more extreme example: User 1 listens to nothing but songs from an obscure independent jazz artist and never any pop songs. In Spotify's current payout system based on pro-rata streams count, most of User 1's subscription money will still go to popular artists on big record labels like Taylor Swift, Drake, Ed Sheeran, etc. The user-centric model wants 100% of User 1's money to go to that independent artist and 0% to Taylor Swift. For the author's particular examples... >Now let's take a different scenario. User 1 listens to 90 songs by Ariana Grande. User 2 listens to 10 songs by Billie Eilish. >How should the money be fairly split? 50:50? 90:10? Something else? Using "user-centric" model, 100% of User 1's payment would go to AG and 100% of User 2 goes to BE. From the perspective of the TOTAL SUM, this also means that 50% of the total pie goes to AG and the other 50% goes to BE. >Imagine two users of Spotify. Both pay £10/month. User 1 only listens to 900 ABBA songs. User 2 only listens to 100 Beatles songs. 90% ABBA, 10% Beatles ? 50% each ? Same math breakdown as AG and BE above.
- paxys 3y ago
  It's pointless to come up with models like these because none of the top artists are going to keep their music on the platform if their payout is reduced to that degree. For any such unlimited usage model to work the low volume users always have to subsidize the opposite end.
  - deleted 3y ago
    [deleted]
  - esafak 3y ago
    The richest artists are going to leave the platform, and do what; start their own, go back to iTunes, or rely on concerts? I can't see that happening, but I'm sure Spotify is capable of estimating how the revenue attribution scheme affects artist- and consequently subscriber retention. I'm in favor of paying artists in proportion to time played; that's a granular vote by users.
gnarlouse 3y ago
I think my grief about the subscription model with streaming services is that the service they provide does NOT remotely justify the addition cost to prop up the platform. Think on it: pre-2009 (or whenever you first met Spotify), assuming you weren’t illegally downloading, there were really two main entities you were paying for the price of a CD: the label and the artist. I suppose if you wanted you could work in the distributor, like a Sam Goody or Best Buy. And what happened? You paid $10-20 one time and the music was durably yours forever. You could exchange CDs among your friends, which as a side note created made finding new music all the more personal. Nowadays, I’m paying an ever increasing sum of money for music I’ll never own a copy of outright, to primarily pay off the Spotify platform’s AWS bill, c-level salaries, shareholders, and engineer salaries. Then basically the same thing for the record companies. And whatever detritus scraps are left over, dangle in front of the artist and make him do something embarrassing for it. It’s basically techno-sadism. I sorta hope music just up and dies to teach us all a lesson about what a great bunch of twats we all are.
- ethbr1 3y ago
  On the other hand, Spotify is objectively a better offering for what most music listeners want -- access to music. They don't want to think about whether a particular song or artist is on a particular CD. They want to play one of anything, as the mood strikes them. Generally, they're probably fine with leasing (cheaper) access to (more) music, versus (more expensively) owning (less) music. Ownership just doesn't confer enough utility to make up the price gap. I'm as anti never-ownership-trend as you'll find, but it's hard to fault Spotify for "winning", given the huge disparity in user utility.
  - gnarlouse 3y ago
    Did you not live through the iTunes era or something it addresses every one of your points here I fault mankind for being uncritically thinking to let Spotify win But then again “mainstream” mankind made Taylor Swift and Kanye West billionaires.
    - ethbr1 3y ago
jp57 3y ago
Why assume that you have to charge every user the same amount and then divide up the income fractionally based on usage? An (arguably simpler) alternative is you begin by paying a fixed constant amount to the artist for every stream, then figure out a pricing model. I'd also argue that "fairness" is not really that important. One could in theory charge a fixed monthly rate to customers and pay a fixed constant fee to artists as long as the company's finances work out favorably. It's not really the customer's business how the company's costs are distributed.
- paxys 3y ago
  Artists want to be paid per stream rather than get a fixed amount. Users want to pay a fixed monthly fee and get unlimited access. Spotify has figured out the best way to combine the two, and this involves pooling all the money paid by all users – regardless of what they listen to – and then allotting it to artists based on the number of streams they served to the platform. Yes this means that plenty of users are subsidizing artists they don't like, but this is also what works best for everyone in the system. Trying to paint it as "fair" or "unfair" is pointless.
  - jp57 3y ago
    Yeah. I said “a constant amount to the artist for every stream.” So yes. Per stream.
    - terminous 3y ago
      Yeah pretty much no normal consumer wants to pay per stream.
      - jp57 3y ago
        There are plenty of flat-rate customer billing models that would support paying artists a fixed price per stream. If the argument is that it would be "too expensive" -- i.e. it would end up paying the artists "too much" -- well, that's something to think about, isn't it?
v-h-z 3y ago
Although the 900 Abba vs 100 Beatles is not very clear for me, and might not be either for 36% of voters. Even though if I think about it I guess the 900 Abba songs are the total of tracks listened (I don’t think Abba has produced more than 900 tracks), at first glance I read that as: user A likes Abba a lot and spent x hours listening to 900 Abba different tracks, while user B spent the same x hours listening to 100 Beatles different tracks (which is possible for the Beatles). Which in that case would be an obvious 50/50 for me. It obviously makes no sense, but well.. the polling is on twitter right?
- Cthulhu_ 3y ago
  They mean 900 streams vs 100 streams, whether the tracks are different or not is not important for the payout.
brudgers 3y ago
I've no idea how much a recording artist gets every time their song is played on the radio In the US, $0.00. And "a million listens" is like KROQ playing your song only once where the once was a Tuesday afternoon in 1982. If you want to get paid, ask people to pay you.
the_other 3y ago
As I see it, the problem is fixed pricing per stream. It would be fairer to the musicians if Spotify would define the payout pot per month, or quarter, and then pay out equally per stream from the pot.
- satyrnein 3y ago
  This is exactly how it currently works. Rightsholders get a pro rata share of the pot based on stream share.
  - the_other 3y ago
    It's not "exactly" how it works. Spotify don't pay you anything at all if your track gets <1000 plays. This means low-count content is subsidising higher count content. I have seen articles detailing the different payout per stream of the different services, several times in recent years. From this I had assumed the payouts were fixed rate. I accept I could have misunderstood.

34 points by edent 3y ago

There are many different systems which are fair in the sense that they treat all artists equally, but in fact artists are not equal. Some artists are powerful enough that people would leave a streaming service if it didn't have them, so they are able to bargain for more then the service can pay to everyone.

alerter 3y ago

I don't really agree with this. There may not be a mathematically perfect solution to the problem of paying artists, but that doesn't preclude criticism. Apart from anything else, Spotify isn't trying to find the fairest approach, it's trying to leverage its market dominance to increase profitability and maintain market share.

edent 3y ago
This isn't necessarily about mathematical fairness. The cake-slicing algorithm beloved by parents of waring siblings is a good example. "I cut, you choose" isn't guaranteed to give a 50/50 split. But it incentivises the cutter to act with loss minimisation as their goal. And most kids can intuit how fair that is. There are cake slicing algorithms for increasing numbers of participants. But they become increasingly harder to understand for people who aren't experts in game theory. So you're left with the problem of what causes the least complaints rather than what is logically fair.

apwell23 3y ago

User 1 listens once to a 3 minute song by Ariana Grande. User 2 listens once to a 3 minute song by Billie Eilish. That's all they do for that month. I think most reasonable people would say that artists A & B would split the money evenly. I don't think reasonable people would say that. Artists should be able to negotiate how much their stream costs.

infecto 3y ago
Was that in the problem constraint? I don’t really think it belongs. I also don’t think a ton of people would disagree with your statement but it has too many open ended question for these examples. Does the artist own their songs? Does the label have any control on which streaming services are used? If the artist owns all of their songs, they don’t have to stream them on Spotify.
- nicce 3y ago
  Yeah, if someone would be able to negotiate about the price, it assumes that they are desired or popular; the platform cannot afford to not take them. But does it matter? If they really are popular, they will be popular on the platform as well. Let the statistics define the value and compensation, hopefully equally.
  - pc86 3y ago
    Why is it "hopefully equally?" I'm not convinced a system that gives Grande and Eilish both $1 per stream on $2 revenue is inherently better than one that gives Grande $1.50 and Eilish $0.50 from $2 revenue, or better than one that gives Grande $0.10 and Eilish $0.05 from $2 revenue.
the_other 3y ago
> I don't think reasonable people would say that. Why don't you think this? What's unreasonable about the distribution in this example? > Artists should be able to negotiate how much their stream costs. reply How could that possibly work? It would lead to shop/bandcamp style artist-fan pricing, which the casual listening market has been trained out of.
satyrnein 3y ago
This is pretty much the case already; the contracts with Spotify are negotiated. It's just that it's record labels (and not artists) doing the negotiating, since they own the recordings.

prepend 3y ago

The alternative is that artists get nothing from these customers. It’s not like Spotify is getting rich. They keep 30% and give artists 70% (although much goes to labels, but the point is that Spotify only gets 30%). The market isn’t there for people to pay so much for music. It’s not unfair as much as a busker not being a millionaire isn’t unfair either. How much money should someone get for a million people listening to their song? What’s the fair amount? I’m not sure, but I think Spotify is the closest artists have ever gotten given the historical payouts for radio, album sales, etc. I think most of this is just people not understanding and naturally wanting more.

infecto 3y ago
Tend to agree here. Maybe artists made more money back in the day on radio time and sold albums. From all the anecdotes you hear, it was the producers/labels that took the majority of the revenue. I think it’s fine for artists to want more, it’s a free market after all, they might just not get it.
- 0thgen 3y ago
  On top of that, the "average" payout to artists feels less important to me than the "median" artist payout. In other words, are there now more artists making money than before, even if the big hitters are making less off album sales? That matters a lot
rhasenack 3y ago
I have a musician friend that had a fairly successful (locally) independent band from around 2008 to 2012. I've talked to him a couple of time about the business side of it - when the band started they managed to create a nice community of people that liked their music, even before they released their first album. People would go to concerts and buy a lot of merchandise and their CDs and even vinils when they recorded and released their music. He shared that with the popularization of streaming services, they lost a lot of their identity and this community lost a lot of force. At the same time, a lot more people were listening to their music (and still are), but the return to them was really low, both monetarily and in the sense of accomplishment of the band.

Apleks 3y ago

I'd like to point out the analysis done by Cory Doctorow on Spotify, and by extension, on the whole streaming industry: https://doctorow.medium.com/spotify-steals-from-artists-a-spotify-exclusive-91c564436c9d https://doctorow.medium.com/spotify-steals-from-artists-a-sp...

infecto 3y ago
Unfortunately medium paywalled. Wish I could pay for a single article.
- jraph 3y ago
  Disabling JS on medium removes the paywall and makes the whole website lightweight and fast. uBlock Origin has a convenient feature for this.
  - ethbr1 3y ago
    Can we observe the irony of a comment about avoiding paying for content, in a discussion about the most artist-equitable way to pay for content?
    - jraph 3y ago
      I'm observing quite hard now.
- danaris 3y ago
  Cory tends to post his stuff to several places: the most reliable, AIUI, is pluralistic.net. You can find this same article there at https://pluralistic.net/2022/09/12/streaming-doesnt-pay/#stunt-publishing https://pluralistic.net/2022/09/12/streaming-doesnt-pay/#stu...

jasode 3y ago

The common suggested alternative payment system to fix the "unfairness" of Spotify's current splitting of the pie is "user-centric" payments: https://www.google.com/search?q=spotify+user-centric+payment https://www.google.com/search?q=spotify+user-centric+payment It's easier to illustrate that idea with a more extreme example: User 1 listens to nothing but songs from an obscure independent jazz artist and never any pop songs. In Spotify's current payout system based on pro-rata streams count, most of User 1's subscription money will still go to popular artists on big record labels like Taylor Swift, Drake, Ed Sheeran, etc. The user-centric model wants 100% of User 1's money to go to that independent artist and 0% to Taylor Swift. For the author's particular examples... >Now let's take a different scenario. User 1 listens to 90 songs by Ariana Grande. User 2 listens to 10 songs by Billie Eilish. >How should the money be fairly split? 50:50? 90:10? Something else? Using "user-centric" model, 100% of User 1's payment would go to AG and 100% of User 2 goes to BE. From the perspective of the TOTAL SUM, this also means that 50% of the total pie goes to AG and the other 50% goes to BE. >Imagine two users of Spotify. Both pay £10/month. User 1 only listens to 900 ABBA songs. User 2 only listens to 100 Beatles songs. 90% ABBA, 10% Beatles ? 50% each ? Same math breakdown as AG and BE above.

paxys 3y ago
It's pointless to come up with models like these because none of the top artists are going to keep their music on the platform if their payout is reduced to that degree. For any such unlimited usage model to work the low volume users always have to subsidize the opposite end.
- deleted 3y ago
  [deleted]
- esafak 3y ago
  The richest artists are going to leave the platform, and do what; start their own, go back to iTunes, or rely on concerts? I can't see that happening, but I'm sure Spotify is capable of estimating how the revenue attribution scheme affects artist- and consequently subscriber retention. I'm in favor of paying artists in proportion to time played; that's a granular vote by users.

gnarlouse 3y ago

I think my grief about the subscription model with streaming services is that the service they provide does NOT remotely justify the addition cost to prop up the platform. Think on it: pre-2009 (or whenever you first met Spotify), assuming you weren’t illegally downloading, there were really two main entities you were paying for the price of a CD: the label and the artist. I suppose if you wanted you could work in the distributor, like a Sam Goody or Best Buy. And what happened? You paid $10-20 one time and the music was durably yours forever. You could exchange CDs among your friends, which as a side note created made finding new music all the more personal. Nowadays, I’m paying an ever increasing sum of money for music I’ll never own a copy of outright, to primarily pay off the Spotify platform’s AWS bill, c-level salaries, shareholders, and engineer salaries. Then basically the same thing for the record companies. And whatever detritus scraps are left over, dangle in front of the artist and make him do something embarrassing for it. It’s basically techno-sadism. I sorta hope music just up and dies to teach us all a lesson about what a great bunch of twats we all are.

ethbr1 3y ago
On the other hand, Spotify is objectively a better offering for what most music listeners want -- access to music. They don't want to think about whether a particular song or artist is on a particular CD. They want to play one of anything, as the mood strikes them. Generally, they're probably fine with leasing (cheaper) access to (more) music, versus (more expensively) owning (less) music. Ownership just doesn't confer enough utility to make up the price gap. I'm as anti never-ownership-trend as you'll find, but it's hard to fault Spotify for "winning", given the huge disparity in user utility.
- gnarlouse 3y ago
  Did you not live through the iTunes era or something it addresses every one of your points here I fault mankind for being uncritically thinking to let Spotify win But then again “mainstream” mankind made Taylor Swift and Kanye West billionaires.
  - ethbr1 3y ago

jp57 3y ago

Why assume that you have to charge every user the same amount and then divide up the income fractionally based on usage? An (arguably simpler) alternative is you begin by paying a fixed constant amount to the artist for every stream, then figure out a pricing model. I'd also argue that "fairness" is not really that important. One could in theory charge a fixed monthly rate to customers and pay a fixed constant fee to artists as long as the company's finances work out favorably. It's not really the customer's business how the company's costs are distributed.

paxys 3y ago
Artists want to be paid per stream rather than get a fixed amount. Users want to pay a fixed monthly fee and get unlimited access. Spotify has figured out the best way to combine the two, and this involves pooling all the money paid by all users – regardless of what they listen to – and then allotting it to artists based on the number of streams they served to the platform. Yes this means that plenty of users are subsidizing artists they don't like, but this is also what works best for everyone in the system. Trying to paint it as "fair" or "unfair" is pointless.
- jp57 3y ago
  Yeah. I said “a constant amount to the artist for every stream.” So yes. Per stream.
  - terminous 3y ago
    Yeah pretty much no normal consumer wants to pay per stream.
    - jp57 3y ago
      There are plenty of flat-rate customer billing models that would support paying artists a fixed price per stream. If the argument is that it would be "too expensive" -- i.e. it would end up paying the artists "too much" -- well, that's something to think about, isn't it?

v-h-z 3y ago

Although the 900 Abba vs 100 Beatles is not very clear for me, and might not be either for 36% of voters. Even though if I think about it I guess the 900 Abba songs are the total of tracks listened (I don’t think Abba has produced more than 900 tracks), at first glance I read that as: user A likes Abba a lot and spent x hours listening to 900 Abba different tracks, while user B spent the same x hours listening to 100 Beatles different tracks (which is possible for the Beatles). Which in that case would be an obvious 50/50 for me. It obviously makes no sense, but well.. the polling is on twitter right?

Cthulhu_ 3y ago
They mean 900 streams vs 100 streams, whether the tracks are different or not is not important for the payout.

brudgers 3y ago

I've no idea how much a recording artist gets every time their song is played on the radio In the US, $0.00. And "a million listens" is like KROQ playing your song only once where the once was a Tuesday afternoon in 1982. If you want to get paid, ask people to pay you.

the_other 3y ago

As I see it, the problem is fixed pricing per stream. It would be fairer to the musicians if Spotify would define the payout pot per month, or quarter, and then pay out equally per stream from the pot.

satyrnein 3y ago
This is exactly how it currently works. Rightsholders get a pro rata share of the pot based on stream share.
- the_other 3y ago
  It's not "exactly" how it works. Spotify don't pay you anything at all if your track gets <1000 plays. This means low-count content is subsidising higher count content. I have seen articles detailing the different payout per stream of the different services, several times in recent years. From this I had assumed the payouts were fixed rate. I accept I could have misunderstood.