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It's a shame Spotify is just going to get killed by large music groups and anti-competitive platforms from Google and Apple. Spotify pays out 80% of its money
by bearjaws 2y ago
It's a shame Spotify is just going to get killed by large music groups and anti-competitive platforms from Google and Apple.
Spotify pays out 80% of its money to its creators, but you effectively have large middle men in the way.
Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments. Neither of them even directly report revenue from their services.
Think about it, Apple or Google make more net profit from Spotify subscriptions than Spotify does.
Meanwhile, TikTok only pays per the number of videos using your music, not the number of times the videos are played. The only worse deal for artists would to not be paid at all...
- Always42 2y agoNot everybody pays for subscription through those platforms afaik
- barbazoo 2y agoI didn’t even know I could. Not that I want to obviously.
- scarface_74 2y agoActually no one does.
- echelon 2y agoAntitrust. Break up big tech next election cycle. The big companies are suffocating entire industries because their scale is so large that they don't even need to profit in many of their businesses. They just enter new markets, snuff out the competition, and add eyeballs to their platforms. Amazon is a movie studio and a grocery store and a primary healthcare provider. Google owns every ingress to the web on every pane of glass. Apple taxes and polices all activity happening on a platform they tightly control and that due to economies of scale you can't launch a competitor. Their duopoly partner in crime is complicit.
- xandrius 2y agoYep, big tech sounds like they are in a dire position right now /s
- scarface_74 2y agoThis has absolutely nothing to do with Spotify’s bad business model. Spotify hasn’t allowed in app purchases for almost a decade Amazon doesn’t wield much power at all in the grocery industry or the movie streaming industry.
- echelon 2y agoBecause Apple and Google are abusing their power to tax and dictate the shape of all modern digital businesses.
- scarface_74 2y agoApple doesn’t “tax” Spotify. Spotify doesn’t allow in app purchasing, neither does Netflix. Apple is not getting 30% from Spotify
- elevatedastalt 2y agoI think the big entities you should be directing your anger towards are the big media companies, not tech companies. When it comes to streaming, Media companies have the Tech companies balls in a vice grip.
- michaelt 2y agoThanks to big tech: When a German citizen listens to German music released by a German record label, Google or Apple takes a cut and transfers it to America. When a French company advertises on social media to French citizens, Google or Facebook takes a cut and transfers it to America. When a Swedish citizen installs a mobile app from a Swedish company, Google or Apple takes a cut and transfers it to America. When a British citizen makes a purchase from a British company, Visa or Mastercard takes a cut and transfers it to America. When a Danish company buys a PC, Intel/AMD and Microsoft take a cut and transfer it to America. And when an Italian company needs hosting services, there's a good chance Amazon, Google or Microsoft will be providing them - transferring the money to America. Have you ever considered that so long as it's an American monopoly, bringing in fistfuls of cash in from abroad, there's no need to break up the goose that lays the golden egg?
- thunkingdeep 2y agoIf you login to Spotify on the website you can get a better deal and then you can sign in on your phone and it will work like normal. If they got into trouble I assume they’d just make all the users do it that way…
- bearjaws 2y agoThat is an exclusive back door deal with both Google and Apple, that was likely only created because of how much antitrust pressure they were under. Times are changing, I wouldn't be surprised at all if Apple backs out of the deal over time.
- permo-w 2y agothey mean that you can pay for spotify without it being through the app store or play store, meaning that Apple and Google can't take a cut, meaning that it's cheaper. that's not some kind of deal, that's just how it works.
- scarface_74 2y agoThere was never a “back door deal”. Very few of the subscription streaming services allow in app purchases.
- fullshark 2y ago> Spotify pays out 80% of its money to its creators, Creators or rights holders? There's a huge difference.
- ganoushoreilly 2y agoWhile true, its regularly implied that the creators are being screwed by Spotify when in fact it would be between them and the rights holders and Spotify has nothing to do with that relationship / contract.
- vips7L 2y agoIsn't it the creators choice to sell their rights to a publisher? Is anyone holding a gun to their head?
- bearjaws 2y agoThe deal they made 8 years ago that gives the publisher all the rights is figuratively holding a gun to their head, yes.
- tgv 2y ago> Spotify pays out 80% of its money to its creators The article says "nearly 70%" in 2023. Like Apple. So they would get to keep $4.2B for themselves. That's quite a lot. It also matters that Spotify undercut other ways of distributing music, effectively reducing income for artists. > Meanwhile, TikTok ... Of course, there's always a worse one.
- efsavage 2y ago> effectively reducing income for artists. Does it though? Revenues are off their 90s peaks, but coming back[1], and keep in mind that in the 90s a _huge_ portion (~50%) of that went to the retail store and physical media manufacturing. [1] https://www.riaa.com/u-s-sales-database/ https://www.riaa.com/u-s-sales-database/ [2] https://en.wikipedia.org/wiki/Compact_disc https://en.wikipedia.org/wiki/Compact_disc
- jppope 2y agothank you for providing links and reminding everyone what the world was like before streaming
- ghaff 2y agoWell, it really wasn't that bad. People were more selective about what they listened to but the average person probably spent about what they do today on streaming. (Which also probably sets some ceiling on streaming prices and digital entertainment more broadly.)
- efsavage 2y agoI'm not sure selective is the right word, there were just far fewer choices. A typical record store would have O(thousands) of different titles, whereas spotify has over 100 million. Obviously much of that is trash, but it's still a huge difference. It's also worth noting that a big contributor to the 90s spike was people replacing tapes/records with CDs, which were a far superior medium for most usage. The decline after 2000 was not streaming, since that didn't exist, but the wind-down of the upgrade cycle and the rise of file sharing and 0.99 digital track purchases in lieu of $15-20 album purchases.
- skord 2y agoKids don't care about corporate ethics or artist respect, they care about where their friends are and where their playlists and memories live. Spotify is the soundtrack of their lives and my own kids love their sort of curated history of music. Moving their playlists isn't going to happen, asking them to switch to my Apple One subscription would be like asking them to rewrite their social identity. My own household would be in open revolt if I asked them to switch to anything else.
- ghaff 2y agoDo your kids pay for Spotify themselves? If I had a family Apple One subscription I wouldn't be very inclined to pay for an essentially redundant music streaming service.
- dleink 2y agoDisinclined, but I would like to publicly thank my parents for a CD Budget that was far too high for a teenager. I was probably averaging 1-3 CDs/month in the 90s, that's a ton of money!
- scarface_74 2y agoSo your kids run your household?
- dleink 2y agoWe're talking about a likely inconsequential amount of money for a thing that might be of high importance to a member of the household. What are you talking about?
- scarface_74 2y agoI’m talking about training kids early that life is about choices and budgeting so when they are grown and operating on a limited budget they aren’t paying for unnecessary subscriptions.
- basisword 2y ago>> Spotify pays out 80% of its money to its creators This pisses me off every time I see it. It makes Spotify look great and that's why they share it. It completely ignores the fact that they offer a free plan that a large percentage of their users enjoy. The important figure in my mind is the per stream rate and when I last checked Apple was paying double the rate Spotify does (because Spotify's per stream rate is dragged down due to its free users). Artists don't have a way to say to Spotify, only show my music to premium users and pay me a higher rate. It's one (of many) ways in which Spotify takes advantage of artists for its own gain. Another being their new policy to not pay artists who get less than 1000 streams on a track in a 12 month period. They just blanket decided they were going to keep that money for themselves.
- jppope 2y agoNot sure you remember where we were in 2012. We've come a long way from listeners not paying at all to $10B. The system is far from perfect but it is better than it was
- basisword 2y agoOf course, and streaming was always going to be the best solution. But unfortunately it's a market where there are a few big players and they can use that power in an abusive way. Spotify can do better. And puff pieces where they brag bout 'percentage of revenue' or speak in absolute numbers are bullshit and should be called out as such. I mean this should be criminal given their market power: > their new policy to not pay artists who get less than 1000 streams on a track in a 12 month period It may not be much to the individual artists (at most a few hundred $ a year in the extreme cases) but it's a nice chunk of change for Spotify to pocket.
- freetime2 2y agoSpotify doesn’t “pocket” the money. Here is their justification, which seems reasonable to me: > Tens of millions of them have been streamed between 1 and 1,000 times over the past year and, on average, those tracks generated $0.03 per month. > Because labels and distributors require a minimum amount to withdraw (usually $2-$50 per withdrawal), and banks charge a fee for the transaction (usually $1-$20 per withdrawal), this money often doesn't reach the uploaders. And these small payments are often forgotten about. > But in aggregate, these small disregarded payments have added up to $40 million per year, which could instead increase the payments to artists who are most dependent on streaming revenue. > Spotify will not make additional money under this model. There is no change to the size of the music royalty pool being paid out to rights holders from Spotify; we will simply use the tens of millions of dollars annually to increase the payments to all eligible tracks, rather than spreading it out into $0.03 payments. https://artists.spotify.com/en/blog/modernizing-our-royalty-system https://artists.spotify.com/en/blog/modernizing-our-royalty-...
- itsoktocry 2y ago>It's a shame What's special about Spotify in this situation? It's also a behemoth with at-least-somewhat-controversial standing in the music community. It's not like it's the little guy fighting the good fight. Personally, I think YouTube Music is better anyway.
- scarface_74 2y agoSpotify is getting “killed” because it was always a bad business to be in when your costs - payments to labels - scale linearly with your revenue. The exact opposite of a normal tech company that has high fixed costs and very low marginal costs. > Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments. Neither of them even directly report revenue from their services. This is not true. Spotify hasn’t allowed in app purchases of subscriptions in almost a decade.
- jsnell 2y ago> This is not true. Spotify hasn’t allowed in app purchases of subscriptions in almost a decade. That is not true either. Spotify's Android app allows purchasing Premium in-app, with Spotify as a payment provider. I believe it's also the case that Apple Music on Android has in-app purchases, with Apple as the payment provider.
- scarface_74 2y agoThat’s true for Android. And Google only takes a 4% cut when using Google payments and a 0% cut when using Spotify. But Spotify doesn’t pay Google 30% https://www.theverge.com/2023/11/20/23969690/google-spotify-android-billing-commission-secret-deal https://www.theverge.com/2023/11/20/23969690/google-spotify-... So that’s still not a cause for their financial issues.
- jsnell 2y ago> Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments. I think you mean just Apple there. Spotify on Android has in-app Premium subscriptions using Spotify as the payment provider (at the same price as Premium on the web).
- scarface_74 2y agoGoogle doesn’t pay Spotify anything when you do an in app purchase using Spotify’s payment system and charges 4% when you use Google’s payment system. So that’s not the cause of Spotify’s trouble either