5 ms·

Yeah, that was my initial thought. A single play on radio in a big market could easily reach well over 32,000 people. The revenue model for streaming seems to

by pyoung 14y ago

Yeah, that was my initial thought. A single play on radio in a big market could easily reach well over 32,000 people. The revenue model for streaming seems to be based on the payout systems that are used for radio. Unfortunately for artists, streaming services like Pandora and Spotify tend to compete against their iTunes and album sales, at least much more so than radio ever did. (in fact radio airtime was mostly considered to be promotional back in the day, very few artists made money from it, and there were a number of scandals were labels payed radio stations to play their music).

jessevondoom 14y ago
Revenue models are all actually different, and kind of messy. In the US, radio pays out royalties for publishing but not for performance/mechanical. That means the rightsholder for publishing gets paid, but not the performer of the piece. (Aretha Franklin gets nothing from radio plays.) It's an antiquated law based on the idea that radio is doing promotional work for the artist (most other countries pay both.) Pandora pays a compulsory streaming rate. Similar to radio they're allowed to play what they like as long as it's not on-demand. Hence you can only skip so many times, and you can't request a specific song. They pay both publishing and performance royalties so rightsholders for the publishing and recording get paid. Spotify, as an on-demand streaming service, has to negotiate direct deals with rightsholders to use the music. So when you see them paying out a lower rate than Pandora it's because they've traded equity to major labels in exchange for better rates — a very clever way for majors to get money directly from subscribers without needing to distribute it to artists. Independent labels and musicians also need to authorize Spotify, but have less negotiating power so they don't get ownership stakes and have to choose to be completely absent from the system or take the rate offered them.

by pyoung 14y ago

jessevondoom 14y ago

Revenue models are all actually different, and kind of messy. In the US, radio pays out royalties for publishing but not for performance/mechanical. That means the rightsholder for publishing gets paid, but not the performer of the piece. (Aretha Franklin gets nothing from radio plays.) It's an antiquated law based on the idea that radio is doing promotional work for the artist (most other countries pay both.) Pandora pays a compulsory streaming rate. Similar to radio they're allowed to play what they like as long as it's not on-demand. Hence you can only skip so many times, and you can't request a specific song. They pay both publishing and performance royalties so rightsholders for the publishing and recording get paid. Spotify, as an on-demand streaming service, has to negotiate direct deals with rightsholders to use the music. So when you see them paying out a lower rate than Pandora it's because they've traded equity to major labels in exchange for better rates — a very clever way for majors to get money directly from subscribers without needing to distribute it to artists. Independent labels and musicians also need to authorize Spotify, but have less negotiating power so they don't get ownership stakes and have to choose to be completely absent from the system or take the rate offered them.