9 ms·

Is Spotify the music industry’s friend or its foe?

31 points by eroo 12y ago

001sky 12y ago
"AM/FM radio pays the writer of the song on a per-play basis, but gives the performer and the owner of the recording of the song—generally, the record label—nothing. On digital streaming services like Spotify, the situation is nearly reversed: the owners of the recording get most of the performance royalty money, while the songwriters get only a fraction of it. Songwriters, who can’t go out on the road, are particularly hard hit by the loss of publishing royalties. As one music publisher put it, “Basically, the major music corporations sold out their publishing companies in order to save their record labels. Universal Music Publishing took a terrible rate from streaming services like Spotify in order to help Universal Records. Which, in the end, means that the songwriter gets screwed.”"
SloopJon 12y ago
I mostly listen to albums start to finish from my own largish collection (~90 GB when encoded as 192 Kbps AAC), so I can't really comment on the consumer experience. As for the artists, Taylor Swift's stance reminds me of Metallica and Garth Brooks. It kind of saddens me that they focus on this kind of nonsense, rather than the myriad ways the industry screws its own artists.
- baddox 12y ago
  I'm the same way. I consider the album to be the fundamental unit of musical expression (although there are obviously plenty of exceptions). The Spotify interface on iOS is absolutely unusable for this. There is no way to assemble a music library and browse it by artist and then album.
  - batiudrami 12y ago
    Google Play Music does this, and any music missing from their catalogue can be uploaded and is seamlessly integrated with their streaming music (a big deal - spotify just creates a folder of Local Files which don't even show up in searches). The only downsides are the web-only interface and the mobile app's excessive caching which seems to use at least double the data of Spotify.
  - Thlom 12y ago
    You can "save" both artists and albums in the iOS app.
  - Nullabillity 12y ago
    There has been since the latest UI update. On the desktop, every track or album has a "save" button that looks like a +, which will add it to your library, which can be sorted by either album or artist. On Android it's under the menu button for each track. I can't speak for iOS, though.
    - baddox 12y ago
      I tried it on iOS last week, and wasn't able to find any way to do it.
batiudrami 12y ago
I think the issue with Spotify is that artists compare revenue to CD sales, when they should be comparing it to piracy. I listen to (estimated) one new album every day, as part of about 5-10 hours of listening to music each day depending on my work schedule. $10-$20 an album is just not a price I'd be prepared to pay on a daily basis to listen to new music, and before Spotify I wasn't spending that money; I was pirating them or streaming them on websites without a revenue share model for labels. I still buy just as many CDs as I used to (probably about 10 a year), plus Spotify gets an additional $120 a year from me (70% of which goes to the music industry), which is a no brainer for me for the convenience of the service. In addition to the considerable sum ($2000+) which I spend annually on live music. The best solution I feel is a two-week exclusive on all new releases for physical and digital purchases before they hit subscription services. If you really want the CD, you can buy it, or you can wait two weeks until it's free on your $10 a month subscription. Sure, piracy will go up, but it is not the music industry's business to stamp out piracy, it is their business to maximise music revenue. This, along with the increased value-adds of physical purchases - deluxe vinyl editions, signed editions, additional goodies - the "Kickstarter" pricing model, if you will - is how the music industry will continue to make money. That and increased ticket prices for live music, and I anticipate most record deals includng a cut of live revenues for major labels in the future (if they aren't already). For the record, I do not think major labels are inherently bad for music - if you cannot afford to record and promote your album, a major label can do it for you, at the cost of a large chunk of your profits if you're a hit, but not leaving you in the red if you aren't - a major part of record label's profitable artists must cover all the ones who are not also. If you don't want to do such a profit split, the option is always there to finance the record yourself and pay labels up front for distribution and marketing.
- forrestthewoods 12y ago
  My only issue with Spotify is that it tricks listeners into thinking they're supporting artists when they so totally aren't. I equate Spotify to piracy. Yeah I give them $10 a month but so little reaches artists I might as well have stolen the music. And I'm fine with that. If people want to support an artist then they should buy their album, go to liveshows, whatever. As long as we don't incorrectly assume that Spotify is supporting the artists we enjoy then everything is fine.
jon2512chua 12y ago
Am I the only one who's wondering why we're reading an article that is supposed to be published/had been published 7 days from now?
- batiudrami 12y ago
  It's from the physical issue. The publication date on magazines is usually between one week and one month behind the actual release date. I'm not really sure why, but most magazines do this.
  - jon2512chua 12y ago
    That's interesting to know. Thanks.
  - pgeorgi 12y ago
    That happened because every publication wanted to have an edge over the others. So some monthly mags started sending their february issue to the stores in january 28th, and the others looked "late", being the one "01" issue in a see of "02"s, scheduling future issues a bit earlier to retaliate. Now they're all nearly a month early. Similar for weekly publications.
rakel_rakel 12y ago
I think the title of this article hints of a great misconception of what Spotify is. They (as well as other digital music providers streaming or not) are part of the music industry now. The olgopoly has changed, get over it.
radicalbyte 12y ago
The closest thing to Spotify is Radio. With that in mind, 500k "listens" is a drop in the ocean. Radio 1 has shows which attract 5 million listeners a WEEK [1]. [1] http://www.bbc.com/news/entertainment-arts-24650892 http://www.bbc.com/news/entertainment-arts-24650892
waterlesscloud 12y ago
I wonder how much research Spotify has done with their pricing. I assume they must have done at least some. But they could double the monthly fee and I wouldn't blink. Disclaimer- I am an outlier in terms of music consumption.
- iagooar 12y ago
  Well, I would blink. I use Spotify only for discovering music. Once I like an album, I get it physically or on iTunes. I think they could tie it to hours / month. A cheap, limited account for people like me, and an unlimited one for hardcore consumers.
  - waterlesscloud 12y ago
    Sorry you're downvoted. Your response is totally legit.
NicoJuicy 12y ago
I think we haven't seen what Spotify will do. You can't run pirated music in public. Integration with Spotify and Uber is super smart, there's no competition for that (not from pirated music anyway) -> extra revenue, extra attention to the service Increase the monthly price to 25$ / month for streaming in public... (eg. a doctor's waiting office, ...) -> extra revenue.
- Nullabillity 12y ago
  This is already a thing, see Spotify Business.[1] [1]: https://www.soundtrackyourbrand.com/business https://www.soundtrackyourbrand.com/business
bcassedy 12y ago
I pirated music when I was younger, I used Pandora for a while, for a while I only listened to podcasts, and I rarely listen to music and yet I'm a happy Spotify subscriber. They've made the experience so easy that I'd happily pay double the price for the maybe 4 hours a week I listen.
awjr 12y ago
I'm really unfamiliar with Spotify's reimbursement model. Is it based on the flattr model? Your $7 being split between the artists you listen to?
facepalm 12y ago
It seems to me in theory it should be possible to make the economics work. I suspect few people would buy more than one new CD per month, so if the monthly fee is roughly equal to the price of a CD, the money flow could remain kind of the same. Maybe so far the industry depends on whales (people buying a LOT of music all the time), on the other hand subscription services might also make money from people who would otherwise have spent less. Being free, people might listen to more music on Spotify than they would have listened to otherwise. But that only means the money could be distributed more evenly. Maybe I don't listen to Lana Del Rey 150 times, but overall I will listen to 150 songs, so those 0.99$ will still flow into the system and be distributed.
- furyg3 12y ago
  I used to buy a CD or two every month. Then I started pirating all of my music (mostly out of convenience). Then pay-per-download options came along (iTunes), and I used that a bit, but it was still inferior to pirating. Then services like Spotify came along and I'm paying for most of my music again. In total I'm paying less for music than I was paying back when I was buying CDs. But I'm paying more than I was when I was stealing. And in the process we've gotten rid of stamping and distributing CDs, running stores, etc. If record labels can't make money now, their whole business model is screwed. I suspect that the real problem is competition, though, and not profit-per-song.
danols 12y ago
They have a superior music listening & discovering functionality to any other competitor by a mile. Is there really anything else needed? I can't see how such a superior product can fail. But it just seems there are so many people in the music industry that are living in the past and are slowing down the pace instead of everyone going all in on it. If Spotify had 10x their subscribers no one would question the model. The problem is that it takes too long time to get to those numbers due to all the friction.
- __david__ 12y ago
  > They have a superior music listening & discovering functionality to any other competitor by a mile. How is their discovery any better than anyone else's? And how is the player better than anyone else's? I like Spotify, but the only perk I see is that I can play any song without directly paying for it.... What am I missing?
  - jug 12y ago
    Yeah, hmm, as for me those advantages are intertwined. To get anywhere close to great music discovery, I need to be able to easily listen to everything I can discover in the first place.
experimental- 12y ago
The Apple reference sound less like a business plan, and more like typical hype of Apple exceptionalism. Apple makes the top dollar by selling devices with a nice profit margin. Would they really want to add several hundred dollars to their price, thus cannibalizing their sales – just to donate most of that to record labels? (No!) Yes, they would get their cut, but most of it would be away from iTunes revenue. (Not all Apple buyers use Spotify or similar services – and if Apple could raise their retail price without diminishing their sales, they would.) And if they made the inclusion (of music) optional, why would record labels settle for much less than what Spotify pays? For no reason, and they wouldn't.

31 points by eroo 12y ago

"AM/FM radio pays the writer of the song on a per-play basis, but gives the performer and the owner of the recording of the song—generally, the record label—nothing. On digital streaming services like Spotify, the situation is nearly reversed: the owners of the recording get most of the performance royalty money, while the songwriters get only a fraction of it. Songwriters, who can’t go out on the road, are particularly hard hit by the loss of publishing royalties. As one music publisher put it, “Basically, the major music corporations sold out their publishing companies in order to save their record labels. Universal Music Publishing took a terrible rate from streaming services like Spotify in order to help Universal Records. Which, in the end, means that the songwriter gets screwed.”"

SloopJon 12y ago

I mostly listen to albums start to finish from my own largish collection (~90 GB when encoded as 192 Kbps AAC), so I can't really comment on the consumer experience. As for the artists, Taylor Swift's stance reminds me of Metallica and Garth Brooks. It kind of saddens me that they focus on this kind of nonsense, rather than the myriad ways the industry screws its own artists.

baddox 12y ago
I'm the same way. I consider the album to be the fundamental unit of musical expression (although there are obviously plenty of exceptions). The Spotify interface on iOS is absolutely unusable for this. There is no way to assemble a music library and browse it by artist and then album.
- batiudrami 12y ago
  Google Play Music does this, and any music missing from their catalogue can be uploaded and is seamlessly integrated with their streaming music (a big deal - spotify just creates a folder of Local Files which don't even show up in searches). The only downsides are the web-only interface and the mobile app's excessive caching which seems to use at least double the data of Spotify.
- Thlom 12y ago
  You can "save" both artists and albums in the iOS app.
- Nullabillity 12y ago
  There has been since the latest UI update. On the desktop, every track or album has a "save" button that looks like a +, which will add it to your library, which can be sorted by either album or artist. On Android it's under the menu button for each track. I can't speak for iOS, though.
  - baddox 12y ago
    I tried it on iOS last week, and wasn't able to find any way to do it.

batiudrami 12y ago

I think the issue with Spotify is that artists compare revenue to CD sales, when they should be comparing it to piracy. I listen to (estimated) one new album every day, as part of about 5-10 hours of listening to music each day depending on my work schedule. $10-$20 an album is just not a price I'd be prepared to pay on a daily basis to listen to new music, and before Spotify I wasn't spending that money; I was pirating them or streaming them on websites without a revenue share model for labels. I still buy just as many CDs as I used to (probably about 10 a year), plus Spotify gets an additional $120 a year from me (70% of which goes to the music industry), which is a no brainer for me for the convenience of the service. In addition to the considerable sum ($2000+) which I spend annually on live music. The best solution I feel is a two-week exclusive on all new releases for physical and digital purchases before they hit subscription services. If you really want the CD, you can buy it, or you can wait two weeks until it's free on your $10 a month subscription. Sure, piracy will go up, but it is not the music industry's business to stamp out piracy, it is their business to maximise music revenue. This, along with the increased value-adds of physical purchases - deluxe vinyl editions, signed editions, additional goodies - the "Kickstarter" pricing model, if you will - is how the music industry will continue to make money. That and increased ticket prices for live music, and I anticipate most record deals includng a cut of live revenues for major labels in the future (if they aren't already). For the record, I do not think major labels are inherently bad for music - if you cannot afford to record and promote your album, a major label can do it for you, at the cost of a large chunk of your profits if you're a hit, but not leaving you in the red if you aren't - a major part of record label's profitable artists must cover all the ones who are not also. If you don't want to do such a profit split, the option is always there to finance the record yourself and pay labels up front for distribution and marketing.

forrestthewoods 12y ago
My only issue with Spotify is that it tricks listeners into thinking they're supporting artists when they so totally aren't. I equate Spotify to piracy. Yeah I give them $10 a month but so little reaches artists I might as well have stolen the music. And I'm fine with that. If people want to support an artist then they should buy their album, go to liveshows, whatever. As long as we don't incorrectly assume that Spotify is supporting the artists we enjoy then everything is fine.

jon2512chua 12y ago

Am I the only one who's wondering why we're reading an article that is supposed to be published/had been published 7 days from now?

batiudrami 12y ago
It's from the physical issue. The publication date on magazines is usually between one week and one month behind the actual release date. I'm not really sure why, but most magazines do this.
- jon2512chua 12y ago
  That's interesting to know. Thanks.
- pgeorgi 12y ago
  That happened because every publication wanted to have an edge over the others. So some monthly mags started sending their february issue to the stores in january 28th, and the others looked "late", being the one "01" issue in a see of "02"s, scheduling future issues a bit earlier to retaliate. Now they're all nearly a month early. Similar for weekly publications.

rakel_rakel 12y ago

I think the title of this article hints of a great misconception of what Spotify is. They (as well as other digital music providers streaming or not) are part of the music industry now. The olgopoly has changed, get over it.

radicalbyte 12y ago

The closest thing to Spotify is Radio. With that in mind, 500k "listens" is a drop in the ocean. Radio 1 has shows which attract 5 million listeners a WEEK [1]. [1] http://www.bbc.com/news/entertainment-arts-24650892 http://www.bbc.com/news/entertainment-arts-24650892

waterlesscloud 12y ago

I wonder how much research Spotify has done with their pricing. I assume they must have done at least some. But they could double the monthly fee and I wouldn't blink. Disclaimer- I am an outlier in terms of music consumption.

iagooar 12y ago
Well, I would blink. I use Spotify only for discovering music. Once I like an album, I get it physically or on iTunes. I think they could tie it to hours / month. A cheap, limited account for people like me, and an unlimited one for hardcore consumers.
- waterlesscloud 12y ago
  Sorry you're downvoted. Your response is totally legit.

NicoJuicy 12y ago

I think we haven't seen what Spotify will do. You can't run pirated music in public. Integration with Spotify and Uber is super smart, there's no competition for that (not from pirated music anyway) -> extra revenue, extra attention to the service Increase the monthly price to 25$ / month for streaming in public... (eg. a doctor's waiting office, ...) -> extra revenue.

Nullabillity 12y ago
This is already a thing, see Spotify Business.[1] [1]: https://www.soundtrackyourbrand.com/business https://www.soundtrackyourbrand.com/business

bcassedy 12y ago

I pirated music when I was younger, I used Pandora for a while, for a while I only listened to podcasts, and I rarely listen to music and yet I'm a happy Spotify subscriber. They've made the experience so easy that I'd happily pay double the price for the maybe 4 hours a week I listen.

awjr 12y ago

I'm really unfamiliar with Spotify's reimbursement model. Is it based on the flattr model? Your $7 being split between the artists you listen to?

facepalm 12y ago

It seems to me in theory it should be possible to make the economics work. I suspect few people would buy more than one new CD per month, so if the monthly fee is roughly equal to the price of a CD, the money flow could remain kind of the same. Maybe so far the industry depends on whales (people buying a LOT of music all the time), on the other hand subscription services might also make money from people who would otherwise have spent less. Being free, people might listen to more music on Spotify than they would have listened to otherwise. But that only means the money could be distributed more evenly. Maybe I don't listen to Lana Del Rey 150 times, but overall I will listen to 150 songs, so those 0.99$ will still flow into the system and be distributed.

furyg3 12y ago
I used to buy a CD or two every month. Then I started pirating all of my music (mostly out of convenience). Then pay-per-download options came along (iTunes), and I used that a bit, but it was still inferior to pirating. Then services like Spotify came along and I'm paying for most of my music again. In total I'm paying less for music than I was paying back when I was buying CDs. But I'm paying more than I was when I was stealing. And in the process we've gotten rid of stamping and distributing CDs, running stores, etc. If record labels can't make money now, their whole business model is screwed. I suspect that the real problem is competition, though, and not profit-per-song.

danols 12y ago

They have a superior music listening & discovering functionality to any other competitor by a mile. Is there really anything else needed? I can't see how such a superior product can fail. But it just seems there are so many people in the music industry that are living in the past and are slowing down the pace instead of everyone going all in on it. If Spotify had 10x their subscribers no one would question the model. The problem is that it takes too long time to get to those numbers due to all the friction.

__david__ 12y ago
> They have a superior music listening & discovering functionality to any other competitor by a mile. How is their discovery any better than anyone else's? And how is the player better than anyone else's? I like Spotify, but the only perk I see is that I can play any song without directly paying for it.... What am I missing?
- jug 12y ago
  Yeah, hmm, as for me those advantages are intertwined. To get anywhere close to great music discovery, I need to be able to easily listen to everything I can discover in the first place.

experimental- 12y ago

The Apple reference sound less like a business plan, and more like typical hype of Apple exceptionalism. Apple makes the top dollar by selling devices with a nice profit margin. Would they really want to add several hundred dollars to their price, thus cannibalizing their sales – just to donate most of that to record labels? (No!) Yes, they would get their cut, but most of it would be away from iTunes revenue. (Not all Apple buyers use Spotify or similar services – and if Apple could raise their retail price without diminishing their sales, they would.) And if they made the inclusion (of music) optional, why would record labels settle for much less than what Spotify pays? For no reason, and they wouldn't.