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Why Spotify Pays So Little

• kfor 12y ago
  Vulfpeck is also the band behind Sleepify[1], the album of ten silent 30s songs which fans looped on Spotify while they slept. Vulfpeck earned $20k as a result and used it to organize a tour. [1] http://en.wikipedia.org/wiki/Sleepify http://en.wikipedia.org/wiki/Sleepify
  • mod 12y ago
    Wouldn't you have had to (if a free user) listen to commercials during this? Wouldn't that sort-of defeat the purpose of the silence? May as well ask people to play some more normal 30s songs and turn off their speakers, avoid being delisted as a non-album.
    • latortuga 12y ago
      Spotify premium eliminates all ads, both visual and audio.
    • kfor 12y ago
      Agreed that having fans play your music on mute would be just as - if not more - effective, and would work without creating a prime target for banning. But I think in this case it made for a very effective "statement", even if it could've been a more efficient hack.
      • djloche 12y ago
        At least for the desktop software, they detect if you turn the volume down quickly, and pause the commercial. Spotify has pretty rude behavior towards their free users, but I suppose they want to push everyone to subscribe.
        • kfor 12y ago
          I don't use Spotify so I was unaware of that - really interesting (and clever/dastardly).
        • mod 12y ago
          I use the (I think still considered "beta" or something) Linux desktop version and it does not know when I turn the volume down. When commercials come on, I quickly mute the machine, and I get a nice popup with the next song title to let me know commercials are done. It's nice because I find radio commercials particularly obnoxious--far more than television--and spotify will sometimes play them back to back. Speaking of which: their radio algorithm must be broken. I can select an entire genre--say classical music--and start getting repeats within a couple of hours.
          • mrottenkolber 12y ago
            They just don't have much music. I tried spotify as a youtube substitute a few months back (at a friends house). Turns out they don't have a single song I searched for (all available on youtube, well known genre classics).
            • mod 12y ago
              I don't have this problem in the genres I listen to--they have only not had a couple of songs from pretty obscure groups. Even when I create a station by artist, say The Avett Brothers (considered folk music, I believe), I end up getting repeats quickly--even among the non-Avett artists playing on the station. My own personal folk playlist (on spotify) has more variety than their own station. I'm convinced it's an algorithm issue in my case. In yours, possibly lack of choices.
            • tragic 12y ago
              It really depends, probably on the labels concerned. My own short, happy, musical career is documented in full - that is, eight tracks on obscuro progressive house labels from 2008-2011. Nobody will ever want to listen to them, except me. (I never saw a cent, but since they're all diplomatically categorised as '< 1000 streams', that would add up to one laughable payday: and besides, I never saw a cent from the labels either.) I know a lot of older house/trance etc tracks, including genre classics, are stuck in licensing hell after the labels folded, and I would expect that to be the more true the further back in musical history you go. If I get back into things, I'll probably just give the MP3s away. There's no money in music, and I earn a living elsewise.
  • ssharp 12y ago
    Artsits used to put together similar listening schemes on MP3.com. The money was much better back then, from what I remember.
  • sahara 12y ago
    Vulfpeck is also also the band behind four really terrific EPs in as many years, and you should absolutely give them a listen[1], although ideally not on Spotify. [1] http://vulf.bandcamp.com/ http://vulf.bandcamp.com/
  • matthiasv 12y ago
    Vulfpeck is also the hottest funk band that currently rocks this planet. But as it seems, I should rather purchase their albums from Bandcamp than streaming them via Spotify.
    • rlonstein 12y ago
      Listened on youtube, bought on Bandcamp. You're right, they are good. Thanks for the suggestion.
  • cozuya 12y ago
    In an alternate universe, Sleepify and Spotify are Browserify plug-ins.
  • deleted 12y ago
    [deleted]
  • wcummings 12y ago
    Spotify commented at the time, comparing Vulfpeck to John Cage. Made me giggle. Vulfpeck is great, I saw them live in NYC a few years ago
• nicpottier 12y ago
  Is the description of Spotify's model to pay artists accurate? It sounds suspiciously simple, free of any special deals with labels to get artists on board etc... (which I had just assumed was a necessary evil) And do total stream divisions take into account only premium accounts? Or do they also include free ones? Because ya, as a premium user, I really do want (and perhaps naively expected) my $9/mo split between the artists I listen to, which certainly seems the fairest.
  • cwyers 12y ago
    Money to pay the artists listened to by free users needs to come from somewhere. I don't think artists and rightsholders are willing to accept a lower per-play revenue from free users. Which means I doubt that the ad revenue is enough to support the free accounts without subsidy from paid users. (The ad revenue isn't nothing, and the ads helps encourage conversion to paid user, so they're not without value to Spotify, but I suspect actual paying customers are worth more than free users even though they stream more.) So if you take these two assumptions: * A stream from a free user pays the same as a stream from a paid user, and * Paid users bring in more than free users I don't think Vulf's idea works.
    • Guvante 12y ago
      You could merge the two ideas to meet in the middle. 35% based on total revenue and 35% based on used revenue.
      • cwyers 12y ago
        You could, I guess. Why would you want to, if you're Spotify? It's more bookkeeping for no benefit to them. The author believes he's getting hosed because gyms and nail salons are playing Spotify all day over their PAs, but... I'm not sure that's true, and even if they are, those are still plays Spotify has to pay for.
    • jstelly 12y ago
      People make tools to game usage-based rewards in free to play games. They call it "idling". You could hack this by making an idling tool for spotify that would re-stream your tracks when you weren't using spotify.
• cordite 12y ago
  I thought this (what is proposed) is how they already do it. I guess not. It does seem more fair for the artist this way, though it probably means they need to do more crunching with map reduce or something.
• tpeaton 12y ago
  Spotify has been villified since the beginning, and I certainly want a more fair system to exist for artists. That said, has there EVER been a business model in the US that was profitable for artists? I don't think there was ever money in music for artists from album sales. The cost of distributing and promoting music is just more expensive than making an album.
  • afarrell 12y ago
    Is it actually the case that signing record contracts was always a bad deal for artists? I was under the impression that they reduced risk for artists who could then use money from the contract as a more stable source of income to pay for, say, childcare expenses.
    • tptacek 12y ago
      That is my understanding as well; in particular, a lot of popular mythologies about artists "recouping" and being stiffed on royalties seem to be just that: mythological. Here's a good post: https://news.ycombinator.com/item?id=3850935 https://news.ycombinator.com/item?id=3850935
      • 6stringmerc 12y ago
        Actually, it's not a myth; see the above link to what Steve Albini wrote if you'd like to get more educated and enhance your understanding of a very calculating and explotative business model.
        • tptacek 12y ago
          Serious question: how much do you actually know about Steve Albini? Are you a Big Black fan? Are you at all acquainted with the Chicago punk scene he's from? Have you read anything else he's written, for instance about any band not from that scene? Or, for that matter, any of the story of his business relationship with the labels? And you know how he makes his money, right? (hint: not by touring Shellac). (I am an unabashed and somewhat obsessive Albini fan). I think at this point you can safely assume that anyone writing an opinion about the music industry has read that old Albini zine post. If you'd read Lowery's post, I think you'd see that he in several ways rebuts it.
• malloreon 12y ago
  If someone started a service that did exactly this, would artists take their music off spotify and onto this new service? Would the users follow?
  • BinaryIdiot 12y ago
    I had always thought it was the record labels who would essentially prevent this from happening as they're essentially getting cut. Unless I'm misunderstanding something. It would certainly be interesting to see a new streaming service with a different type of payment structure for artists.
  • protomyth 12y ago
    I have no idea and that is a really good question. So, let's round and say $7.00 a month goes to artists[1]. What is an expected percentage of time fans will listen to the artist's music (25%?) and how many thousand fans does the artist have? I would imagine Taylor Swift with Blank Space might have cleaned up. Is there a source of public data on this? 1) as in all the people who get paid off the artist's music including, hopefully, the artist
• Throwaway1224 12y ago
  Was Van Gogh one to challenge the system for a buck? Did Kafka put pen to paper for his love of money?
• Tarang 12y ago
  I think it depends on who the artist is. For the most popular the artists wouldn't be complaining about being paid too little. Either way if a formula change, distributing earnings based on an individual user instead of the whole pool, means the popular songs would earn far less. It also means if someone listens to one song that would earn more than someone who loves music and pays the same thing! I would argue the formula isn't wrong its difficult comparing an total Audio CD sales vs a lifetime NPV of music played on Spotify for an author.
  • ssharp 12y ago
    > For the most popular the artists wouldn't be complaining about being paid too little. Taylor Swift did just that recently and pulled her music from Spotify because she didn't feel she was fairly compensated.
• patmcc 12y ago
  Why are light listeners like the example paying for Spotify? Shouldn't they just stick to the free version rather than going for premium? Following this suggested model, free users listening wouldn't help the artists at all - is that really desirable?
  • thomasahle 12y ago
    For free users the money divided would be the ad money.
  • jaynos 12y ago
    To answer your first question, mobile usability is limited with the free version (e.g. can only shuffle play, can't play straight through an album). Should they stick to the free version? That's a value proposition that can only be answered by the user. >Following this suggested model, free users listening wouldn't help the artists at all - is that really desirable? I doubt it. Paid users are usually free users first. No free users means fewer paid users down the line.
  • genericuser 12y ago
    Different people value the features of premium differently, no different than the market for any other good or service. For instance, it is probably true that to some people $5 dollars a month is nothing compared to the torture of listening to a single ad ever.
  • tracker1 12y ago
    I can't speak for Spotify, but can for Pandora... I listen maybe 20 hours a month, and just got sick of the ads... That's all there was to it. I don't want to curate my music more than a like/dislike and it works for me. That said, I don't like the model that's currently in use for online-only music stations... it's tough all around.
  • hussong 12y ago
    I'm a paying light listener. I coudn't stand the ads and the audio quality on the freebie, plus I need the offline music feature when I'm travelling or commuting.
• Sevzinn 12y ago
  At least for google play music, it will pop up a window if you don't interact with the web page for a few hours.
• higherpurpose 12y ago
  Spotify should create app store-like programs, where artists can choose to "self-publish" and get 70 percent of the revenue. If they are already doing that, then maybe they should promote it more, because I'm not hearing about too many artists joining such a program. Most still use Spotify through labels.
• thomasahle 12y ago
  > Terry is below average. In 2014 he averaged 350 streams per month. If his subscription money only went to artists he listened to, it would’ve been $0.02 per stream. > Instead it was $0.00786. This sounds like a much better way to do it. The artists should ask Spotify to change it. However I guess the big players don't really want it changed.
  • deleted 12y ago
    [deleted]
  • Flimm 12y ago
    Some small players might not either. It might be working in some small players' favour that less active users are subsidising active users.
  • TheHypnotist 12y ago
    I wonder what the average is? Because that per stream rate obviously changes depending on how many streams you listen to. 350 sounds rather small. I listen at work, in the car, sometimes I listen to comedy. I might double that number in which case the difference becomes more and more negligible until I get to the point where I'm paying less per stream then what spotify currently pays. I can see this getting extremely complex.
• ebbv 12y ago
  Radio never paid much for users either. The problem is nobody buys albums any more. I think that's because buying a digital album has so far been really unrewarding. Artists need to come up with a package for their music that people actually want to buy.
  • hussong 12y ago
    As a start, correct ID3 tags and an album cover bigger than the size of a thumbnail would be great. Bonus points for configurable folder and file naming scheme and playlists generation upon download. I always felt kinda stupid paying 10 Euros for an album, then spending 10 minutes fixing metadata and downloading a halfway decent cover image from discogs. You'd get better data quality from filesharing sources, since fans obviously care more about releases than labels. Same goes for movie releases btw.
• pjc50 12y ago
  I'm not clear on what the difference would be, from his explanation. Is he splitting by "artists listened to ignoring count of times streamed"? (So someone who listens to only vulfpeck 1000 times and Daft Punk once pays each $5) Or is it "for each user, divide their $10 by the number of streams they played and pay that to the copyright holder of the streams played?" So the more streams you listen to the less artists get paid for that?
  • rodly 12y ago
    > Or is it "for each user, divide their $10 by the number of streams they played and pay that to the copyright holder of the streams played?" So the more streams you listen to the less artists get paid for that? I think his solution works like this: Lets say you listen to Beck for 50 times, Beyonce 50 times, and Drake 100 times. That gives you 200 total streams, which a respective stream distribution of 25%, 25% and 50%. We can assume you enjoyed Drake more since you listened to him more so he should get more money obviously. So Beck and Beyonce each get $7 * (0.25) = $1.75 and Drake gets $3.50 for the month.
• mortenjorck 12y ago
  Like others in this thread, I naively assumed this was how Spotify already worked, and wondered why the payouts tended to be so low. Now it makes sense, and puts the numbers here (http://www.spotifyartists.com/spotify-explained/ http://www.spotifyartists.com/spotify-explained/) in context. Realistically, it would be both hard to change structurally and a hard sell for major labels to give up what is effectively a subsidy of popular music by indie fans. Let’s take the author’s thought experiment to its logical extreme: Imagine “Terry” listened to just one obscure band for the entire month of February. $7 of his $10 subscription fee is going to artists, but let’s say he’s also the only fan of that band on Spotify. So that band has effectively zero percent of Spotify’s plays for the month, meaning that the band gets effectively zero percent of Spotify’s monthly revenue. Terry thinks $7 went to his favorite band, but it actually got divided up among February’s top 40, with only a fraction of a fraction of a cent going to the band!
  • pjc50 12y ago
    But there's an impedance mismatch here. The copyright holders are being paid per-play but the users are paying all-you-can-eat. That's always going to be an imbalance. The only way to "fix" that would be to charge "Terry" a cent per listen like a jukebox. This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.
    • mortenjorck 12y ago
      That’s not how Spotify works, though. According to the link above: Every time somebody listens to a song on Spotify it generates payments, but Spotify does not calculate royalties based upon a fixed “per play” rate. Unless there are some secret deals being struck for fixed per-stream royalties that Spotify isn’t admitting to publicly, every rightsholder gets a percentage of monthly revenue. Which sounds fair, until you consider long-tail producers and consumers, for whom the marketplace is distorted by this model. Your buffet analogy isn’t really apt here because streams aren’t limited resources, and they all have the same effective wholesale cost to Spotify (again, assuming no secret deals).
• gcb0 12y ago
  anecdote time: recently i my closest friends happen to be all musicians. I often try to get their opinion on piracy and online radios while selfishly trying to see a product idea... and their general opinion on online radios is that spotify is the god among them and that i'm evil and killing their industry for using pandora.
• kfor 12y ago
  Site appears to be buckling under the load, here's the Google cache: http://webcache.googleusercontent.com/search?q=cache:JiivGj-Vg10J:lit.vulf.de/spotify-so-little/+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:JiivGj-...
• B4CKlash 12y ago
  Licensed Use of Master — $0.00668 I can imagine this licensing fee differs largely and contributes heavily to Vulfpeck's anecdote.
• mbesto 12y ago
  Two things: 1) I think Ek is right - there isn't much money in the consumption of music. I do believe music is extremely effective at getting people's attention, but outside of that, it's value is much lower than we currently give it credit for. 2) I'm reminded of the TED Talk by Clay Shirky on institutions vs collaboration[0] where he explains power law distribution (watch from 6:01 onward specifically) with regard to photos of Iraq on Flickr. He says (paraphrased) "that figure at the bottom at 10 photos per photographer is a lie. it doesn't matter...the top 10% of the most prolific photographers account for almost 75% of the photos. 80% of the contributors are below the average amount of contributions" This is Spotify in a nutshell. People wan't access to all of the rap music in the world even if they are only going to actually consume 20% of it, so that in the rare chance they listen to one song of the other 80% that it's still made available. In other words, the overall utility of Spotify's system is only valid when it's whole, but the individuals who are necessary for it to be whole are unevenly distributed (in this case number of plays). So the argument then becomes who needs who more? [0] - https://www.youtube.com/watch?v=sPQViNNOAkw&t=361 https://www.youtube.com/watch?v=sPQViNNOAkw&t=361
  • tim333 12y ago
    > there isn't much money in the consumption of music Depends how you consume it. I had to pay nearly £100 to see the Stones live. Online of course you can download it for nothing.
• baristaGeek 12y ago
  It's incredible that there's no money in a thing that has been a need for the human being for centuries. Actually entertainment in general, has been a need since the origin of our species. The indie music industry as a whole is already selling more than the 3 major record labels together in the US. Once that 20th century model is 100% over, we will see technology doing really cool things in collaboration with music.
  • beat 12y ago
    Technology collaborations are limited to a very narrow subset of music. As an often acoustic/folk musician, I expect collaboration to be a same-space realtime thing. Classical, jazz, and most rock musicians have the same limitations. You need very high bandwidth communication - subtle visual cues as well as audio cues.
• Flimm 12y ago
  Jack Stratton is correct in pointing out that less active users are subsidising active users. However, he then makes the leap that that means that less popular artists are subsidising the popular ones, which has yet to be proved.
  • nharada 12y ago
    I suspect that the paying users are more likely to listen to more obscure indie artists, simply based on the people I know who pay for premium. Anyone interested in listening to only top 40 likely won't see the value in paying $9.99 a month for it. Thus the less popular artists are bringing in the revenue but the big artists keep more money. That being said, there's no proof of this without data to back it up.
    • oliwary 12y ago
      Do artists get payouts from free listeners as well?
    • maurits 12y ago
      If I were to speculate, I would expect the number of times a song is played most likely to adhere to a power law and therefor this average number of streams is not an ideal measure. And yes, I'd would expect the tail to be fragmented. Lots of people listening to but a small and mutual exclusive set of bands. Next to the odd main stream one. So perhaps it is not really a question of light users sponsoring heavy ones, but more the banality of average taste. Would love to see some stats.
• genericuser 12y ago
  His proposition may sound simple to him, but it really isn't. It becomes very hard to ensure you are being paid properly in his proposed scenario, I would personally expect it would create even more controversy, or extremely long payment records every month for artists. For instance say we have 500 paid users. Lets call them user1 through user500. Each user listens to the same number of songs a month as the value following the word user in their name. Then we have 500 different rates at which artists are paid for their song playing ranging from the entire monthly fee to 1/500th the monthly fee. Therefore providing a full accounting of each of those rates would be necessary for an artist to understand why they got paid more the month they had a single play than the month they had 400 plays. To be fair assuming the minimum song length on Spotify is 30 seconds this record provided to artists would have a max length of (31 * 24 * 60 * 2)+1 = 89281 items for premium users plus items for add supported users if they did not overlap exactly in rate. Assuming all Premium users paid the same rate, which is not the case. Edit: I ignored the 0 listen use case, as well as spotify's 30% cut to simplify an already complicated 'simple proposal'. I also forgot to account for daylight savings time in which a day can have 25 hours.
  • ianlevesque 12y ago
    The royalty reporting is this complex already anyway. It's really crazy.
    • genericuser 12y ago
      Please provide an example. As the examples I have seen of artists showing their Spotify payments do not support this assertion. Here is a link to one such example I have seen which has each song paid at the same amount per play. This has made the number of items on the payment record to simply be the number of different songs which were played by that artist. http://www.digitalmusicnews.com/wp-content/uploads/2015/02/BMIstatement2.jpg http://www.digitalmusicnews.com/wp-content/uploads/2015/02/B...
      • ianlevesque 12y ago
        That is a statement sent to the artist but broadcasters report far more detail to SoundExchange and licensing agencies.
• diminoten 12y ago
  Does anyone have any information on how Google Music does it? I love Google Music, and don't understand why everyone's so hopped up on Spotify, just because they were "first" to market (and they weren't).
  • 21echoes 12y ago
    Google Music does it the same way: https://play.google.com/intl/ALL_ALL/about/artist-terms.html https://play.google.com/intl/ALL_ALL/about/artist-terms.html """ (a) “Subscription Fees” shall be the greater of: (A): Monthly Subscription Minimum * number of Google Play music subscription service subscribers on the last day of such month * Your Subscription Activity Ratio -- OR -- (B): Subscription Revenue Share * Music Subscription Revenue * Your Subscription Activity Ratio """ B is exactly what is laid out in the parent article, A is a subtle twist on it. Both of them are still [Google's revenue] * Your Subscription Activity Ratio, where "Your Subscription Activity Ratio" == "the fraction: (i) the numerator of which shall be the total number of streams and plays of Your Tracks from the Google Play music subscription service; and (ii) the denominator of which will be the total number of streams and plays of all tracks from the Google Play music subscription service."
    • mytochar 12y ago
      So does this mean that an artist makes more money when I /don't/ choose Google Music, because they get paid per advertisement shown when I load their video? ... this makes me sad.
      • 21echoes 12y ago
        not even close! you'd have to watch the video more than a thousand times, each of those views having a pre-roll video ad before it, and never skipping thru the pre-roll video ad. realistically, this means the artist would have to get more than fifty thousand streams per month to equal just one subscriber.
        • 21echoes 12y ago
• dandare 12y ago
  Am I the only one here who is tired by artist complaining that we don't sufficiently support their preferred lifestyle? Also, the whole argument is straw-man, read what "pjc50" wrote.
  • IkmoIkmo 12y ago
    > Am I the only one here who is tired by artist complaining that we don't sufficiently support their preferred lifestyle? Also, the whole argument is straw-man, read what "pjc50" wrote. No, it's completely irrelevant. This is a discussion about a pricing model, not about an artists' lifestyle. Unless you want to think of the choices of artists whether to distribute on Spotify or not, depending on the pricing model, to be a 'lifestyle'. As for what pjc50 wrote, no, he didn't quite get the point of the article. Yes, perhaps the most equitable way to charge is for artists to set a price for 1 stream, or 1 permanent download (iTunes). But the Copyright holders are NOT being paid 'per-play'. Sure, they're paid more when the plays go up, but that's not necessarily indicative or a 'per play' model. Just like your gas station doesn't sell gas 'per mile' you drive, yet if you drive an extra mile you obviously pay more at the gas station than if you didn't drive that mile. Spotify is not a pay per play model for copyright holders. It's a pay-by-share model. This means that if 10 people are subscribed, and they all play two songs 10 times, the copyright holder gets as much money as when these 10 people played both songs 100 times each. Both songs get 50% of the artist revenue each, in both cases, which is 70% of 10x $10 subscriptions worth, which is $35 each per song, whether both are played once, or 10 times, or 100 times, no difference. Obviously NOT pay-per-play but pay-by-share. If it was pay-per-play then there'd be an actual difference in the songs' revenue if both songs were played 10 times or 100 times. Not the case with Spotify. Now, this is what the article is about: There are multiple (here just 2) ways to implement pay-by-share. 1) You total up ALL plays on Spotify, and ALL revenue. So say you have $1m of subscription revenue, and 1 million song plays in total. You then pay out artists the fraction of their plays. Got 10 plays? 10 plays / 10m total plays * 1m revenue = $1, that's your revenue. 2) PER USER, you total all the user plays, and take the $10 subscription, and then pay out the artists as a fraction of how much the artist listened to that particular user. Artist got 30 plays, user played songs 100 times? You take 30 user-plays / 100 user-plays * $10 = $3, that's the artist's revenue. Is there a difference? The assumption is yes. The assumption is that some music, like classical music, gets fewer average plays by classical music lovers, than an average pop song. i.e. a classic music lover might listen intently to a 15 minute song, and then another, and have 30 minutes of music, and generate 2 plays. And a pop song that's 3 minutes long, will get played 5x in that 15 minute period. And instead of 30 minutes of conscious listening, it'll be on in the background for hours and hours as it's made for radio. So you get 4 hours of 3 minute songs, that's 80 plays. Now say there's 1 pop lover, and 1 classic music lover. And say both categories have 2 artists that get listened equally. In model 1, you'd have 1 classic music lover listening to 2 classic artists and generate 2x 2 plays per day = 4 plays. And the pop lover generates 2x 80 plays is 160 plays, for a total of 164 plays. The two music lovers both pay $10, so you get $20, and the two pop artists both take home their 80 play share out of a total of 164 plays on $20, or: $9.75. The classic music artists take home 2 plays / 164 total plays * $20 each = 24c. In this model 1, we see that the classic music lover that pay $10, is subsidizing the pop artists with a huge fraction of his $10, despite the fact he only listens to classical music. But in pricing model 2, the two classic artists would each get 50% of the share of the classic music lover: $5. And the pop artists would both get $5, too. Only there'd still be more pop song lovers, so they'd still make a ton more money because which is fine, as again there are more pop song lovers. But then there'd also be more pop artists, so there'd be more competition. Neither models are pay-per-play. They're both pay-per-share. But in model two, the classic music lover who plays 0 pop music, is paying 0% of his money to pop songs. While in model 1, over 90% of his money goes to pop songs which is being called a subsidy for songs that are shorter, more culturally fit to play as background music/noise. In model 2, obscure, less popular, longer songs, songs with fewer average plays etc, get a decent bit of revenue, because they compete for revenue shares of users who listen to other like minded music, and thus they compete against other obscure, less popular (in absolute numbers), longer songs, songs with fewer average plays etc. I think it's clearly a more fair approach. And I think it's clear it has nothing to do with 'preferred lifestyle', and the argument is certainly no straw hat.
• codyb 12y ago
  His final comment "and listeners should be to0.", I'm not sure I understand? How does Terry's subsidization of yoga studios make any difference for Terry's listening experience? Unless it's a very deep point in that Terry's subsidization, if it didn't happen, would cause more small artists to pop up onto the scene thus increasing the diversity of the catalog.
• breyten 12y ago
  1. As soon as I'm playing more tracks than the number of tracks an average user pays I'm actually paying less than what Spotify currently pays. 2. People who do not play much music will probably not be exposed to much else than well know artists (Ie. Top 40). Or otherwise said: if I'm into music and spend time discovering not-so well known bands I'll probably play more tracks than the average user. 3. The number of people who will play less than the average number of tracks will be bigger than the number who play more. The end result is that rich and well known artists will end up getting more money, and lesser known artists less.
• sgwealti 12y ago
  I don't see much discussion of Spotify's role in setting their subscription pricing. I think this is an area where artists have a legitimate gripe. For example, in a hypothetical world let's say Spotify could capture a high amount of market share and still be profitable at $0.10/month. If they had the same revenue split they could say that they are giving artists 70% (0.07/month). I think the artists would rightfully complain that Spotify is devaluing their product. Artists like Taylor Swift are starting to catch on but people act like she's greedy and out of touch when she pulls her catalog.
• prostoalex 12y ago
  There's some audio content that fits Spotify model better, since it's optimized for endless replays * dance/electronic * elevator music * toddler songs (audience loves hearing that same song for 1,000th time) On the other end of the spectrum you have audio content that is intended to be listened to once, with extremes being audio books and radio news. An artist optimizing for endless replays would do well on Spotify: "E.D.M. artists like Avicii and David Guetta are seeing payouts in the millions. Avicii’s “Wake Me Up,” the most streamed song on Spotify, has more than three hundred million spins, which, using Spotify’s benchmark per-stream rate, would be worth about two million dollars to the rights holders." http://www.newyorker.com/magazine/2014/11/24/revenue-streams http://www.newyorker.com/magazine/2014/11/24/revenue-streams But it's not perfect model for every artist out there.
  • hussong 12y ago
    I love you you put dance/eletronic, elevator music and toddler songs in one bucket. I never thought of it that way and I think you're spot on. I guess we could add most of the music played on commercial radio stations (from top 40 to soft rock) as well?
• adamc 12y ago
  Old geezer here: Does anyone know how often the songs on a CD are played? If I spent $10 on a CD, what was that likely to generate per-play? (I'm old enough that I remember taping LPs and then listening to the tapes -- which was a near-universal practice amongst the folks I knew.) My guess is that great albums got listened to a lot -- driving down the revenue "per play" but generating great word of mouth and lots of net record/cd sales. How much of that applies to Spotify?
  • ScottWhigham 12y ago
    I'm happy to play along but first can you give us an idea of the answer(s) will relate to the topic at hand? I'm struggling to find a correlation.
    • adamc 12y ago
      I thought it would be interesting to get some kind of historical fix on whether this is really an unfair rate per song, and if so by how much. I'm also curious as to whether "per play" is really the right metric: if I sold you a CD and it sucked, you'd almost never play it so that rate might seem high... but be unimportant because you'd sell so few CDs. How does that translate to the Spotify model? Maybe this is obvious to others? But not to me.
      • ScottWhigham 12y ago
        I don't really know how you quantify "number of plays" through time and attribute a "value per spin". Take John Coltrane's "Blue Train" - $10 for that album in 1957 would have given you almost 60 years of unlimited play (if you could keep the record clean!). To a certain degree, "Buying an album" has always been a gamble. Spotify/Amazon/etc make it easier to (a) not buy albums that suck, and (b) buy more singles instead.
      • KFW504 12y ago
        One thing to focus on is that the rate per song in the CD era can't fairly be compared to the rate per song today - particularly for popular songs that have a global reach. I would agree that "per play" is only a partial metric, but would caution against trying to compare too much over time.
• nacho2sweet 12y ago
  Splitting with everyone is better because it gets the majors on Spotify which you need to give the service legitimacy. Major studios are bringing brands to Spotify, indies are draws but aren't big draws. They will put their stuff on Soundcloud and stream it for free to get ears to get concerts.
  • ScottWhigham 12y ago
    I don't follow. Why does splitting revenue amongst millions of people provide a boon for the major studios (thus making splitting everyone better)? You say it's better but I don't see the an elaboration on the why.
    • likeclockwork 12y ago
      I'm pretty sure the commenter meant better for Spotify's bottom line.
• ilamont 12y ago
  Artists are frustrated. And lite listeners should be too. Artists who don’t like it or aren’t getting enough value — either through payouts or marketing - should simply opt out of the system (if they can; in many cases control might rest with their record label or another rights holder). Some artists never opted in (the last time I checked, this included AC/DC) or withdrew part or all of their collections (Taylor Swift). I’ve watched the Spotify model appear in the ebooks marketplace, through services such as Oyster and Scribd. They target readers, and ultimately seek to ensure large payouts to investors, platform owners, and large publishing partners. Authors have largely been treated as an afterthought. Kindle Unlimited is even worse, demanding exclusivity and lowering sales of many authors.(1) I believe the time has come for recording artists, filmmakers, authors, and other media producers to band together to fight unfair or predatory platform practices. Subscription services may be great for consumers, but they don’t pay enough to the people who are creating the products that draw audiences in the first place. 1. http://www.kboards.com/index.php?topic=202571.0 http://www.kboards.com/index.php?topic=202571.0
• corndoge 12y ago
  Streaming: + Huge catalogue on-demand - Lower quality - Latency, dropped streams - Monthly subscription - Artists get next to nothing - Player lock-in Hard disk: + Zero latency + Highest quality + Artists get everything + Any player - Device storage limitations - Heavy file transfers I never understood why streaming caught on to begin with.
  • kudu 12y ago
    Local storage (which is what I think you mean, unless no stream service runs from HDD or no user stores music on an SSD) isn't necessarily better quality, since lossless music downloads are very rare. Also, you're ignoring the fact that buying every song one plays is much more expensive than simply paying $9/month.
  • robwilliams 12y ago
    For streaming you forgot: + Easy discovery (find an artist and play instantly without any download) + Your saved albums are available on any device instantly + No catalog/file management (important for mobile listening, as transferring new music was always a hassle) + Professional curation, social playlists
  • freyr 12y ago
    You forgot to include paying $0.99/song as a hard disk negative. Two more possible trade-offs: - Does the average person know how to transfer their music collection to a new computer? - Paying for songs a la carte requires thinking about what to buy and deciding if it's worth your money. Streaming reduces that friction. Having moved to streaming, I can't really imagine going back to storing songs. If I had a really great stereo or headphones, maybe then I'd reconsider. But streaming is just so much more convenient.
• kazinator 12y ago
  The proposition in the article only works because users pay a fixed monthly rate for unlimited listening, rather than a charge that is metered based on how much they stream. Jack Stratton's proposition is wagered on the proposition that the users who listen to his tracks are ones who don't listen to very much other stuff. His listeners pay $9.99 per months, but don't stream very much, and a big chunk of what they do stream is Stratton's material. He doesn't want most of that $9.99 going to those other damn artists, who are just random junk whose material isn't sought out by anyone, but streamed randomly in Yoga classes, elevators, supermarkets or wherever. If there is some user who paid $9.99, 70% of which is $7 going to the artists, and half of what that user listened to was Stratton's tracks, Stratton wants $3.50 for that month, for that user alone. Add to that other similar users, and extrapolate to twelve months and you have some non-negligible cash at the end of the year: better than a fraction of a cent. Problem is, no matter how you slice the pie, it is a zero-sum game. There is so much revenue and so many artists. Most artists, likely including Stratton, will lose this zero-sum game no matter how the pie is carved. There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts. The proposed rule would just create a tiny group which gets quite a lot more revenue than the rest, at the cost of slightly impoverishing every member of the remaining group, who then gets a slightly smaller fraction of a cent. It's actually a good rule from Spotify's POV because this tiny group would represent "success stories" which Spotify could use for promotion. On a different topic, this kind of reminds me of the whiners who complain about online dating sites. "I'm obviously a more qualified bachelor than most of the losers who make profiles on this site, so if only the implementation of the site were based on somewhat different rules, then I would easily get replies from the women I'm interested in. I might have found a girlfriend long ago if it weren't for this damn dating site. Waaaah ... sniff!"
  • pqomdv 12y ago
    3.5$ per user(!, or should I say a fan ) is significantly more than just negligible compared with fractions of a cent for every user. It is also more correct, your subscription is distributed to artists whose music you actually listened to. It repeat listens are accounted for, then it would be even more fair, since you usually listen more to your favorite artists. Currently the distribution just isn't correct. This is probably because of technical reasons.
• weissadam 12y ago
  I think the problem is that there is no distinction made between computer generated playlists (eg: Yoga Radio) and listener initiated streams. Why not keep the existing royalty structure, but split the royalty pie based on user initiated streams and computer generated streams. If someone buys premium and only listens to Yoga Radio: 30% Spotify 70% Existing Yoga Radio Big Pool Royalty Structure But if 50% of their listening is actual artists they have chosen (download to phone, click on artist/album or song/shared playlist from someone else/own playlist): 30% Spotify 35% Existing Yoga Radio Big Pool 35% Direct cut determined by per-listener chart Or if Mom signs up and only listens to her kid: 30% Spotify 0% Yoga Radio 70% Direct cut determined by per-listener chart (all to one with love from Mom) This not only rewards artists with loyal fanbases, but it also fairly compensates artists who compete in the mass market where people just listen to the radio and don't care. Best of both worlds, no?
• decisiveness 12y ago
  Why not charge the listener per song play and pay the artist 70% of each play?
• pbreit 12y ago
  The OP's idea does make some sense but so does Spotify's current scheme. The one area where there should absolutely be differentiated pricing is "radio-style" listens vs on demand listens (which should generate much more revenue for artist).
• kudu 12y ago
  This is a terrible idea, in my opinion. It would effectively cause users to "budget" the music they play, e.g.: "If I play that Rihanna song after playing 10 songs from my favorite indie band this month, it'll severely dilute the money going to them." The last thing Spotify wants is people not playing music for moral reasons.
  • genericuser 12y ago
    Pretty sure Spotify would have no problem with people who are paying for Premium choosing to not listen to music. Saves bandwith and doesn't reduce revenue, what is to not want?
  • Nemcue 12y ago
    I'd suggest that almost none of the users would be aware of this anyway, so their usage patterns wouldn't in any way shift.
• rorykoehler 12y ago
  Spotify should set aside X% of their equity and distribute it to artists. Each full play of a track would generate one 'artist' share. Then when they exit each artist gets their fair share. For example (to keep it simple I will use small numbers) let's say there are 100 plays in total on Spotify before they sell up, 1 of which belongs to Vulpeck (awesome band) then Vulpeck get 1% of X%. This way everyone gets paid fairly. The way it is now Spotify are basically monetising piracy. All the major labels have invested and are waiting for their pay day while the people who produce the content get shafted.
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• Dewie 12y ago
  Conventional music albums were known for only giving a small percentage of its sale value (minus retail and such, of course) to the actual artists. There didn't seem to be much fuss around that. But now that artists are getting a raw deal when it comes to streaming their music, it's practically a crime against humanity. I guess the "artists are being ripped off when it comes to record sales" blew over several decades ago.
• bake 12y ago
  From another perspective, should artists all artists give up the same 30% to Spotify? Or should artists who benefit disproportionately from services like Discovery and Radio, presumably lesser-known artists, pay more?
• aczerepinski 12y ago
  In the 90s I bought hundreds of CDs that cost $20-$25 each, inflation adjusted. Now albums are delivered at better than CD quality, and cost only $10. Supporting the music you love is cheaper than it's ever been. Why opt out of it?
• rgj 12y ago
  Venues playing music to their customers have to pay public performance license fees as well, so that skews the popular music subsidies even more?
• bbarn 12y ago
  Any discussion of how to split revenues is pointless without data about what paying users listen to. Top 40 listeners may percentage-wise be a much lower paying audience. Lots of the top 40 is aimed at teen/youth users, who have lots of hardware given to them, but not lots of subscription revenue or credit cards necessarily.
• nickbaum 12y ago
  I would love for a portion of my Spotify subscription to be discretionary, so I could proactively reward bands I love. In fact, I would gladly pay $2-5 extra a month for this feature. Here's how it could work. Every month, I'd get an email with the top 20 artists I listened to that month (stats! fun!). By default, my contribution goes to my most listened artist. I don't need to do a thing. If I want, I can manually go in and change the contribution to another artist – say I listened to the new Kanye album a ton, but would rather give my extra dollars to my second-most-listened, way-less-famous artist. I believe a lot of people get real personal value out of supporting artists they believe in. Right now, the best way to do this is to go to shows and buy merch. Optional donations as describe above are an opportunity for Spotify to increase the amount of money spent on music, while generating lots of goodwill from users and artists alike.
• cmdrfred 12y ago
  The real truth here is music is becoming cheaper and cheaper to make. A few grand worth of equipment is all that is required to generate most of the stuff you probably listen to, and if that isn't the case now it will be in what 5? 10 years? Also think about the talent pool. The only longer line at the job fair is probably for playboy photographer. Tons of people wanting to make music + low barrier to entry = Cheap music The only thing attempting to hold this dinosaur market afloat is monolithic record companies, and their stranglehold on the popular genre seems to give them enough leverage to arrange a deal in their favor. Hence what we observe here. What will likely end up happening is the next cost of music will become zero to the end user and bands and artists will find new revenue streams. Such as live performances, or perhaps product placement. Or does economics not apply to art?* *I'm the weird guy who doesn't like music so I may be entirely wrong.
• deleted 12y ago
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• ericdykstra 12y ago
  If you want to support your favorite music artists, send them money directly. That's basically the only way you can ensure a reasonable portion goes into their pocket. Services like Spotify don't support independent, awesome musicians that you love enough to give them even a bad living. If someone creates art that touches you and improves your life, figure out a way to support them in a way that actually makes a difference.
• jpalomaki 12y ago
  The Top-40 pop song probably has quite limited shelf life. It gets lots of plays for now, but some other track can make money for next 20-50+ years.
• Animats 12y ago
  Spotify's "all you can listen to" model inherently implies they're going to be used as background music. Could be worse. They could have their own musicians record popular songs and classics, and just pay the statutory royalty to the composer. Seeburg did that in the 1950s.[1] They sold the Seeburg 1000 background music system, and rented out phonograph records of background music, all recorded by Seeburg musicians. Stores rented and serviced the simple record changer, which endlessly played a stack of 25 records (both sides), about 50 hours of music. It's not a jukebox; it's much simpler. Instead of copyrighting the disks (back then you had to register a copyright and pay for renewals), they used a primitive form of DRM - the records are 16 2/3 RPM, 9 inch diameter, 2 inch center hole, 0.005" stylus width, mono. This is incompatible with everything except a Seeburg 1000, though it's not hard to adapt a turntable to play them. Someone has digitized the available Seeburg 1000 records, and you can listen to about 6000 songs of '50s - 70s background music. [1] http://radiocoast.com/ http://radiocoast.com/
• powatom 12y ago
  I can't help but feel that all of these complaints about low pay etc are just a symptom of the new reality. I don't really understand what people are expecting here. Distribution costs are minimal, audience is (kind-of) locked-in, discovery is relatively simple. The risk is almost entirely on Spotify's end of things, rather than the artists. Yes, without the artists, Spotify doesn't have a business - but without digital streaming services like Spotify, users could easily end up under an iTunes monopoly which probably wouldn't be good for anybody (although I believe - may be wrong, but please correct me - that iTunes does give artists a better deal currently?). The world is going digital, and people want to stream stuff. That's just a fact. Sure, many people will always buy CDs and LPs, but there being 'no money' in recording music is hardly a new phenomenon - people have complained about it for years before digital streaming was even a thing. I really do have sympathy that there isn't much money in recorded music, but I do struggle to find a justification for why artists seem to think Spotify should be paying them more other than the fact that they just 'want' it and need to make a living. I understand that completely - and honestly I'd probably pay a higher price for Spotify if they demanded it and the extra money went to artists. I think the problem is this: the music industry in general has exploited artists for years. It is not a business that works in the artist's favour, unless those artists are extremely popular (and even then, labels can seriously fuck artists over if they want to). Outside of the superstars, musicians may (not always, but often) fare better when they organise their own affairs - live performances, commissions for work, appearances, media, collaborations etc. They probably won't get super-rich doing this, but it could be a decent income for the right artists. What we have instead is a situation where artists create music for a (more or less) one time cost (recording, mastering, equipment, studio time etc) and then hope to make the money back through physical sales, royalties, and performances. The problem, I feel, is that the initial costs of production are still high, but the distribution costs are now incredibly low, which means end-consumers are reluctant to pay higher prices. I don't see any way around this other than altering the nature of the business itself. If production is always going to be a costly affair in the music world, then income from royalties through services like Spotify are destined to be considered low. I honestly think there's no real hope for any significant increase in income through digital services. Why should there be? There's no technical reason to increase fees - distribution gets cheaper all the time. The only way to increase royalty payments generally is to either cut into profits, or pass the increase on to the customer - neither of which are sensible business decisions unless Spotify's hand is forced. We don't really have a profitable relationship with music - the value we attach to a single track on iTunes or Spotify doesn't reflect at all the costs to the artist - but unless artists can convince consumers to start paying a lot more, I just don't think they'll see significant returns from recorded music any time in the forseeable future. It's just not an industry that pays particularly well. Production costs are high, distribution costs are low. Unless we alter the way music is produced, performed, and experienced, people won't feel like paying more gives them any extra value. It's an uphill battle. I wish things were better for artists, but I just don't see a way out of this is that doesn't involve massively increasing price at the point of consumption.
• owly 12y ago
  Question: If spotify isn't a good deal for indy artist, why don't they all abandon the platform and use an alternative? Like Bandcamp, which you mentioned pays 8x. Come on artists, I dare you to?! :) Or are you afraid of subverting the dominant paradigm?
  • rthomas6 12y ago
    Because they can use both?
• rainmaking 12y ago
  I have started a petition on change.org for this, please sign it: https://www.change.org/p/spotify-ltd-pay-artists-from-the-people-that-listen-to-them https://www.change.org/p/spotify-ltd-pay-artists-from-the-pe... Suggestions for improvements welcome.
• SyncTheory13 12y ago
  If Spotify or Google Music switched to the suggested model, or at least 50/50 suggested/current way - I'd happily subscribe IMMEDIATELY - probably even pay a family plan. Please?
• yermoshin 12y ago
  This is an interesting proposition, and one which I'm sure has been thought about and considered by the labels. However, I think people who think this would be better for indie artists are misguided. The reason this change would very likely not benefit indie artists is simple: People who listen to more music are more likely to have a high proportion of their music listening being "indie" than those people listening to less. Pdpi's example explains very nicely how this would benefit pop artists over indie. Does this system have other benefits? Yes, a wonderful inadvertent thing you get for free is eliminating fraud listening. People would be unable to create accounts to listen to one artist on repeat all month long and laugh six months later when the checks come in (see the Vulfpeck story for those unfamiliar) Would some indie artists benefit from the change? Yes, of course some artists wouldbenefit, that's pretty much inevitable under any calculation methodology change. None of this addresses the issue of time spent listening. Classical and Jazz payouts will consistently under-index people's time spent listening simply because the track recordings are so much longer than the average recording length. A time spent listening payout system would be a huge improvement, but then you can imagine people trying to manipulate this (throwing 25 minutes of silence on the last track of the album anyone?). Smoke and mirrors...
• hobarrera 12y ago
  > Normal listeners are subsidizing yoga studios that play Spotify all day. I didn't go thorugh Spotify's TOS, but is it allowed for commercial settings such as stores, studios, etc? I'd think the price would be for personal use only.