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Music Businesses The Almighty Buck

Spotify's Own Math Suggests Musicians Are Still Getting Hosed 244

Posted by Soulskill
from the go-put-your-favorite-band-on-repeat dept.
Nerval's Lobster writes "Spotify wants to change the perception that it's killing artists' ability to make a living off music. In a new posting on its Website, the streaming-music hub suggests that songs' rights-holders earn between $0.006 and $0.0084 per stream, on average, and that a niche indie album on the service could earn an artist roughly $3,300 per month (a global hit album, on the other hand, would rack up $425,000 per month). 'We have succeeded in growing revenues for artists and labels in every country where we operate, and have now paid out over $1 billion USD in royalties to-date ($500 million of which we paid in 2013 alone),' the company wrote. 'We have proudly achieved these payouts despite having relatively few users compared to radio, iTunes or Pandora, and as we continue to grow we expect that we will generate many billions more in royalties.' But does that really counter all those artists (including Grizzly Bear and Damon Krukowski of Galaxie 500) who are on the record as saying that Spotify streaming only earns them a handful of dollars for tens of thousands of streaming plays? Let's say an artist earns $0.0084 per stream; it would still take 400,000 'plays' per month in order to reach that indie-album threshold of approximately $3,300. (At $0.006 per stream, it would take 550,000 streams to reach that baseline.) If Spotify's 'specific payment figures' with regard to albums are correct, that means its subscribers are listening to a lot of music on repeat. And granted, those calculations are rough, but even if they're relatively ballpark, they end up supporting artists' grousing that streaming music doesn't pay them nearly enough. But squeezed between labels and publishers that demand lots of money for licensing rights, and in-house expenses such as salaries and infrastructure, companies such as Spotify may have little choice but to keep the current payment model for the time being."
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Spotify's Own Math Suggests Musicians Are Still Getting Hosed

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  • Your call (Score:5, Insightful)

    by oldhack (1037484) on Tuesday December 03, 2013 @11:10PM (#45591487)
    Pull your tunes out of their service if you don't like it.
    • Re:Your call (Score:4, Insightful)

      by Entropy98 (1340659) on Tuesday December 03, 2013 @11:19PM (#45591525) Homepage

      It actually doesn't sound that bad, 400,000 web pageviews pays nowhere near $3,000.

      • Re:Your call (Score:4, Insightful)

        by DexterIsADog (2954149) on Tuesday December 03, 2013 @11:28PM (#45591589)
        You're comparing a webview of a frivolous news story or blog post to a recorded song as if they were of equivalent value.

        Seriously?
        • Re:Your call (Score:4, Insightful)

          by Z34107 (925136) on Tuesday December 03, 2013 @11:40PM (#45591649)

          You're comparing three minutes of frivolous background noise to the written word as if they were of equivalent value?

          Seriously?

          • by slick7 (1703596) on Wednesday December 04, 2013 @01:22AM (#45592069)

            You're comparing three minutes of frivolous background noise to the written word as if they were of equivalent value?

            Seriously?

            Between the Patriot Act and the NDAA and listening to the Barney song, Barney has it!

            • What's the difference between obnoxious and obnoxious?

              • Re: (Score:3, Funny)

                by sumdumass (711423)

                One has a ? At the and and the other has a space.

                Something tells me that wasn't whAt you were after.

                Anyways, i'm wondering how the payments compare to radio with say a single station snd 400,000 listeners. I know BMI collects and pays differently for college radion verses commercial radio.

        • Re: (Score:3, Insightful)

          And those whining about Spotify want to treat "plays" as if they were purchases.

        • Is a song any more significant than a blog or any other page? Either one, drawing 400,000 takes either luck, or to produce something so good or so bad that it gets shared/tweeted into active circles etc... in both cases the off the charts money makers, are the creations that seem to have taken the least effort.
    • I believe Spotify operates under compulsory/statutory licenses, so you can't really pull your music from the service.
    • Re:Your call (Score:5, Interesting)

      by fermion (181285) on Wednesday December 04, 2013 @01:41AM (#45592153) Homepage Journal
      My understanding is that much of this is based on compulsory licensing. This means that if you record music, and sell music, then it fair game for broadcast. This has been the model for a long time. And it has worked. One wonders if the Beatles or Elvis would be successful if the radio did not pay to advertise their music. Yet much of the current issue we have from streaming is because many labels and artist think they left a lot of money on the table when the licensing for radio was established. Many labels and artist seem to believe that radio is stealing money from them, although one wonders how a hit can be generated more cheaply than through airplay. Airplay that depends on broadband owned by the public, BTW.

      Here is why internet radio is not stealing money from artist. Because it pays more. My understanding is that it pays directly to artists, not through middlemen who manipulate the numbers to pay royalties to artists based on fictional 'credits'. So if an artist is to get $100 from spotify, that is $100 that they would have never gotten through radio, and part of the money is not being diverted to more 'popular' artists or just not paid at all because you do not meet the quarterly threshold.

      I also think that the labels might be making a long term mistake by believing they need to maximize upfront profits in streaming instead of looking at the promotional possibilities. As an example I look at Eminem. He got really pissed off at Napster when his music was on the site back in 2000. However, his music was not playing on the major young peoples stations in 2000. He was playing on some stations I listened to, in particular a hybrid english/spanish/hip hop(ther is fair amount of really good spanish hip top) station, but was not at all what the 'in crowd' listened to. Suburban parents were not comfortable with rap. But kids were hearing the music, and I wonder where from. Could it be they were downloading it to the computers? From Napster. I recall when he broke through to mainstream stations. For instance I was in the gym and the DJ(they still existed back then) was pleading with listeners to stop calling requested 'Stan' as they were going to get it on the air as fast as they could. As I said, most stations were not playing it, it was listener demand.

      This has all been rehashed millions of times. That the artists are being robbed by streaming. I don't know. In the US minimum wage is less than $8 and hour, so if you spend 40 hours on a song, and get $300 in royalties, I am not sure who you are behind. If I spend 40 hours coding, and someone uses it once, am I entitled to $300? The reality is that recording music, like coding or anything else, is a speculative enterprise. Unless you create some work for hire, where someone else is going to take the risk and gain the majority of the reward, there is no entitlement to pay.

      Frankly, if all the big talent that wouldn't work for less than a million dollars a year, I am sure that we would be back to days where most work was done 'for hire' and the artists were paid the absolute minimum possible.

      • Re:Your call (Score:4, Insightful)

        by Anonymous Coward on Wednesday December 04, 2013 @04:07AM (#45592689)

        My understanding is that much of this is based on compulsory licensing. This means that if you record music, and sell music, then it fair game for broadcast. This has been the model for a long time. And it has worked. One wonders if the Beatles or Elvis would be successful if the radio did not pay to advertise their music. Yet much of the current issue we have from streaming is because many labels and artist think they left a lot of money on the table when the licensing for radio was established. Many labels and artist seem to believe that radio is stealing money from them, although one wonders how a hit can be generated more cheaply than through airplay. Airplay that depends on broadband owned by the public, BTW.

        The problem is that Elvis and the Beatles et. al. were successful because their music got played on radio which then contributed to sell their albums. The problem is that nowadays hardly anybody buys albums if they can avoid it, they just use Spotify instead or simply torrent the music and that trend will increase. If we are to regard Spotify as a modern equivalent of the radio stations of the 1960s (and some music industry person actually commented you should regard Spotify as a publicity mechanism, not as a way to make money off of music) then my local Pirate party is in trouble because they have been billing Spotify as an example of a __replacement__ for the old outmoded business model of selling records/CDs. I just witnessed a lengthy debate between a local Pirate party politician and a rather well known musician where the musician presented real world figures over the pitiful amounts of money he made off of his more popular songs on Spotify as opposed to CDs. He was trying to voice the exact opinion being voiced in this article, i.e. that musicians are getting hosed way worse by Spotify and similar services than they ever were by the old Studios (who are major shareholders in Spotify by the way). Meanwhile the Pirate just kept harping on about Spotify and others being the new business model and ignoring his argument and his experience completely. The whole debate reminded me of the total disconnect between Democrats and Republicans in the US. I don't really disagree with the Pirates on this particular issue, there is a pressing need for new business models that are fair to musicians and not just the gatekeepers of distribution services. Some of these Pirates genuinely seem to be trying to solve the quandary of creating a new business model to enable Musicians to earn a living in the internet age. Their problem is that they just keep coming across as arguing that (and I get this a lot when talking to people about political parties): 'we are entitled to pirate because we can and therefore we are entitled to get stuff for free'. This is probably not the impression Pirate parties want to project since it tends make them look like freeloaders and freeloading in my experience tends to piss off large portions of the electorate. Holding Spotify up as an example isn't helping either.

        • Re:Your call (Score:5, Insightful)

          by GrumpySteen (1250194) on Wednesday December 04, 2013 @07:56AM (#45593451)

          The problem is that nowadays hardly anybody buys albums if they can avoid it

          Your "hardly anybody" bought 204.8 million albums and 1.34 billion individual songs last year [billboard.com].

          the musician presented real world figures over the pitiful amounts of money he made off of his more popular songs on Spotify as opposed to CD

          Would you pay $20,000 to rent a car for one trip to the store?

          No? Then why would you think that people should pay as much to listen to a song one time as they would to buy it on CD? Yet that seems to be the argument the musician was making.

        • Re: (Score:2, Interesting)

          by peragrin (659227)

          you are missing the point. the recording studios killed the album for sales. they did this in the 80's and 90's. Sure a couple of groups put together actual albums but mainly they are just a group of randomly selected 3 minute clips like custom mix tapes only containing one artist.(sorry custom mix playlists containing one artist, for those born after 1990) People got used to buying singles, and albums for one track long before napster was ever dreamed up. So when mass distribution of music started hap

      • Re. promotion, I've bought 10 albums in the last month or so, after listening to them on Spotify and deciding I liked them. Without Spotify allowing me to listen to the albums, I wouldn't have bought them. So Spotify does generate sales. I guess the question is, what proportion of people do buy stuff after hearing it on Spotify?
    • Re:Your call (Score:5, Insightful)

      by mjwx (966435) on Wednesday December 04, 2013 @02:12AM (#45592283)

      Pull your tunes out of their service if you don't like it.

      You do know that most "artists" dont have that control.

      The reason writers and singers are getting screwed has nothing to do with Spotify, rather it's the system set up by the music industry to ensure that most cant profit or control their own works.

      Spotify is the player, however it is the game that's rigged.

    • by flyneye (84093)

      I'll say it again; if you are selling your songs and expecting a profit, you are WRONG!
      Doing the same thing over and over and expecting some different outcome is well...you fill in the blank.
      Forget the damn industry. If you operate within the bounds of the industry business model you are and will be f**ked.
      Operate on a level playing field with the internet and replace the industry model.
      1. Give your music away, it's the best way to stay in peoples minds and on their players. Obviously jingle writers can't b

  • by elmer at web-axis (697307) on Tuesday December 03, 2013 @11:14PM (#45591503)
    Lots of middle men still exist between a artist and the end listener. All with very sticky fingers handling the money.
    • indie bands are getting hosed from all corners these days...

      All with very sticky fingers handling the money.

      It's true even in weird situations, like a local punk band in my West Coast city that released a *cassette tape* album that had a free download card

      Essentially, all they needed was someone to print the cassette for them, b/c the download was through Bandcamp.

      A local indie label with several good releases and some credibility agreed to release the tape, but did not tell the band until after the tape wa

  • by Runaway1956 (1322357) on Tuesday December 03, 2013 @11:18PM (#45591513) Homepage Journal

    What is there that dictates that an artist should be compensated every time a song is played? The rest of us are paid by the hour, by the job, under contract, or whatever. What is so special about artists, that they should be paid in perpetuity for having done a performance?

    The REAL problem is, the artists get such a small piece of the pie, in comparison to the major labels. When a song becomes a global hit, the label makes billions, the artist gets a few million as a reward for enriching the label. And, all the REST of the artists are left believing that entertainment should pay big.

    Dude - if you love music, play your music. If you love money more than you love music, maybe you should lay your guitar aside, and learn how to make a living. Musicians are cool and all, but FFS, we don't owe you a living for singing and playing.

    • by viperidaenz (2515578) on Tuesday December 03, 2013 @11:29PM (#45591595)

      That's why artists tour. They make shit all on album sales. Especially if they didn't write all the songs they sing. They make lots more with ticket sales.

    • Re: (Score:3, Insightful)

      by DexterIsADog (2954149)
      Exactly. Just like people who create businesses. They're entitled to reasonable hourly pay, but once the company exists, if they're not still working, they shouldn't get anything more. The business would belong to... well, everyone, I guess, just as you believe songs and other creative content should be ownerless once created.

      Right? Ownership is theft!
    • by alen (225700)

      artists make about average profit margins for a business after expenses

      the big pop artists spend a lot of money on advertising. you think its an accident how the photogs always catch lady gaga wearing weird clothes?

      by the time you pay for recording, marketing, itunes/amazon and all the other expenses you get some for yourself and then you have to tour. just like every other business today. most products are loss leaders and you need a high margin product to make all the profits. in music its selling the rec

    • Dude... To play as well as it takes for some no-talent schmuck to want to listen to something more than once takes a lifetime of very, very hard work. The problem is that people who aren't musicians have no appreciation for the work, heart and soul required for music to be good, let alone great.

      Clearly you don't.
      • by jelizondo (183861)

        You mean like every other profession?

        You don't get to be a great engineer, architect, doctor or dentist just by going to school. It takes talent, will, hard work, good luck and years of effort.

        Now, how many engineers or architecs (doctors or dentists) have a change to become millionaires like an artist or sportsman?

        Artists always think they are special and nobody else can even begin to understand how special they are... Well, try engineering for a while. You won't even make it past Calculus I, great special

        • by russbutton (675993) <russ.russbutton@com> on Wednesday December 04, 2013 @03:04AM (#45592459) Homepage
          There are a lot of scientists and engineers who are also very fine musicians. The difference is that they are capable of doing something other than music. I'm one such person. I've been playing trumpet all my life. I've just never had any illusions about doing it for a living. I make my money as a Linux sysadmin. Been in the UNIX/Linux biz since '89.

          People who make their living in music do so because they really aren't cut out to do anything else. I know. I'm married to one. She owns about $100,000 in instruments and makes about $45,000/year as a professional violinist.

          I don't know ANY musicians who think they are due Great Wealth. They just want to make a living and pay the rent like the rest.

          What's kind of funny in this discussion is that in the San Francisco area, the general population is complaining about all the techies at companies like Twitter, Zynga, etc who have taken over much of the city. Rents are going through the roof. $2500/month gets you a 2 bedroom 1 bath apartment these days. More in better neighborhoods. Folks here are talking about how the techies are all self-indulgent and act entitled. Pretty much the same way you talk about artists.
          • by CastrTroy (595695) on Wednesday December 04, 2013 @10:03AM (#45594265) Homepage
            I think the real issue with doing music, or writing, or basketball (any sport) for a living is that there is a very small job market when you think about it. Sure everybody listens to music, but everyone tends to listen to the same 20 musicians. Same with basketball, there's only 30 teams, and 15 players per team, that's about 450 players. There's an extremely small number of people who make money in any of these professions, and the rest of the people make little to no money A "programmer" who can't even program fizz-buzz can easily make a decent salary but the equivalent of a musician or athlete with that level of talent is basically worthless. So sure, there's a lot of programmers (millions) who are making a lot of money, but that's because there's an actual demand for that many programmers. There isn't a demand for a million musicians, a million basketball players, or a million writers. There's a demand for millions of shelf stockers, but there's 10's of millions of people who are capable of doing the job. With programming, the demand for people outnumbers the number of people qualified to do the job. So of course they're going to get paid a lot.
    • by MrKaos (858439)

      What is there that dictates that an artist should be compensated every time a song is played? The rest of us are paid by the hour, by the job, under contract, or whatever. What is so special about artists, that they should be paid in perpetuity for having done a performance?

      Then why should authors or anyone else who gets paid royalties. The reason is because it takes a long time to create a piece of art that is worth listening to. "A performance" entails an enormous amount of upfront time and expense, a

    • by gsslay (807818)

      What is so special about artists, that they should be paid in perpetuity for having done a performance?

      So you are suggesting that musicians, rather than being on a commission based on sales, become employees of some music company, paid by the hour? Like, say, a programmer. It's an idea. But people tend to disparage treating music as a production line. They value the freedom given to an artist. That's what makes them special.

      maybe you should lay your guitar aside, and learn how to make a living

      Or are you saying that musicians become amateurs, and fit in their hobby around their real living? Again, an idea, as long as everyone is happy to accept that no-one really has

  • by future assassin (639396) on Tuesday December 03, 2013 @11:18PM (#45591515) Homepage

    > (Grizzly Bear and Damon Krukowski of Galaxie 500) who are on the record as saying that Spotify streaming only earns them a handful of dollars for tens of thousands of streaming plays?

    So why don't you pull your songs from Spotify? Why not put them where you'll make bags of money? Wait you probably can't as you don't own the rights/distribution rights to your music?

    Seriously you'd thin by now, and by that I mean ( its not 1997 and the technology has been there for years) the artists as a collective would have created their own distribution service and raked in the dough.

    • by UnknownSoldier (67820) on Tuesday December 03, 2013 @11:31PM (#45591607)

      Concur 100%.

      The artist don't want to admit that they need to pay for popularity which is no different from the existing system.

      Real bands just work hard their entire life to expand their fanbase instead of whining about it.

    • Seriously you'd think by now... the artists as a collective would have created their own distribution service and raked in the dough.

      The band Tool does that for themselves, but to do it for other artists... dunno, that seems weird. I imagine that, like so many other groups of people, bands simply can't focus on 2 aspects of the industry. Making music as well as focusing on releasing that music on a scale that exceeds 1 band's tunes would eventually be to tiresome. I mean to say that at some point the sheer volume of music that had to be "delivered" to The People would require a full-time group of people that would have to get some cut

      • What I was trying to say that why can't the bands come together, create an association that creates a streaming/download service where they control it all. What would need to happen is popular bands would need to go in head first then use their power to promote other bands on this service along with promoting the serivce as artists for artists. As those new bands expand they would as port of the system use their fame/user base to promte other bands/the service.

        For example say In Rainbows by Radiohead. I bo

    • > (Grizzly Bear and Damon Krukowski of Galaxie 500) who are on the record as saying that Spotify streaming only earns them a handful of dollars for tens of thousands of streaming plays?

      So why don't you pull your songs from Spotify? Why not put them where you'll make bags of money? Wait you probably can't as you don't own the rights/distribution rights to your music?

      Seriously you'd thin by now, and by that I mean ( its not 1997 and the technology has been there for years) the artists as a collective would have created their own distribution service and raked in the dough.

      I'm no music industry insider but you have made me curious and since you dispense that advice so freely and with such unshakable authority you must know ... Where can people put their music and make bags of money without being ripped off by middle men and gate keepers like Spotify? I have a couple of indie musician friends who do own the distribution rights to their music and who'd be thrilled to know how to easily make bags of money without having to deal with parasites.

      • In the simplest form: set up a website, stick their music on it, and put out the word. Of course this probably means they'll have to pay parasi^H^H^H^H^H^H professionals to set up and manage the website, market the music, arrange plays on radio stations, do bookkeeping etc. Or try an Indie label. They'll take their cut, but at least you'll not be feeding a large bureaucracy, record label execs, or subsidizing less successful bands, and you'll be able to retain IP rights to your music. You'll most likely
      • by N1AK (864906)
        Because clearly he has to have a fully worked out business model for his point to be valid :P

        An application that serves adverts and/or allows a small subscription fee to access and play a music catalogue is hardly some mystical and hard to produce product. So here's what could happen: A group of 20 Indie bands and artists get together and form a partnership with a entrepreneur. The entrepreneur agrees to found a company owned by the bands, which will be obligated to give 10% of profits to the entrepreneu
  • by EvilSS (557649) on Tuesday December 03, 2013 @11:21PM (#45591529)
    One of the articles today covering this compared the royalty rates to those paid by radio, which were about 10x what spotify pays. The problem is a) how many indie artists get ANY radio play and b) Radio royalties are per play, spotify royalties are per play per user. Sounds to me like radio stations are the ones giving them the shaft.
    • by radarskiy (2874255) on Tuesday December 03, 2013 @11:38PM (#45591635)

      a) Radio pays 0 performance royalties, only publishing royalties.

      b) The publishing rights clearinghouses distribute royalties based on sampling, despite the fact that radio stations are required to submit their complete logs books. So if you're far enough down the long tail they may never recognize your play count.

    • by unitron (5733)

      One of the articles today covering this compared the royalty rates to those paid by radio, which were about 10x what spotify pays. The problem is a) how many indie artists get ANY radio play and b) Radio royalties are per play, spotify royalties are per play per user. Sounds to me like radio stations are the ones giving them the shaft.

      Yeah, well either that or radio is giving that song free advertising by playing it in the first place.

      There's a reason record companies send radio stations free promotional copies of records, even if they're in some form other than vinyl these days.

  • by Just Some Guy (3352) <kirk+slashdot@strauser.com> on Tuesday December 03, 2013 @11:21PM (#45591537) Homepage Journal

    So, how much does an artist make per single over-the-air play on a station with 550,000 listeners? If as many people listened to Spotify as to broadcast radio, half a million plays per month seems absolutely trivial.

    Without knowing how Spotify's pay compares to radio, this sounds like little more than an emotional rant from Clear Channel.

    • by Firethorn (177587)

      So, how much does an artist make per single over-the-air play on a station with 550,000 listeners? If as many people listened to Spotify as to broadcast radio, half a million plays per month seems absolutely trivial.

      That's the thing, I don't think the rates are based much on the estimated listener, plus as somebody else mentioned, most of the payment goes to the writer of the song, not the performer. Even then the sticky fingers of all the middlemen suck most of the money out.

      On the other hand, I have to ask, should a 'nich indie performer' with a single album earn $3.3k/month from spotify alone? Maybe once he or she has ~5 albums out.

      • by unitron (5733)

        ... most of the payment goes to the writer of the song, not the performer...

        Well, actually it goes to whoever owns the publishing rights, whether that's the composer or someone to whom they transferred those rights.

        • Actually, music writers have a very good guild and have managed a much better job at maintaining publication rights than the artists that perform the songs.

          • by CastrTroy (595695)
            That's because the writer effectively owns the song, while the artists only owns the single performance of the song which was recorded. It's completely legal for the writer of the song to allow Band A to play a song and sell copies (with a percentage going to the writer), and allow Band B to record the same song and also sell copies (again with a percentage going to the writer). Unless the writer signed some kind of exclusivity agreement with the first band, he's perfectly within his rights to let another
    • Without knowing how Spotify's pay compares to radio

      Well, lets throw some stats onto the table then. These are the Spotify artist compensation stats for the Finnish singer-songwriter Anssi Kela's hit song Levoton tyttö (original article [anssikela.com]):

      March 2013: 186 317 plays, €458,70
      April 2013: 415 353 plays, €878,60
      May 2013: 300 524 plays, €618,30
      June 2013: 156 119 plays, €381,30

      Total:
      1 058 313 plays
      €2 336,90

      In the same article, the artist comments: "2336,90 euros is better than nothing. At least there is something coming through Spot

      • by unitron (5733)

        ... Currently the situation is that people have to listen one song for roughly two thousand times on Spotify for it to make me equal amount of profit that I get from one CD sold."

        So, if the buyer of the cd doesn't listen to that same song at least 2,000 times, they overpaid, right?

        • by N1AK (864906)
          That's one way you could look at it, especially if you think that an artist should be paid the equivalent of maybe £0.25 for an album sale. At less than £0.002 per sing play on Spotify that's what the artist would get for my playing a typical album around 10 times start to finish.

          It's a shame that the debate seems to be dominated by the two extremes. The artists and record companies who want, for obvious reasons, music to cost more so that they can earn lots of money vs people who think copyr
      • by SydShamino (547793) on Wednesday December 04, 2013 @01:40AM (#45592149)

        $3800 for what amounts to a few weeks writing a song and coming up with accompanying music, recording it, and getting it post edited doesn't sound so bad, especially since they also made money from other streaming sites, CD sales, live performances of that song, T-shirts and posters sold because people like that song, etc.

        What do they expect, to be able to retire off one "hit"? If they want to be a professional musician, they need to put in 40 hour weeks for 40 years and save for retirement, just like every other professional. If they're not able to be creative like that, maybe a creative profession isn't suited for them.

      • by Alioth (221270)

        It's a lot better than nothing. Let's assume the artist spent 100 hours of work just on that specific song and recording. 2336 euro then works out at 23 euro per hour pay, which is actually not bad, and so far we're only listing four months. There will be plays in July, August, September, October and so on, so the final hourly rate for making that song is probably going to be 50 or 60 euro/hr. That's a pretty good hourly rate for doing something that is basically fun.

      • by millwall (622730)

        As a hobby I write some music which I publish independently on Spotify and some other platforms such as iTunes.

        I use a service called http://www.tunecore.com/ [tunecore.com] and apart from their charges I have no middle hands whatsoever.

        My songs seem to average nearly 4 times as much revenue as Anssi Kela's. I get around $0.008 per Spotify stream (slightly different payments apply depending on in which country a Spotify user plays a song). Here are some stats for one of my songs:

        Month Streams Total
        Aug 2013 670 $5

    • How much? If 1% of those listeners decides to buy an album or single after hearing it, they'll make a fair bit even under extortionist record label contracts. Radio is a great way to advertise, and unlike Spotify (where I can sample and discover music on my own) they are also market makers: they have a sizeable influence in making songs popular. So it's not all that straightforward to compare radio and Spotify.
  • by Anonymous Coward on Tuesday December 03, 2013 @11:23PM (#45591547)

    Summary fails to mention that the payout is 70% of Spotify's monthly revenue divided by number of tracks played in that time period, distributed to the rights holders (BMG/EMI/Warner/maybe even you, puny indy guy) based on play count. If you're under a label, you then apply your contract rate and finally get your cut of the proceeds, which is probably not a lot.

  • by Anonymous Coward on Tuesday December 03, 2013 @11:24PM (#45591553)

    Ben Folds, one of my favorite artists, spoke on the issue and said essentially... "I think people are going to look back on this time 50 years from now and say, wow, people could become millionaires just by playing music".

    It is really only the last 50 years or so that groups became enormously wealthy based on the music they perform, and now things are returning back to normal.

  • by EmperorOfCanada (1332175) on Tuesday December 03, 2013 @11:27PM (#45591581) Homepage
    I am not saying that spotify money is enough. If anything it sounds like they are just another group exploiting artists but if I understand they are still a goldmine compared to radio. These artists are saying that they got some crappy little payment for 1 MILLION listens making it seem like they were ripped off and that 1 million is a huge number. But 1 million would be a normal number listening to a NY radio station at primetime and the same artist would be all chuffed that they are in a NY radio station's prime time rotation. But that radio station would be paying peanuts for that.

    I suspect that this is why some of the more "successful" (I'm not saying good) artists just tour tour tour and can barely be bothered to politic their way in to the top 10 charts. This way they have much more control over the money. If some promoter tries to set up a concert where the artist is getting shafted then they just won't show up. Worst case contractually they will just get "laryngitis".

    I have read an interesting thing about iTunes though. Many dead music libraries from decades ago suddenly became viable with iTunes. Some artists who charted in the 60's and 70's said, "I haven't had a royalty check in 15 years even though I hear my stuff on radio every now and then. But after I put my stuff on iTunes I'm now getting around $30,000 a year."

    So one of the things with Spotify being ragged on by the artists might come from the fact that the numbers are presented to the artist making it clear that they aren't getting much money. Whereas their other distribution channels are much cloudier so they don't know how badly they are being screwed.
  • Well... (Score:2, Interesting)

    by Anonymous Coward

    How do Spotify royalties compare to broadcast royalties [billboard.com]? Which at least in the U.S. apparently amount to 18 cents per 1000 listeners (or $0.00018/listener, or if my napkin math is right... 1/33 of what Spotify pays per listener?)

    Doesn't seem like new media's getting rich, either. Do any of these services turn a profit?

  • What's a stream? (Score:5, Interesting)

    by Solandri (704621) on Tuesday December 03, 2013 @11:33PM (#45591617)

    Let's say an artist earns $0.0084 per stream; it would still take 400,000 'plays' per month in order to reach that indie-album threshold of approximately $3,300.

    If a "stream" is a single person who listens to the artist in a month, then yeah 400,000 'plays' is a bit onerous.

    If a "stream" is a single song listened to once, and the artist has (say) 10 reasonably popular songs, then only 4,000 fans worldwide listening to each of those songs once every 3 days would be enough for the artist to live comfortably. That doesn't sound too bad.

    • by Firethorn (177587)

      If a "stream" is a single song listened to once, and the artist has (say) 10 reasonably popular songs, then only 4,000 fans worldwide listening to each of those songs once every 3 days would be enough for the artist to live comfortably. That doesn't sound too bad.

      I figured that $3.3k/month for 1 album(~10 songs?) per the article was a touch high, but you mention 10 'reasonably popular' songs, and there's usually only one of those per album. So ~100 songs, 10 good enough to listen to fairly frequently, that's about right for a reasonable living, especially if you figure that other revenue streams(live performances, merchandise, other services) pay for the business expenses(studio*, editing, instruments, etc...)

      *It's easier than ever to set up a home studio, but sett

      • Well, one reasonably popular song per album (instead of ten) is the fault of the artist, not the fans. A professional musician needs to be able to work 40 hour weeks for 40 years, just like other professionals, and save for retirement, all while producing work that people want to buy. If they can't do that in their chosen profession, they need to find another profession, and give up music or treat it as a hobby.

        (Yes, this is true for plenty of creativity-based professions too.)

        • by Firethorn (177587)

          I'm not going to go so far as to say they need to work 40-50-40(hours/weeks/years), it's more a contract job. There's plenty of non-standards out there - military, police, and fire fighter careers are often 20 years, and the average NFL career is a mere seven years, and it is indeed possible to save enough to retire in that period if you receive median pay. You just can't live like a NFL star... ;)

          Still, I view it a bit like writing - should the average writer be 'set for life' after writing only one book

  • how are they getting hosed if no one listens to your music? if lady gaga gets more listeners than an indie band why should they get paid the same?

  • by enter to exit (1049190) on Tuesday December 03, 2013 @11:55PM (#45591723)
    So what are the alternatives? They can pull their music out of these services and get $0. If Spotify (and the like) give them more, we pay more. I don't think people are willing to pay more than roughly $10.00 a month for these things.

    Artists will never say they have enough money, and people will never say they want to support artists - that is until they have to put their money where their mouth is. If spotify doubles their fees how many people will stop subscribing? Spotify already pays 70% to artists/their Representatives.

    Content producers don't control their distribution medium anymore and people are used to free (or cheap) content. How much is Art worth? Should a good album make musicians millions? Why? The days of $20.00 albums are over - were they ever justifiable?

    Perhaps Artists should lower their expectations - Artists should be grateful to services like Pandora/Spotify the alternatives aren't great.
    • Correction: ...Artists will never say they have enough money, and people will never stop saying they want to support artists...
  • 400,000 plays?

    Ok, let's stop and think about that for a moment. If you are a serious enough musician that you intend to do this professionally, let's assume you have put up at least 1 album, which for the sake of argument is about 10 songs. Spotify has 24 million active users, http://press.spotify.com/us/information/ [spotify.com]. So to make the 400,000 play cut, about 2% of Spotify's user base has to listen to at least one of your ten songs per month. That does not seem unreasonable to me. If you can't make that cut, t

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      some quick math.....
      Numbers pulled from the web, SEC etc.

      24million active users
      Assume advertising covers itself for free users.

      6,000,000 active monthly pay users

      $15,000,000 @ $5 a month (assuming 3,000,000)
      $30,000,000 @ $10 a month (assuming 3,000,000)
      $45,000,000 / month in cash

      20,000,000 song database

      $2.25 per song per month to split up

      Figure a bell curve distribution of popularity and its easy to see that the vast majority of songs in their library aren't getting much at all.

      48 songs per day (assuming 4 h

  • Supply and demand (Score:4, Insightful)

    by Subm (79417) on Wednesday December 04, 2013 @12:30AM (#45591837)

    Supply and demand aren't exactly on their side either, as there are a lot of people making music out there.

    It's tough to fight supply and demand for pricing.

    On top of that, a lot of guys in bands get groupies, which probably motivates many of them. Throw in free beer and free admission to the clubs they play in and you're going to have a hard time decreasing the supply of music.

  • I should build a rack of VM's and configure them to play my songs over and over and over. that way i could actually make some money on spotify.

  • I'd really want to see some Spotify - Flattr integration (and in that case, better Flattr adoption), so that you could voluntarily and automatically pay more to the artists you listen to. You can replace Flattr here with any "Automatically-share-a-monthly-fee-between-the-artists-you-listen-to System"

    What's does basic Spotify cost? 5€ a month? Out of which maybe 1-2€ go to the artist? If I could direclty add 10€ per month to be spread directly to the artists I listen to as voluntary donations,

  • by Arrepiadd (688829) on Wednesday December 04, 2013 @04:30AM (#45592757)

    Two days ago we had a story about how Iron Maiden is making big bucks by touring and not by selling CDs or whatever. Everyone agreed, back then, that this is the way to make money in the music industry.

    Are we now surprised that no one gets to be a millionaire just out of Spotify?

  • This compared to how most musicians end up owing their traditional record label money by the end of their tour. I think spottify (a service I don't use) sounds like a good deal to me.

  • Arts should never be done for the money. The music industry, especially modern pop, is surely proof if it were needed. Once making money becomes the priority, music is produced according to patterns of what makes money, and this destroys genuine artistic expression. Too many genres with potential are laid waste to once they become popular and big money gets involved. I'd be happy to see the music industry move away from 'record selling' as its primary product to being a distribution
  • by dizzywiggle (3453649) on Wednesday December 04, 2013 @10:53AM (#45594869)

    Spotify has been an interesting experiment for my band, The Wee Lollies (shameless plug - www.theweelollies.com). A single stream garners us a mere $0.0046. Three streams pays out $0.0199. I don't really understand that math, but it is what it is I guess.

    All told for 2013, we've earned about 28 cents from Spotify. Granted, we're not a national band, we're not on a label, and we're probably mediocre by most folks' standards. So people aren't rushing to add us to their playlists.

    So the takeaway for us is that Spotify isn't really an income tool for new bands. You already have to be quite successful for Spotify to give you enough plays to earn enough to pay for, say, lunch at Taco Bell. It's not even a decent exposure tool as our stream count is way low. We really expected more organic plays. We're kind of surprised that that didn't happen.

    At this point we're still on Spotify because, well, why not? As an artist, you want to make it easy for folks to hear your material. But the reality is from a business perspective, it doesn't make sense. After you account for your own time and energy keeping track of everything, it's really a negative return.

  • by Zontar_Thing_From_Ve (949321) on Wednesday December 04, 2013 @10:54AM (#45594873)
    Let me be blunt here. So an indie band that nobody has heard of (Grizzly Bear) and a different indie band that nobody has heard of and which broke up over 20 years ago (Galaxie 500) are complaining that they aren't getting enough money via Spotify. Gee, I don't know, is there any chance that maybe not enough people give a crap about their music to actually listen to it? Grizzly Bear and Galaxie 500 have their supporters, but the truth is that they just aren't all that big. They were mentioned earlier, so I'll use them as an example. If Iron Maiden wants to complain about what Spotify pays them, I'll listen, but if two no name indie bands, one of whom has been disbanded for over 20 years, want to cry about their payments, well, I'm not so interested. Groups like Grizzly Bear and Galaxie 500 are going to starve if they have only royalties to survive on. It's harsh but true.

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