Become a fan of Slashdot on Facebook

 



Forgot your password?
typodupeerror
DEAL: For $25 - Add A Second Phone Number To Your Smartphone for life! Use promo code SLASHDOT25. Also, Slashdot's Facebook page has a chat bot now. Message it for stories and more. Check out the new SourceForge HTML5 Internet speed test! ×
Music The Almighty Buck The Internet

Major Record Labels Keep 73% of Spotify Payouts 157

journovampire sends this report: New record company figures out of France suggest that artists are being paid just 68 cents from every €9.99 monthly music streaming subscription – as major labels keep hold of 73% of payouts from the likes of Spotify. They’re followed by writers/publishers with a 16% share, and then artists – mostly paid by their labels – who get 11%.
This discussion has been archived. No new comments can be posted.

Major Record Labels Keep 73% of Spotify Payouts

Comments Filter:
  • First grab (Score:3, Funny)

    by zoefff ( 61970 ) on Wednesday February 04, 2015 @04:45AM (#48977625)

    mine, mine! ;)

    • Re: (Score:2, Insightful)

      by gnupun ( 752725 )

      Lot of obfuscation in the article... For every 10 euro monthly subscription:
      Spotify gets ?
      Label gets ?
      Aritst gets ?
      Writer/publisher gets ?

      What are the pre-tax amounts in each of these cases (don't care about the post-tax numbers)?

      • 73 + 16 + 11 = 100% Doesn't Spotify keep anything?
      • Re:First grab (Score:5, Informative)

        by Gobelet ( 892738 ) on Wednesday February 04, 2015 @06:05AM (#48977893)

        It's written plain as day in the article, on the SNEP chart.

        For every 9.99€ monthly subscription:

        Spotify or other streaming platforms ("Plateformes") get 2.08€
        Labels ("Producteurs") get 4.56€
        Performers (or artists) ("Artistes interprètes") get 0.68€
        Composers and writers ("Auteurs compositeurs éditeurs") get 1€
        And VAT is 1.67€

        Profit, pre-tax, is as follows:
        Composers and writers ("Auteurs compositeurs éditeurs"): 0.6€
        Performer (or artists) ("Artistes interprètes"): 0.68€

        Labels ("Producteurs"): 0.26€*
        Platforms: 0.1€*

        *Net profit margin estimated at 5% of revenue.

        But if you read the rest of the study, you'll see streaming represents 55% of digital music revenue in France in 2014 (16% total revenue for the industry).

        The music industry market is tanking a bit says the study, but the royalty payouts are stable.

        You'll find the full study here [snepmusique.com].

        • I don't understand this analysis. Why are you showing "profit" as being equal to gross for some stakeholders (Composers, writers, performers), but as only 5% of gross for others (labels and platforms)? And, furthermore, what's up with "estimating" the profit margin at a single number, and then applying that same number to two very different operations (labels vs. platforms)? That looks quite strange.

          • I don't understand this analysis. Why are you showing "profit" as being equal to gross for some stakeholders (Composers, writers, performers), but as only 5% of gross for others (labels and platforms)? And, furthermore, what's up with "estimating" the profit margin at a single number, and then applying that same number to two very different operations (labels vs. platforms)? That looks quite strange.

            The whole focus on "share of profit" in this scenario is one big misdirection. It is of no interest what profit record labels have if their cost level is out of control vs their income and value. The record labels need to seriously adapt their cost levels to a new reality. They've had an extreme golden age in the decades of the CD, but now reality is different, as it was before.

            • By the same token, how much cost do you really have as a record label? Obviously any recording studios, office space, etc. will have a continual cost that needs to be covered as well as any staff (sound engineers, secretaries, agents) that are paid some fixed salary, but beyond that what are their expenses that necessitate extracting so much money from artists?

              If they're worried about their gravy train drying up, tough shit. No one should be obligated to keep paying them money for services that aren't ne
          • by Gobelet ( 892738 )

            They're not my numbers! I just happen to speak French, I translated the graphs as they were created by SNEP.

        • by gnupun ( 752725 )

          Performers (or artists) ("Artistes interprÃtes") get 0.68â
          Composers and writers ("Auteurs compositeurs éditeurs") get 1â
          And VAT is 1.67â

          So the govt, which did not write a single note, nor sing a tune, makes the same amount as the hard working artists on just the pseudo sales tax. It's ridiculous that the people responsible for the actual work are getting paid peanuts, while the "platform providers and distributors" (govt, labels, web radio companies) make the lion's share of a

          • The government provided several services for the composers and recording artists. Examples of such services include protecting them from foreign invasion, maintaining the roads on which their supplies arrive, subsidizing their health care, operating courts of law to enforce their copyrights, operating space exploration programs to provide raw material for space metaphors in the lyrics, and more.

          • Government provided the protection and infrastructure for the marketplace to exist. Or do you think that stuff is free? Taxes suck, but they arent money for nothing.
  • so? (Score:4, Interesting)

    by SuperDre ( 982372 ) on Wednesday February 04, 2015 @04:57AM (#48977671) Homepage

    It's the 'artist' that signed a contract with the company, so he/she knows what he/she gets or doesn't get..
    An artist working for a record company is nothing more than a regular employee..

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      The point of articles like this is to raise awareness so that artists are more aware of what they're getting into before they sign, so that they negotiate better and might refuse offers if that's in their best interest. It's tragic, but too many musicians fall into the trap unaware what it will cost them.

      • Re:so? (Score:5, Insightful)

        by sjames ( 1099 ) on Wednesday February 04, 2015 @05:30AM (#48977773) Homepage Journal

        Not to mention that it informs the citizens who the labels have repeatedly told that they are charging these fees and getting tough on infringement for the benefit of the artists.

      • Re:so? (Score:5, Interesting)

        by hweimer ( 709734 ) on Wednesday February 04, 2015 @07:16AM (#48978161) Homepage

        Well, that's similar to raising awareness among burger flippers so that they negotiate better and refuse offers if necessary. If you want to get your first record deal, then you will have to accept pretty much anything. There are thousands of equally eager and talented musicians round the corner who don't ask such nasty questions. Guess who will get signed in the end?
        Also, note that the reported sums are averages. This means that a handful of top artists actually get a decent cut, while the huge majority of artists actually gets nothing because they first have to pay back the label for recording costs, marketing, any advances the artists have received, etc.

      • Before an artist signs they're usually a nobody who is looking at a future of singing in shitty bars and clubs for a living. It's the major studio that turns them into a star, and, as such, they get a BIG cut of the $ for it. Seems fair to me.

        "You can sign with us and we'll do your PR, get you professional studio time, get you played on every venue, get you on talk shows, etc. And for that we take 90% of the money, but the 10% you get will still make you into a multimillionaire. OR, alternatively, you can k

      • It's not that artists are unaware, but that they have poor bargaining positions. When they have attained some fame, their bargaining position improves somewhat, but the labels will be pushing for the best new thing.

    • by siddesu ( 698447 )

      There was a reason that anti-monopoly and anti-oligopoly legislation was created. The idea is that if one participant in he market is stronger than everybody else and can impose conditions, the 'free' in 'free market' is gone, and the outcome is bad for everyone except the monopolist. This is especially true in markets where the monopoly isn't natural, but bestowed by a law, like the copyrights. The logic is also true for monopsonies, i.e. buyers' markets.

      Too bad that the government doesn't sue large corpo

      • Companies are allowed monopolies over their own products, and no one label actually dominates the music industry - plus the barrier to entry to releasing your own music is very very very low.

        • by siddesu ( 698447 )
          Yeah, there is a huge difference between 5 companies dominating the market vs 1 company dominating the market.
          • Yes, yes there is. Unless you can prove collusion between those 5 companies, then the market is working. It might not be doing what *you* want it to do, but it is working.

            • Unless you can prove collusion between those 5 companies

              You can find evidence of collusion from just the fact that they belong to the record industry trade group IFPI and its national affiliates such as BPI and RIAA.

              • You could level this charge against any industry group....I know its your thing to find holes in arguments and fill them with pointless arguments, but w/e
                • by tepples ( 727027 )

                  I guess it all depends on whether RIAA has acted in restraint of trade. What's the best evidence either way for this?

        • Re:so? (Score:4, Interesting)

          by TheRaven64 ( 641858 ) on Wednesday February 04, 2015 @06:01AM (#48977873) Journal
          The granparent said 'anti-monopoly' and 'anti-oligopoly' (although an oligopoly is more commonly referred to as a cartel these days). The big five record labels definitely count as an oligopoly.
          • Re: (Score:3, Informative)

            A cartel implies collusion - got any evidence of that going on?

            At the end of the day, music is rarely something you can replace 1:1 with another, similar product. You either like song A or song B (or both), but you cant replace song A with song B if you don't like song B. Same goes for artists, TV series, movies etc etc etc.

            So competition in these areas is very very difficult - a label either has the artist, or they don't. And the label has the artist by virtue of the contract that artist willingly signe

            • Re:so? (Score:5, Insightful)

              by The Rizz ( 1319 ) on Wednesday February 04, 2015 @06:36AM (#48977999)

              A cartel implies collusion - got any evidence of that going on?

              Yup. They even named it themselves: The RIAA.

              • That doesn't imply collusion, any more than unions do.

                • Are you implying unions aren't a form of collusion? Just because the way the laws are written excludes their activities doesn't mean they aren't colluding.

                • Unions are indeed a form of collusion. Although society has agreed that unions are a legal form of collusion. They definitely work against the corporations and make them pay more in wages and benefits than they would if their employees are not unionized. Usually this works out better for the employees, but sometimes, the employer decides that they just can't afford what the unions are demanding. In this case they fire everyone and try to hire non-union employees, or they just close up shop completely. Eith
            • by Anonymous Coward
              evidence? All oligopolies will collude in principle; it is the natural state of that business environment. Whether they technically violate laws is an entirely different topic. They work together to keep inflated prices. It happens in every market dominated by few players airlines, auto mfgs, telecom, shipping. Collusion maximizes profits. You would be an idiot if you failed to do it and a bigger idiot if you colluded in an illegal way and got caught.

              Haven't you ever noticed that despite the fact oligar
            • With no market with just a few players there doesn't have to be collusion.

              The supplier makes up the price, demand, and quantity. You have no say in it. This is why during the Great Recession a few years ago you saw software engineers happily taking $40,000 a year. With so many out of work software engineers and a wife ready to leave, repo men in the driveway waiting for you to leave, and the bank threatening to take your home you will do ANYTHING and work at ANY price.

              Likewise in 1999 you commonly saw soft

        • Companies are allowed monopolies over their own products

          So if I write a song, how can I tell whether my song is my own product or whether it's an accidental copy of a substantial portion of someone else's song (the "substantial similarity" test)?

      • You need to study monopolies more. Having a monopoly is not actually illegal. What IS illegal is using your monopoly in one market to leverage another market to the detriment of the market.
    • Imagine now there are only 3 major employers in your country (hypothetical situation here).

      You have your skills. They all say you can't get paid or work for them unless you sign a contract. The contract stipulates $10/hr for your skilled labor, but performance may get you up to $30k a year.

      You have a family to feed so you accept the meager salary as both other employers charge the same through agreements to keep the price low so the CEO and shareholders take your profits.

      Now they say whoops that doesn't cou

  • by toejam13 ( 958243 ) on Wednesday February 04, 2015 @05:00AM (#48977687)

    Music artists have often received little from broadcasting. Historically, they've received the bulk of their money from live performances and merchandise. Most of that broadcast money goes to the studios, the producers, the managers, the studio, the songwriter, agents and lawyers. Singers (if they're not also songwriters) usually come dead last.
    My understanding is that many new artists have come to realize this scam and are starting to avoid the major labels, using alternate channels of distribution instead. It may not sell as much music, but they get a much larger slice of the pie

    • Re: (Score:1, Interesting)

      by Anonymous Coward

      personally I find it somewhat insulting calling many of them artists. yes without a doubt many have a gifted voice or work hard to produce excellent sounds, but they aren't artists. The artists are those that actually write the songs and the music (yes sometimes that is also the singer, but that seems to be a rarity nowadays). most singers are little more than performing puppets.

      • by itzly ( 3699663 ) on Wednesday February 04, 2015 @05:26AM (#48977763)

        Note that the word "artist" usually refers to the autotune operator, not the singer.

      • by bledri ( 1283728 ) on Wednesday February 04, 2015 @05:31AM (#48977775)

        personally I find it somewhat insulting calling many of them artists. yes without a doubt many have a gifted voice or work hard to produce excellent sounds, but they aren't artists. The artists are those that actually write the songs and the music (yes sometimes that is also the singer, but that seems to be a rarity nowadays). most singers are little more than performing puppets.

        Those that can do. Those that can't, teach. Those that can't do or teach, become critics. Performing is an art, no matter how bitter you are.

        • by gnupun ( 752725 )

          Performing is an art, no matter how bitter you are.

          It's more of a skill, and a little bit of art. Composing the melody and writing the lyrics is majority of the artiness of any song.

          • Tell that to any successful comedian.
            In comedy, delivery is everything
            • by The Rizz ( 1319 )

              Tell that to any successful comedian.
              In comedy, delivery is everything

              I'd say the joke is important, too. A bad joke is a bad joke, regardless of delivery. Both are equally important.

              • I disagree, delivery can make even the most mundane statements hilarious.
          • Oh, the vast majority of music scores and poetry would benefit from the makers thinking of it more as skill, and less as art,

      • Do you also think that actors aren't artists, only playwrights? If so, you're using a very uncommon definition.
      • personally I find it somewhat insulting calling many of them artists. yes without a doubt many have a gifted voice or work hard to produce excellent sounds, but they aren't artists. The artists are those that actually write the songs and the music (yes sometimes that is also the singer, but that seems to be a rarity nowadays). most singers are little more than performing puppets.

        Performing puppets, eh?

        So, I'm curious, do you feel Jim Henson is an artist, or is he just some hack who performs with puppets on stage?

        The artist is what is represented in voice and on stage. Many artists have VERY unique voices, and they also have VERY unique tastes. It's not the song itself that makes art. It's the entire presentation.

        If we can't call entertainment sprayed all over the stage in a visual orgasm art, then I don't know what the hell we're doing labeling people who slap paint on a canvas

        • I agree with your point, but Jim Henson was also an writer, and if you ask me a highly original and talented one. The actual performance with the puppets was a small thing of what he made.

      • "personally I find it somewhat insulting calling many of them artists. yes without a doubt many have a gifted voice or work hard to produce excellent sounds, but they aren't artists."

        The performer is just as important as the composer for a good music, I dont know from which planet you came to think such nonsense.
        • by jedidiah ( 1196 )

          This one.

          Those that don't have enough talent to actually create are actually the ones that can be completely taken out of the equation. This is especially true for modern forms of music that aren't dependent on large backing bands full of relatively mediocre performers.

        • by itzly ( 3699663 )

          The performer is just as important as the composer for a good music

          The guy who cleans the blocked sewer pipe is also just as important. Doesn't mean he's an artist.

        • "personally I find it somewhat insulting calling many of them artists. yes without a doubt many have a gifted voice or work hard to produce excellent sounds, but they aren't artists." The performer is just as important as the composer for a good music, I dont know from which planet you came to think such nonsense.

          Where in that quoted section does he say the performer is not as important? He said they weren't the artist. Bit of a difference there.

    • Most of that broadcast money goes to the studios, the producers, the managers, the studio, the songwriter, agents and lawyers. Singers (if they're not also songwriters) usually come dead last.

      Looks like the studios are double-dipping.

    • They get as much penis as they want, in their choice of orifice as long as it's the ass! And they must like it like that, otherwise more of them would strike out on their own on the Internet and cut out the layers of parasitic middlemen between them and their listeners. Of course, then you don't have the vast marketing apparatus behind you and are relying on word of mouth to get around, but I'd be surprised if your garage band didn't get at least as much putting out an electronic tipjar on your youtube vide
  • Wouldn't the "they already got paid for their work" crowd be fine with this kind of arrangement? That's what pirates always say, right? Not that I would agree, of course.
    • by emj ( 15659 )

      "they already got paid for their work" [..] That's what pirates always say, right?

      More and more artist starting from 2004-2010 have produced their own content with little investment from music companies and might not have gotten paid at all by the record company. Many times they get an small advance that is paid of by the royalties, until that advance is paid off they receive no further money. That's going to take a long time if all artists on streaming services have to split 68 cents per month and user.

      • More and more artist starting from 2004-2010 have produced their own content with little investment from music companies and might not have gotten paid at all by the record company.

        Then it is an investment from their own pocket and they certainly want to recoup it with sales.

  • by 91degrees ( 207121 ) on Wednesday February 04, 2015 @05:14AM (#48977723) Journal
    You wouldn't steal an an artist's royalties.

    You wouldn't dodge taxes [linkedin.com]

    You wouldn't install a rootkit on a customer's computerl

    But the Record industry would.

    And just to get the joke out of the way, "You wouldn't shoot a policeman. And then steal his helmet. You wouldn't go to the toilet in his helmet. And then send it to the policeman's grieving widow. And then steal it again!"
    • You wouldn't steal a baby.
    • by c ( 8461 )

      And just to get the joke out of the way, "You wouldn't shoot a policeman. And then steal his helmet. You wouldn't go to the toilet in his helmet. And then send it to the policeman's grieving widow. And then steal it again!"

      Well, of course not. What kind of sick fuck would steal a helmet full of shit?

      • by jeek ( 37349 )

        Busta Rhymes is still looking for his flow, which was apparently stolen shortly before his song "Woo Hah" came out.

  • by Wootery ( 1087023 ) on Wednesday February 04, 2015 @06:15AM (#48977917)

    Spotify explain their revenue-model and payout-model here [spotifyartists.com].

  • by Akratist ( 1080775 ) on Wednesday February 04, 2015 @08:23AM (#48978385)
    I thought this story was interesting, especially in light of the story a day or two ago about how there weren't any torrents for newly released music on TPB (with all the caveats that came with TFA). The barrier to entry for music production, or really, any kind of entertainment media, has been steadily dropping, to where the reproduction of the created content is almost effortless. Anyone can have a band in their garage and produce halfway decent sounding music, if they're willing to put the time and effort in to create something. A person can write and publish a novel electronically and do fairly well with it. The barrier to game production, in terms of financial outlays, is essentially gone. It's the same use of technology as a multiplier which enabled the information revolution in the first place, with the creation of the printing press. However, what all of those efforts don't have is a solid and pervasive marketing campaign behind them, and that's what a major artist for a major label is "buying" when they get a pittance out of their music being played someplace, or what a game studio or author gets when they are able to sign a deal with a publisher. Let's face it -- production costs are largely nil, but it's the ability to get the word out about something, and like them or hate them, this is what marketers do, and they don't work for cheap. I don't really see the situation going away -- they are a lot of people creating niche media, but there is still money to be made in mass market production. (yes, there are some things I haven't covered, such as the staggering cost of creating a movie or AAA game, and a need to make a profit on them, but I can paint with as broad a brush as I want on a comment board)
    • by msobkow ( 48369 )

      The fact that it's marketing droids making the difference explains why 99% of modern "music" all sounds the same to me. There is no room for creativity and art in the corporate board rooms where the decisions to make or break a musician are made; no, what matters there is the statistics of market share.

      That's not to say there weren't a lot of "sound alike" bands in my younger days, but there sure did seem to be more variety of style for those who broke out of the mold of their times.

      • Yeah, you're spot on with this and why most of the music I listen do has never even come before a company exec. Frank Zappa did a great interview on this very topic, talking about the dynamics of the old execs who were willing to give anything a shot and see if it stuck, versus the newer guys (back in the 80s at this point) who would not take a chance on anything, because it meant admitting they didn't know everything there was to know about music.
  • If they agreed a certain level of royalties from sales then that's what they'll get. If they sold the rights to the label outright, they'll get nothing at all. You can't make a contract then whine and bitch about it when you get exactly what you signed up to.
    • by gstoddart ( 321705 ) on Wednesday February 04, 2015 @09:22AM (#48978657) Homepage

      Well, one can point out that the record companies have been pushing predatory contracts on artists for decades, and giving them little choice.

      Seriously, if the *AAs are going to heavily run this "listening is theft" crap campaign and then keep all of the damned money .. then as much as it screws the artists even more, it's almost a moral imperative to rip off the record companies even more.

      The theft is by major corporations who act like they've done something to earn this money and should be earning it in perpetuity.

      And one of the problems with these contracts is at the time they were signed nobody had even THOUGHT of how the royalties for streaming would work -- or thought of streaming at all in many cases. The record companies defined that to be the one which gets the artists the least possible money.

      Essentially the record companies have stacked the deck so badly that the game is unwinnable.

      • But they have done something to earn it. They provide artists with a lot of up-front capital, and in exchange, indenture them into a life of servitude.

        I'm not at all saying that it is ethical, but it certainly has been proven to be a good business model. You may not like what the record industries do (who does?), but to say that they haven't done anything to earn the money is kind of naive. They function very similarly to a bank. If you don't like how they operate, go elsewhere. But the matter of fact is t
        • This. The record companies are in the VC business - they make a lot of small bets on artists and hope for the 100x payoff, since they really don't know which of the flakes they've signed is going to hit big. That being said, nowadays it's really a pretty low-margin business for everyone involved. I sure as hell wouldn't invest in a record label.

          I also wouldn't sign a deal other than a 360 with a label these days, because with a simple record deal you get close to nada and end up owing the company in most ca

  • Why does any sensible person support these assholes? I sure as hell don't!
    • by ruir ( 2709173 )
      I have a far better question than that, and the one and truly reason why the media conglomerates have been fighting "piracy". Why do we need the greedy middle man in this equation. Why in an age where the world is interconnected, the writers, musicians, programmers, sysadmins and drivers communicate directly with their customer base? Why are we paying 10-20% to the likes of Uber and elance/odesk with them providing little more than an app and/or site for us to communicate? Are we that used to being screwed,
      • >Why are we paying 10-20% to the likes of Uber and elance/odesk with them providing little more than an app and/or site for us to communicate?

        Because you're not going to look through a million sources with a million different interfaces to find what you want.

        People want to go to one or two places (real or virtual) that they more or less trust (where "trust" means "have confidence that you can predict what you'll get").

        A middle-man may do a bad job of protecting you from bad products and services, but it'

  • Writers do not get "16%"...if you are very famous you might get 10%-15%, the rest gets 5%...and before the Internet came along, with traditional print, you had to invest yourself and mortgage your home to pay the cost of the 1st edition out of your own pocket. If it sold, well, you could keep up your 5%, if not you would lose your home.
  • I don't think the entire 9.99EUR goes to the labels for distirbution. Spotify needs to keep some of that in order to run their operations, and I can't imagine that's cheap.

    • by Anonymous Coward

      According to the article, Spotify charges 2.08 Euro out of the 9.99.

  • Dinosaurs will die (Score:4, Insightful)

    by bulled ( 956533 ) on Wednesday February 04, 2015 @10:59AM (#48979411)
    NoFX said it best live even [youtube.com]
  • The writers are also artists for a given work.

    Publishers and labels? Not so much.

When it is incorrect, it is, at least *authoritatively* incorrect. -- Hitchiker's Guide To The Galaxy

Working...