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Release day economics

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Re: Release day economics

#41

Post by iand »

earbitscom wrote: post #39
iand wrote: post #27

Earlier quoted context omitted.

Even though they look like ripoffs with their tiny payments Spotify and other subscription models have a few advantages for the artist over download models. For a start the artist gets paid even if the listener is just trying the track, hates it and never listens again. The main advantage though is the open ended payment model. The OP should compare the 20 year revenue for each track. I listen to some tracks from 199…

There are definitely albums I have listened to so many times that the streaming payments would outperform the purchases, but I've also bought some albums more than once, too! Most people, and most albums, though, are not going to outperform those economics. Simply put, $5-10 a month for access to 15M tracks is a joke and a big loss for the industry. I look forward to the labels realizing it and walking away.

Fair enough, I've bought albums several times (vinyl to cassette to CD to MP3). Don't think I've ever bought an album on the same format twice unless it was by accident. But haven't we all had it with those format switch games? I bought some MP3s, I don't expect ever to buy them again.

BTW, most of those 15M tracks are deep in the long tail of obscurity that would never see the light of day without an all you can eat subscription model.

Re: Release day economics

#42

Post by alex1 »

ivancdg wrote: post #37
alex1 wrote: post #33

I didn't see any mention of songwriting royalties, which can be very significant if they also write their own music. The songwriter/composer of a song (not a recording of a song, but the actual melody, lyrics) gets a performance royalty each time a song is played in "public" (internet and broadcast radio, in the elevator, at a bar, etc). This is the royalty BMI, ASCAP, and SESAC collect. If the song is recorded and s…

All of this is true. However, the implication that an outsider might draw from your comment is that, say, the band that wrote the original post might hope to make those kinds of royalties since they (presumably?) wrote the melody and lyrics to the original song. If they sign to a major label and have a hit that continues to rake in those royalties, that is wonderful. If one of their songs is used in a big Hollywood f…

I didn't mean to paint a rosy economic picture. Sorry if it came out like that.

I just thought people should know the difference between a songwriting royalty and a recording royalty, and what that means for songwriters and recording artists. I also want people to have an idea of exactly how big of a cut publishing companies and record labels take.

Re: Release day economics

#43

Post by burrokeet »

spatten wrote: post #8

I was hoping to see some numbers from emusic in there. I've been paying my monthly subscription for years, and I've always been curious as to how the payout split goes. Does anyone have a link / source / info on this?

eMusic has a fairly low payout compared to other services offering DPDs (digital phonographic downloads aka an mp3 file) - in the range of 10 to 30 cents a track depending on a number of circumstances. On the other hand, they generally do good volume (often number 3 after iTunes and Amazon) and you can look at not distributing on eMusic as an opportunity cost - i.e., persons have paid already for a subscription on eMusic, so they are unlikely to take additional money and buy your music elsewhere if it is not available on eMusic.

eMusic's real fail is that there are one of the very few DSP (internet music retailers) that only account quarterly... almost everyone else is monthly.

Re: Release day economics

#44

Post by earbitscom »

iand wrote: post #41
earbitscom wrote: post #39

Earlier quoted context omitted.

There are definitely albums I have listened to so many times that the streaming payments would outperform the purchases, but I've also bought some albums more than once, too! Most people, and most albums, though, are not going to outperform those economics. Simply put, $5-10 a month for access to 15M tracks is a joke and a big loss for the industry. I look forward to the labels realizing it and walking away.

Fair enough, I've bought albums several times (vinyl to cassette to CD to MP3). Don't think I've ever bought an album on the same format twice unless it was by accident. But haven't we all had it with those format switch games? I bought some MP3s, I don't expect ever to buy them again. BTW, most of those 15M tracks are deep in the long tail of obscurity that would never see the light of day without an all you can eat…

I have re-bought CDs I lost, or albums that got scratched that I loved, or given my copy to people who I wanted to become fans, and then re-bought my own copy.

As for those buried tracks, keep in mind that it's unlikely that Spotify will cut anybody a check for $0.029, or even 10 times that amount. So unless those albums get listened to a lot, they're not any better off in Spotify.

Re: Release day economics

#45

Post by tjogin »

ctdonath wrote: post #29
physcab wrote: post #28

Consider for a moment this alternate viewpoint. What if submitting a song to was kinda like submitting a blog to . You don't get paid for blogging, but if you produce enough good content, you can create an audience and then sell them other things later on. Smart bloggers give out their content for free, then charge for premium services and products like consulting, books, podcasts, screencasts, merch, etc. Seems like…

...and us not-so-great bloggers? like non-hit bands?

They make very little money.

Re: Release day economics

#46

Post by ivancdg »

burrokeet wrote: post #6

If the band members are also the authors/composers of their recorded material, they will receive slightly more than what is suggested here, since they will also be due mechanical and/or performance royalties from various services. That being said, it's the best/worst time to be a musical artist - you can distribute yourself online (the biggest music marketplace) and receive a MUCH larger chunk of the revenue than eve…

It's a fantastic time to be an entrepreneurial, forward-thinking, business-oriented musician.

But that is a fairly small subset of people with the talent set necessary to stand out musically.

The security of the previous set-up is gone but the opportunities are endless.

Does this sound familiar yet?

A generation ago many of the people reading this would be lifers for HP, IBM...now look what you're doing instead?

OK, so you're lifers for Google and Facebook.

You get the point, though.

Re: Release day economics

#47

Post by burrokeet »

runn1ng wrote: post #13

"..., it costs us 35 EUR/year to keep an album on iTunes, Spotify, and Amazon" Why is that? How much do you have to pay Apple, Amazon or Spotify to sell/play your music?

you pay them zero, but from the point of view of TuneCore it costs money to store and deliver your content, account to you, run a website, etc.

Re: Release day economics

#48

Post by ivancdg »

burrokeet wrote: post #38
unohoo wrote: post #30

Earlier quoted context omitted.

>>it takes a label or label-like organization to sell records with the new digital distribution methods and physical media almost on the decline, record labels hardly 'sell records' any more. They just do a huge marketing push for the artist. If indie musicians can figure out a way to market themselves, they really wouldnt need a record label.

sorry but i disagree - that huge marketing push is what sells the records - that is what labels do, whether they are majors or one-person indie labels. "marketing themselves" is a pipe dream that has only worked for a tiny percentage of indie artists - a huge industry has built up around this effort, and just like the major labels made lots of money off of their artists, this industry is making lots of money off thes…

No question that this is true.

And there are a lot of people making a lot of money on selling 'self-marketing opportunities' to independent musicians.

But to compare that industry ('huge'?), in terms of revenue, to what the majors did in their hey-day is an exaggeration.

The model of selling services to indie musicians has not yet surpassed the model of selling music to customers.

But perhaps that's where we're headed? That's a depressing thought.

Re: Release day economics

#49

Post by danielsoneg »

earbitscom wrote: post #39
iand wrote: post #27

Earlier quoted context omitted.

Even though they look like ripoffs with their tiny payments Spotify and other subscription models have a few advantages for the artist over download models. For a start the artist gets paid even if the listener is just trying the track, hates it and never listens again. The main advantage though is the open ended payment model. The OP should compare the 20 year revenue for each track. I listen to some tracks from 199…

There are definitely albums I have listened to so many times that the streaming payments would outperform the purchases, but I've also bought some albums more than once, too! Most people, and most albums, though, are not going to outperform those economics. Simply put, $5-10 a month for access to 15M tracks is a joke and a big loss for the industry. I look forward to the labels realizing it and walking away.

Yeah, but nobody listens to 15M tracks. They listen to a small subset of those tracks, and that subset differs from person to person.

Heck, for fun, let's say you were to listen to music 8 hours a day every day for a month (~30 days) -

  8hrs * 30 days = 240hrs
  (240hrs * 60min/hr) / 3min/song = 4800 songs.
Basically, you're paying $5-10 for a maximum of 4800 songs - or, between $.001 and $.002 per track, if you listen constantly.

Or, from the other side: Spotify's premium is $10/mo, which comes with no ads. They pay $.003 out to each band - let's just pretend they follow Amazon's 'agency' policy of a 70/30 split, so Spotify's making roughly $.001 on each song, and it's costing them $.004 total for that song (hypothetical - just stick with me). If we assume they're not losing money, then an average $10/mo user must listen to at most 2500 songs per month, and if Spotify's costs are higher than $.001 per track, the number goes down.

Point is, the industry's providing _ACCESS_ to 15M tracks, but they're only having to deliver ~2500/mo - but that's a different bundle of 2500 songs for each user. It MAY make sense from their end just to call it 'unlimited' and rely on the fact that the user can't consume music fast enough to really upset the economics for them.

(Incidentally, if you were to decide to listen to each of those 15M songs once, you'd wind up paying:

  15,000,000 Songs * 3min/song = 45,000,000 min
  45,000,000 min = 750000 hrs = 31250 days ~= 1027 months
  1027 months * 10/mo = $10,270
The record labels, then, value their entire collection of music at $10,270 - if you only listen once!)

Re: Release day economics

#50

Post by seabee »

danielsoneg wrote: post #49
earbitscom wrote: post #39

Earlier quoted context omitted.

There are definitely albums I have listened to so many times that the streaming payments would outperform the purchases, but I've also bought some albums more than once, too! Most people, and most albums, though, are not going to outperform those economics. Simply put, $5-10 a month for access to 15M tracks is a joke and a big loss for the industry. I look forward to the labels realizing it and walking away.

Yeah, but nobody listens to 15M tracks. They listen to a small subset of those tracks, and that subset differs from person to person. Heck, for fun, let's say you were to listen to music 8 hours a day every day for a month (~30 days) - 8hrs * 30 days = 240hrs (240hrs * 60min/hr) / 3min/song = 4800 songs. Basically, you're paying $5-10 for a maximum of 4800 songs - or, between $.001 and $.002 per track, if you listen…

That is per person, of course. Multiply by Spotify's million subscribers and you get $10bn of music. Not too shabby.
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