Why Spotify Pays So Little • Hacker News Board

Re: Why Spotify Pays So Little

#61

Post by tptacek » Wed, Mar 18, 2015, 5:31 PM UTC

6stringmerc wrote: post #56

tptacek wrote: post #15

Earlier quoted context omitted.

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

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.

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.

Re: Why Spotify Pays So Little

#62

Post by mortenjorck » Wed, Mar 18, 2015, 5:34 PM UTC

pjc50 wrote: post #48

mortenjorck wrote: post #35

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/ ) 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…

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…

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).

Re: Why Spotify Pays So Little

#63

Post by 6stringmerc » Wed, Mar 18, 2015, 5:35 PM UTC

adventured wrote: post #53

tpeaton wrote: post #44

Earlier quoted context omitted.

Yes, but that represents a very small minority of artists. Most lose a lot of money or break even if they're lucky. Check out this article by Pomplamoose, who are a relatively successful band. https://medium.com/@jackconte/pomplamoose-2014-tour-profits-...

I find this to be a good examination article regarding the now infamous Pomplamoose tour breakdown: http://www.artistempathy.com/blog/the-pomplamoose-problem-ar... I think that doing only 24 tour dates as a mid-popularity group, while not exactly managing costs well, to be an obvious setup to lose money. If they want to treat it like a business, they're doing a terrible job of running a business.

No, a terrible job of running a business is what Amanda Palmer did by trying to pay musicians in beer. I'm not a Pomplamoose fan or advocate, but they capitalized better than most could hope for - you know, like The Rembrants? I think you're arguing from a highly biased outlook in that you cite 1% of artists which cater to a monied audience (teenagers dependent on parents, Baby Boomers who have achieved success to afford $50-250 tickets) specifically to discount the realistic percentage that 80% of artists who make any money doing music don't actually make a living doing it.

Re: Why Spotify Pays So Little

#64

Post by dandare » Wed, Mar 18, 2015, 5:35 PM UTC

pjc50 wrote: post #48

mortenjorck wrote: post #35

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/ ) 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…

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…

Can someone please glue this to the top? The whole discussion here is one big straw-man.

Re: Why Spotify Pays So Little

#65

Post by Flimm » Wed, Mar 18, 2015, 5:35 PM UTC

thomasahle wrote: post #24

> 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.

Some small players might not either. It might be working in some small players' favour that less active users are subsidising active users.

Re: Why Spotify Pays So Little

#66

Post by genericuser » Wed, Mar 18, 2015, 5:37 PM UTC

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.

Re: Why Spotify Pays So Little

#67

Post by joshstrange » Wed, Mar 18, 2015, 5:37 PM UTC

vinceguidry wrote: post #43

nicpottier wrote: post #30

Earlier quoted context omitted.

Agreed, I finally admitted last year that I was tired of maintaining my own MP3 library and that $9/mo was a fair enough price to listen to whomever I want. But ya, that sure seems like that should be fair enough and profitable enough for the artists I listen to, so if Spotify isn't doing a good job of making sure that is the case then I hope someone else arrives on the scene who does. After all, switching costs are…

> Agreed, I finally admitted last year that I was tired of maintaining my own MP3 library. If a subscription service could get me out of that chore, I'd do it in a heartbeat. But the music I listen to is crazy all over the place, and if the service doesn't have even one of the songs I want, then it's worthless. Even if I can upload mp3s, now I'm back to maintaining an mp3 library. If I switch services, I have to eith…

I'm hitting this point right now. After years of maintaining an mp3 collection I jumped ship to Spotify to try it out and loved it. It was great that I no longer had to spend any time to get access to the music I loved. Also community playlists were awesome (Especially the Top X Hit playlists that were updated monthly). Spotify even supported Last.FM, I was in heaven... Until Spotify didn't have that 1 song, or that 1 cd, or that 1 artist. That coupled with CONSTANTLY turning explicit music on my playlists to the "clean"/"radio edit" versions pissed me off to no end (I know why this is happening and I find it completely unacceptable).

For the last few months I've been using SoundCloud (Still paying for Spotify for every now and then or when a friend requests a song) for mashups (which are nowhere to be found on Spotify) but the SoundCloud iPhone is shit. It looks nice but whenever iOS knocks it out of memory it forgets where you were were and takes you back to the home screen (Which for long mashups sucks a lot). Furthermore it seems WAY more finicky with network connections than Spotify was. I have to turn off Wifi when I get in my car (from home -> work and from work -> home) because if I don't then SC will try to load over Wifi and I drive out of range almost immediately. Then I have to kill the app and re-launch (and re-navigate to where I was) before it will use my LTE connection. Also the mobile app doesn't scrobble to last.fm (neither does the website but I have chrome extentions for that).

I decided, literally a couple hours ago, that I was sick of this and decided to go back to maintaining my own music collection. I've got to do some research on how best to do this (Subsonic or similar on my home server and an iPhone/OS X that let's me stream+cache and scrobble to last.fm) but I believe it will all pay off in the end. I've found that all of these services (Netflix/Hulu/Spotify/Rdio/etc) are great for getting started but that all comes at a cost and it WILL bite you in the ass one day.

Re: Why Spotify Pays So Little

#68

Post by diminoten » Wed, Mar 18, 2015, 5:38 PM UTC

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).

Re: Why Spotify Pays So Little

#69

Post by ikt » Wed, Mar 18, 2015, 5:38 PM UTC

cwyers wrote: post #5

nicpottier wrote: post #3

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 t…

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…

I'm almost certain free users pay out a lower rate, payout information from Zoe Keating has confirmed that there is a somewhat large disparity between rates even within the same country with no explanation attached, there's only 1 or 2 things it could be. Radio payouts are lower because it constitutes a 'radio play' and therefore gets less than a premium user playing the song on demand so there's definitely variance within the payout rates.

Re: Why Spotify Pays So Little

#70

Post by IanCal » Wed, Mar 18, 2015, 5:38 PM UTC

pjc50 wrote: post #48

mortenjorck wrote: post #35

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/ ) 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…

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…

> 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.

Or split Terry's money between the artists they actually listen to.