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Why Spotify Pays So Little

lit.vulf.de

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Re: Why Spotify Pays So Little

#141

Post by rlonstein »

matthiasv wrote: post #28
kfor wrote: post #2

Vulfpeck is also the band behind Sleepify[1], the album of ten silent 30s songs which fans looped on Spotify while they slept. Vulfpeck earned $20k as a result and used it to organize a tour. [1] http://en.wikipedia.org/wiki/Sleepify

Vulfpeck is also the hottest funk band that currently rocks this planet. But as it seems, I should rather purchase their albums from Bandcamp than streaming them via Spotify.

Listened on youtube, bought on Bandcamp. You're right, they are good.

Thanks for the suggestion.

Re: Why Spotify Pays So Little

#142

Post by tomjen3 »

6stringmerc wrote: post #46
tpeaton wrote: post #6

Spotify has been villified since the beginning, and I certainly want a more fair system to exist for artists. That said, has there EVER been a business model in the US that was profitable for artists? I don't think there was ever money in music for artists from album sales. The cost of distributing and promoting music is just more expensive than making an album.

In my experience, while Spotify pays little outright, it is one of the few services that genuinely provides exposure in a beneficial way, one that may actually correlate to iTunes sales. That mentioned, Spotify deserves credit for paying anything, rather than sitting around and saying that exposure itself is a tangible payment form (e.g. McDonalds & SXSW). As Spotify expands, I can genuinely see new nations discoveri…

This. I signed up for spotify for the convinience and it is far too expensive, but it did help me actually find artists that I cared to hear.

However they also have some pretty giant omissions and even for the top tier track they are very hostile to their users, which means I am looking for something better.

Re: Why Spotify Pays So Little

#143

Post by CaveTech »

tormeh wrote: post #140
pdpi wrote: post #77

Earlier quoted context omitted.

> A subsidy of popular music by indie fans That's an interesting problem — this is only true if indie fans listen to less music than pop fans. Imagine there are 10 users, 9 of whom only listen to pop, one only listens to indy, all of whom pay 10$. Now consider two scenarios: A. everybody listens to 100 tracks per month, or B. pop listeners stream 110 tracks per month, and the indy listener streams 10 track per month…

>unless indie fans listen to less music than mainstream music fans That point is explicitly addressed in the post. Mainstream users listen more because mainstream users are gyms etc. that just let the top 40 run in shuffle 24/7.

I have trouble believing that commercial venues make the majority of the plays on Spotify.

Re: Why Spotify Pays So Little

#144

Post by adamc »

ScottWhigham wrote: post #113
adamc wrote: post #101

Old geezer here: Does anyone know how often the songs on a CD are played? If I spent $10 on a CD, what was that likely to generate per-play? (I'm old enough that I remember taping LPs and then listening to the tapes -- which was a near-universal practice amongst the folks I knew.) My guess is that great albums got listened to a lot -- driving down the revenue "per play" but generating great word of mouth and lots of…

I'm happy to play along but first can you give us an idea of the answer(s) will relate to the topic at hand? I'm struggling to find a correlation.

I thought it would be interesting to get some kind of historical fix on whether this is really an unfair rate per song, and if so by how much. I'm also curious as to whether "per play" is really the right metric: if I sold you a CD and it sucked, you'd almost never play it so that rate might seem high... but be unimportant because you'd sell so few CDs. How does that translate to the Spotify model?

Maybe this is obvious to others? But not to me.

Re: Why Spotify Pays So Little

#145

Post by tomjen3 »

pqomdv wrote: post #128
kazinator wrote: post #122

The proposition in the article only works because users pay a fixed monthly rate for unlimited listening, rather than a charge that is metered based on how much they stream. Jack Stratton's proposition is wagered on the proposition that the users who listen to his tracks are ones who don't listen to very much other stuff. His listeners pay $9.99 per months, but don't stream very much, and a big chunk of what they do…

3.5$ per user(!, or should I say a fan ) is significantly more than just negligible compared with fractions of a cent for every user. It is also more correct, your subscription is distributed to artists whose music you actually listened to. It repeat listens are accounted for, then it would be even more fair, since you usually listen more to your favorite artists. Currently the distribution just isn't correct. This i…

Agreed. It would make it possible for a much more democratic music system where the dedication of your fans matters more than sheer numbers.

Re: Why Spotify Pays So Little

#146

Post by exelius »

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…

This is the same problem that any unlimited service has to deal with. Why does a user who downloads 10GB of data per month on their cable modem have to pay the same price as a user who downloads 300GB? They're subsidizing his usage! Why should I have to pay the same price as everyone else for Netflix when I really only ever watch House of Cards?

The reason Spotify specifically works this way is because any other reimbursement model is untenable in the streaming world. Rev share works "off the top" because the overhead of managing reimbursement (specifically the audit overhead) at the subscriber level would wipe away too much margin. Pandora had an overly complicated revenue sharing scheme and it nearly bankrupted the company until they moved to a model closer to Spotify's.

But more specifically, revenue share works this way because that's how it's defined in the contracts that both the major label and the indie label signed. If the indie labels thought it was a terrible idea, they wouldn't have signed it. Most indie artists anymore simply expect to make next to nothing on distribution and playback of their music: they make their money on the live shows.

Re: Why Spotify Pays So Little

#147

Post by [deleted] »

kfor wrote: post #2

Vulfpeck is also the band behind Sleepify[1], the album of ten silent 30s songs which fans looped on Spotify while they slept. Vulfpeck earned $20k as a result and used it to organize a tour. [1] http://en.wikipedia.org/wiki/Sleepify

[deleted]

Re: Why Spotify Pays So Little

#148

Post by exelius »

rwissmann wrote: post #129
pdpi wrote: post #77

Earlier quoted context omitted.

> A subsidy of popular music by indie fans That's an interesting problem — this is only true if indie fans listen to less music than pop fans. Imagine there are 10 users, 9 of whom only listen to pop, one only listens to indy, all of whom pay 10$. Now consider two scenarios: A. everybody listens to 100 tracks per month, or B. pop listeners stream 110 tracks per month, and the indy listener streams 10 track per month…

Yes, the article really missed this point. One could also mentioned some sort of tiered payout scheme or a non-linear minimum after a certain amount of plays plus a percentage above that. Likely something that Spotify will experiment with over the years.

I doubt it. The business overhead of distributing payment this way is enormous. Right now, Spotify just runs a report that takes some top level numbers, splits them out by copyright owner and divides a single pool of money. This means they manage only as many pools of money as they have copyright owners.

If they start doing it the way OP suggests, they DRAMATICALLY increase the number of pools of money they manage (and thus, would need to audit). They'd now be managing (number of copyright owners) * (number of subscribers) pools of money, which is a lot more. Additionally, they likely have some errors in their data, and the impact of an error in this scheme is huge.

tldr: It's too much work for too little money. Improved technology will not change anything because it's a finance process problem, and finance processes have to be regularly audited. The more complicated it is, the more expensive it is to audit.

Re: Why Spotify Pays So Little

#149

Post by nissehulth »

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…

This is how a large chunk of music royalty distribution works. For example, fees collected from restaurants, shops and other public places basically ends up in a large bucket.

Later the funds are being distributed after "market share", which means most of it will be sent to Taylor Swift or the Michael Jackson estate, even if the restaurant played nothing but epic fusion mathcore.

I'm guessing that the "big five" asked for a model similar to this when Spotify started, because it was a model they understood.

Re: Why Spotify Pays So Little

#150

Post by cwyers »

ikt wrote: post #69
cwyers wrote: post #5

Earlier quoted context omitted.

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…

I think there certainly is a lower rate for radio -- I think Spotify gets Pandora-like rates for Spotify Radio, which I believe are lower than the rates they pay for their normal music streaming. I don't think there are different rates for free and paid streamers, though.
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