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Why Spotify Pays So Little

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Re: Why Spotify Pays So Little

#211

Post by jjcm »

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…

Rather than guess what the number of plays is, I think what's more valuable is to see what the break even point is.

Assuming 12 songs on a CD, and that each CD costs $2 to print, distribute, and account for merchant margins, that gives us effectively $0.66666 per song. At the rate of $0.00786 per play on spotify, you'd have to play each song on your physical CD 84 times (or 1018 plays across varied tracks) before it produced less revenue for the artist than a play on spotify.

I'm guestimating here, but I'd say that in general artists/record companies benefit more from CD sales based on those numbers.

Re: Why Spotify Pays So Little

#212

Post by Consultant32452 »

lambeosaurus wrote: post #168
niels_olson wrote: post #131

Earlier quoted context omitted.

I don't have to listen to it consecutively. But I listen while driving, while studying, while working. I certainly fall in the category of indie fan listening to a lot of music from catalog artists, not hit makers.

Another checking in. Guilty as charged. My main gripe is that because of this stupid model, it pushes a lot of the artists I would listen to away from spotify because it doesn't connect them directly with the revenue stream they should be getting from their true fans. Artists have a hard time surviving without that.

That's because the indie artists aren't looking at the big picture. They would be getting less than they hoped for from the Spotify model, but now you will likely never even hear about them. They're significantly hindering their growth potential and ability to sell concert tickets.

Re: Why Spotify Pays So Little

#213

Post by dlebech »

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…

Indeed, a casual listener like myself is basically paying money to the top artists while not listening which is a bit absurd. It is a problem that should be possible to at least partly resolve by calculating artist market share without a bias towards users that have Shopify open all the time. Incidentally, I blogged about this some time ago: https://davidlebech.com/thoughtflow/spotify-royalties/

Re: Why Spotify Pays So Little

#214

Post by Dylan16807 »

genericuser wrote: post #171
mark-r wrote: post #158

Earlier quoted context omitted.

It's a zero sum game. Spotify isn't going to pay any more in total, no matter how the rules change. That means for every winner under a new scheme, there will be a loser. If those losers are the popular artists that the service can't exist without, you have a non-starter.

Wow great catch on the the fact that any system that results in necessary artists being payed less, simply won't happen if Spotify wants to continue existing. Really applies to the entire scope of the article and not just the comment you replied to.

That assumes that those artists are already on the verge of quitting spotify, which is a bad omen for the continued existence no matter what.

Re: Why Spotify Pays So Little

#215

Post by bsder »

snowwrestler wrote: post #175
6stringmerc wrote: post #52

Earlier quoted context omitted.

No, whatever money is paid up front for the expenses (recording, shooting music video, child care while doing such things) must be repaid to the label. If you don't "recoup" enough through album sales, you have to pay them back out of touring...and on and on and on...Basically, just have a look at the following article by Steve Albini: http://www.negativland.com/news/?page_id=17

My brother has been a professional rock musician for almost two decades. Several of his bands have broken up after one or two albums, the recording of which was financed by their label. In those cases, the label simply takes a loss. They're not sending debt collectors out or something. The recouping terms are set in the contract. It's not conceptually different from the term sheets that govern how and when investors…

> These are the folks--the good, artist-supporting folks--who are being most hurt by piracy.

As much as I hate pirates, it isn't the pirates that killed the music industry.

Look at this thread. Most of the people here are not going to spend more than $100 per year on music. That's simply too small a pool for the number of artists that exist.

Think about these same people. They are willing to pay more than $100 for two video games.

Guess which industry is doing better?

Re: Why Spotify Pays So Little

#216

Post by sampo »

mkolodny wrote: post #107
genericuser wrote: post #66

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 fol…

Complex accounting isn't a good reason to pay artists unfairly. Having said that, the accounting doesn't have to be that complex: 1. When paying out an artist, list out the (anonymous) users who listened to their music on Spotify. 2. For each user: a) Show the what percent of the user's total listening was spent listening to that artist. (e.g. 40%) b) Multiply the amount the user paid by the percentage from (a). (e.g…

> Complex accounting isn't a good reason to pay artists unfairly.

But is it Spotify that pays the artists unfairly? AFAIK, Spotify pays to the record labels, and then it is up to the record label, how they distribute the money to the artists? (Also some of the money, the labels keep them selves, and do not distribute to artists.)

Re: Why Spotify Pays So Little

#217

Post by Dylan16807 »

genericuser wrote: post #109
mkolodny wrote: post #107

Earlier quoted context omitted.

Complex accounting isn't a good reason to pay artists unfairly. Having said that, the accounting doesn't have to be that complex: 1. When paying out an artist, list out the (anonymous) users who listened to their music on Spotify. 2. For each user: a) Show the what percent of the user's total listening was spent listening to that artist. (e.g. 40%) b) Multiply the amount the user paid by the percentage from (a). (e.g…

I never said it was a reason to. I simply said this method is anything but simple, as the author called it. Your method would require even more potential lines on the monthly report than the nearly identical method I described above. As yours would require a per user line, even though many of them would have duplicate rates. Keep in mind things would still need to be split per song also, as rights holders vary per so…

The model is extremely simple. The number of formulaic, near-identical lines on an arbitrary report has nothing to do with complexity.

Splitting per song already has to be done. This just gives you a different amount of money to split per song with the existing mechanisms.

Re: Why Spotify Pays So Little

#218

Post by Dylan16807 »

ignostic wrote: post #125
genericuser wrote: post #109

Earlier quoted context omitted.

I never said it was a reason to. I simply said this method is anything but simple, as the author called it. Your method would require even more potential lines on the monthly report than the nearly identical method I described above. As yours would require a per user line, even though many of them would have duplicate rates. Keep in mind things would still need to be split per song also, as rights holders vary per so…

Exactly. Based on data from Spotify[1] and taking an average payment[2] of $.0052, I calculated Spotify would be storing about 20 BILLION accounting records PER MONTH. Showing my work: 15m paying subscribers = ~150m per month, ~105m paid to artists @ .0052 per song = 20.154 million songs in a month. [1] https://press.spotify.com/us/information/ [2] http://thetrichordist.com/2014/11/12/the-streaming-price-bib...

So your argument is that it's unreasonable to store a list of every song play, even though they already do so?

Or that it's unreasonable to make them "accounting records"? Not a problem. They aggregate using the current method to limit the number of "accounting records", they can aggregate just fine using the new method. Have "accounting" start with revenue per song the same way it used to start with listens per song, after asking the database to process its 20 BILLION records.

Re: Why Spotify Pays So Little

#219

Post by tajen »

fragsworth wrote: post #118
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…

> Realistically, it would be both hard to change structurally Perhaps there is a simpler solution. Here's one idea: for accounting purposes, only count a limited number of plays per month, per user. It can be the first 100 plays, or if you want to prevent any biasing, it can be a random sample of 100 of each user's plays. A random sampling can even be audited to prove that it was fair.

Why do we consider that the places who play 24/7 of pop music are biasing the system? If it were 1 cent per play, and Mickael Jackson was played 100 times during the day in one shop... shouldn't they get $1?

Re: Why Spotify Pays So Little

#220

Post by thaumasiotes »

torbit wrote: post #203
exelius wrote: post #146

Earlier quoted context omitted.

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 reim…

I always thought bands make their money on tour. live shows & merch; and the label makes more money from CD & song sells. I guess there is a new type of indie. Those that don't go on tour much and want money?

This can't be all that new. I feel pretty sure that the group of bands who don't go on tour much, and still want money, is basically the same group as "bands who don't go on tour much".
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