Spotify - anyone heard of it?

And, I don't know, to me the $25-30 per person amount feels more abstract. I'm not sure why I should figure into the equation all the people who spent nothing at all on music in the LP or CD era.

You're right, I should respond to the actual subject of the thread.

Yes, I have heard of Spotify.

what is the larger conversation/issue you need addressed? glenn's post was not at all 'leaping in'. people were posting about that link.

it's been said, but the debate over how big a royalty spotify should give, to which spotify happily responds that it gives the overwhelming majority to "rights holders" ignores a) the lack of transparency on how the money is partitioned to the various rights holders, b) who the rights holders are, c) the relationship of spotify to the rights holders and d) whether the money is given to the rights holders in a manner that allows them to leave out the content creators. to ignore the collusion with the majors through advances and equity renders the remaining discussion purely theoretical.

this has been discussed considerably, and for an employee of the company in question to show up in the midst of this to debate with a blog post, and then huff when people call out the irony shows the disingenuous, selective aggrievement that the ceo drops on the regular.

first sentence should say "the overwhelming majority of the revenue"

Thinking about it some more, I guess the different universe of choice is that any subscriber can play any song at any time and this is a far larger pool of potential listeners than the people who could play the song previously (which would consist only of people who bought the album or single and their little brother). So, the argument then would be that Spotify pays less than the old model because of the greater convenience by which a larger pool of people can and will play songs.

There is a logic to that but I have no idea where that leads someone in determining what the actual numbers should be.

An employee of a major label with info about their part in this would be a good addition to this discussion, I agree.

I'm not involved in business discussions with labels, and presumably couldn't tell you much if I were. But obviously there is a long history there that predates streaming.

i can't imagine enough ppl are listening to hozier's "take me to church" on spotify to make it worth all these primetime commercials i keep seeing for it

I get confused when we talk about comparing dollars per individual track stream, versus dollars per listen to tracks on a CD you bought. I'm not sure why they should be compared really, when the topic of the conversation is whether the system makes it economically viable to be a recording artist. If you bought a CD, some portion of that money went to the label and some portion went to the artist, and somehow (in combination with touring and t-shirts and guest appearances in CD-ROM video games etc.) it was enough that many artists could stay in business, even artists who weren't very good, and even indie acts. And that transaction, which on the evidence worked out better for the bands than the streaming universe of today does, was effectively complete when the CD was bought. The band got whatever their cut was, and the consumer got the CD. It doesn't matter whether the consumer listened to it once or a million bajillion times, or threw it out the car window on the way home.

The only scenarios (in my mind) where this starts to look less than equitable are

(a) where the royalty structure was a bullshit ripoff for the band, which obviously happened a lot and shouldn't be discounted
(b) where the CD sucks and it wasn't worth it - not a big deal in the grand scheme of things, and that was what reviews and stuff were for,

and (c) where, and this I think is what timellison is hypothesizing a few posts up, the person listens to the CD too many times, and the artist would have actually made more money on streaming. Okay sure, but how often would this ever possibly happen, given that .0007 number? Even Taylor Swift, who is a huge star with a grab-bag's worth of catalog gold, has determined that this does not work for her. The idea also casts artists as curiously risk-taking: the chance of scoring a bunch of "Ain't Too Proud to Begs" is, er, sort of low, right? Like basically the odds of "will I be as successful as Taylor Swift"? And if you go for that, in the meantime you say goodbye to all those upfront sales of a whole album of material. I'm probably just out of my depth here though.

If the average royalty rate for a major label $16.98 CD was a dollar, it's easy to calculate how many song streams on Spotify generate more than that. The answer is that you would need at least 143 song streams to generate more than a dollar in revenue.

But that's a dollar in revenue that goes to the label. If the label pays the artist 20% of what they get from Spotify, then an artist now needs at least 715 streams to make the same dollar they earned from the sale of one CD.

I hate to interrupt, and I for one think these are great posts, but the one thing performance-wise that irritates me - since you mentioned "Take Me to Church"...I hate being interrupted during a session of obscure minimal techno with, like, two Bruno Mars songs that stylistically have nothing to do with what I like. Plus screamy pop tracks when I'm in the middle of some cool disco.

This seems relatively new behavior, it seems crappy and anti-music fan. We all heard that radio crap they keep pushing. Electronic selections are terrible.

Also, I have to laugh, half the damn ads are for Spotify, what they can't sell enough ads?

Well, less-terrible algorithmic suggestions actually are in my sphere! Tell me more. We're you listening to a playlist or artist radio or what? And which one, and what bad tracks came on? And were you on mobile or desktop, free or premium?

Or just take notes the next time it happens. Post here or email me (glennm at spotify), whichever you prefer.

The one big negative about going to the premium account, aside from the fact that there is now no apparent way to view other account types or access the student discount: I feel totally cut off from any exciting developments in the field of advanced auto parts.

As I said, there is a number that exists for how many song plays was averaged for every retail priced CD that was sold in the CD era. If I estimate that at a number that everyone agrees is fair to the consumer, and Spotify's payment structure does not match up to that, I think that's a problem area.

spotify's payment structure can't be based on that, though. it has to be based on how much money spotify actually has. which is an entirely different question.

it seems odd to me that people like taylor swift, who is part of the universal music distribution system, are directing all of their anger at spotify rather than at the major music distributors, like universal music, that negotiated the exact rates that spotify is now paying her. and universal had all the leverage in the world when these negotiations happened. spotify wouldn't have lasted a week without their content.

Did she actually point the finger at spotify's royalty rates? I thought it was about the lack of a premium tier (meaning albums could only be heard by paying customers), rewarding folks willing to pay full price, etc.

Any major label artist making a "spotify has so much, we have so little" claim is ignoring the middle man, that's for sure.

I think the key difference between CD plays and Spotify plays is that you got no CD plays from all the people who didn't buy your CD. If the average music buyer bought 2 CDs a year, you had only those 2 chances to hit the $1 jackpot. Spotify is trying to both increase the total amount of prize money and distribute it more broadly. I think almost by definition this has to shift some money from the most popular artists to the next tier. (Especially if the occasional super-popular artist magnanimously removes her music from Spotify to give other artists a chance.)

But it also seems quite possible to me that there are artists who disproportionately appeal to the sort of people who used to buy 20 or 50 CDs a year, not 2, and if those people are now only spending $120, the bands they stream are getting less from them. But here too the idea, at least, is that you can reach the larger audience of people who listen to your kind of thing. But that's bound to work out better for some artists than others. And it definitely seems like it has the potential to penalize artists that people don't listen to so often or so repeatedly.

Did she actually point the finger at spotify's royalty rates? I thought it was about the lack of a premium tier (meaning albums could only be heard by paying customers), rewarding folks willing to pay full price, etc.

the head of her label, scott borchetta, brought up the premium tier thing specifically. taylor has pointed several fingers, including at how much money spotify pays.

I honestly do not give a shit whether Spotify royalty rates reduce the number of millions of dollars a year Taylor Swift makes.

The key thing for me is this (from the Ribot piece)

Indie artists may only constitute 38 percent of market share, but they represent well over 90 percent of working musicians, and a great majority of works released.

And this isn't Spotify's fault. Other streaming services pay similarly. It's a step up from not getting paid at all for people listening to music online/downloading/etc. Ideally, musicians would get paid more by Spotify and these services, but I feel like the harsh truth is at this point, if something isn't easily accessible online for free, people will just listen to something else. And to Spotify's credit, they actually pay based on what people actually listen to as opposed to ASCAP where they use questionable formulas to distribute money collected from royalty payers.

I'm actually quite surprised that Spotify isn't offering premium-only content at this stage, especially for something as obviously massive as the Taylor album.

Glenn, I was listening to electronic comps - not radio. Also electronic albums. I use the free service. It would be nice to have electronic or dance instead of pop tracks I've already heard.

when you have a fairly hefty % of the 20th century's recorded music available, paying extra for a few more albums seems like a bad decision. there are actually very few artists w/ much leverage for that reason, oh no the eagles are gone I guess I will listen to one million other things.

like, the single most successful musician in america currently has some leverage but not even that much.

like nobody wants to have the discussion 'how much recorded music should be produced?' and it sounds kinda awful to say 'there are probably too many artists'.

if the amount that should be made is always going to be dependent on market forces, then the answer should probably be 'less'.

Earlier this week, Spotify CEO Daniel Ek suggested in a lengthy response that Swift would’ve been on track to earn $6 million a year from the streaming provider. Now both sides are acknowledging Swift’s actual Spotify earnings have been much less than that, which means the other 99.999 percent of recording acts are earning much, much less.

In Taylor Swift-Spotify Debate, Sparks Fly Over Numbers

considering the number fudging coming from both sides of the debate, i wish people would stop jerking off trying to make their own calculations off the scraps provided and accept a few key concepts - renting your music out gets you less than selling it, renting your music gets you more than nothing, etc - so we could stop pretending there's some magic number where everyone gets a fair share. The game is RIGGED. And while it was rigged before spotify showed up, spotify accepted deals that mean even if your label is a profit-sharing bohemian dream, the service itself is set to benefit the major labels through your involvement. Superchunk putting all their album on spotify means a) only patricians and album art addicts need buy them and b) the service gets a tiny bit closer to having the monopoly on the market it needs to reach that IPO/buyout stage where they and the major labels reap a payday unrelated to royalties.

If your response to this is "well sure who knows what's going on with the numbers but in a dream world where streaming is the only option let's see a CD gets say 8 spins..." you need to accept that Spotify, through the nature of the compromises it made to get the major label catalog, is NOT that dream world. "How would artists survive through streaming" and "how would artists survive through spotify" are not the same things.

the irony of the "yes but piracy" argument is that the ceos of spotify and bittorrent CAME from the piracy-driven tech world. They're like mobsters trying to go legit. They know the companies they came up through could be decimated through lawsuits and other legal actions, so they're trying to make a deal with multinationals where both get rich and nobody goes to jail. But the idea that these guys are devoted to making sure artists can survive is absurd considering they came a world where artists' rights meant even less.

accept a few key concepts - renting your music out gets you less than selling it

As I've said, I'm not at all sure that that's true of the situation right now with catalog items.

i've accepted that

and my idea of treating streaming like a jukebox rather than a surrogate for album sales actually acknowledges the hypothetical that the "rights holders" of a temptations hit might get more from leaving it on spotify than taking it off.

but the idea that fugazi gets more from putting the whole of end hits on spotify than they would from just putting up three tracks and forcing fans to buy the rest is pretty nuts

Thread Assessment Division: ah, thanks. The extra tracks you get on the free service are due for some improvement. If you feel like it you might want to try artist radio again, as we've made some changes to that very recently. And/or check out everynoise.com for a lot of genre-based playlists that ought to pretty internally consistent...

interesting stuff on this thread, but good lord, spotify/streaming discussions mainly just make me feel depressed

where does Bandcamp fit in with all of this? is their free streaming bitrate comparable to free Spotify? I know that Edward from the Legendary Pink Dots said they are making enough to live on off of their Bandcamp page, fwiw, but they are an "established" band.

^ I was wondering about the economics of bandcamp too, not so much the streaming side of things but it seems to be the digital distribution method of choice for a lot of the non-major label Australian music I listen to

http://basca.org.uk/2014/11/13/basca-supports-taylor-swift-in-spotify-action/

Ivor Novello Awards Chairman Gary Osborne (whose songs include Elton John’s Blue Eyes) comments, “No matter how bad it is for the artists it’s a whole lot worse for the writers! People don’t understand the difference between the writer and the act, but artists receive a far higher income from streaming than the people who write the songs. This is because deals were done first with the record labels that represent the artists, after which a few scraps seem to have been tossed to the songwriters and their publishers as an afterthought.”

^^important point that i haven't seen noted too much

it should be noted, on the other hand, that terrestrial radio (at least in the u.s.) is really good for the writers and really bad for the artists, and that is unlikely to ever change because the radio lobby is still a lot more powerful than the streaming lobby.

Really enjoyed Albini's take here: http://www.theguardian.com/music/2014/nov/17/steve-albinis-keynote-address-at-face-the-music-in-full

How to make Spotify fairer:

https://medium.com/cuepoint/how-to-make-streaming-royalties-fair-er-8b38cd862f66

(it's really easy)

The argument in that Medium piece has some aspects in common with David Lowery's argument here [http://www.salon.com/2014/08/31/david_lowery_heres_how_pandora_is_destroying_musicians/] that music people don't listen to very much should be more expensive than music people listen to a lot. I don't think "fairness" is really the justification for this.

In addition to the basic problem that all the numbers in the Medium piece are literally made up, it totally ignores the fact that about 75% of Spotify listeners are paying for their music by being advertised to, not through subscriptions, and thus generate more net revenue by listening more, not less.

i love it when glenn brings the knowledge

"that music people don't listen to very much should be more expensive"

Subscription is a flat rate - no music costs the consumer more than any other. Surely it's a fair point that me spending £120 a year without listening to Taylor Swift shouldn't result in her getting more of that money than anyone I do listen to?

Using spotify and other streaming services seems just as immoral as using torrents or soulseek. The difference is that I'm just paying a company to do the same thing legally. The artists still don't get shit. I can't figure out why the labels ever agreed to this.

If Spotify is as immoral as illegal downloading, then shopping at a store is as immoral as stealing.

Which you could argue, of course, on the same grounds: distributors taking too much of the money that "should" go to the original workers. But blaming Spotify for the artist inequities in the major-label music business misses pretty much every important point. In order to exist legally and have a plausible library in 2014, any music service has to deal with the major labels. But it's a pretty big collective victory that you can GET onto all major online music services without signing with a major label.

I was looking at the website of a "digital music distributor" today. It seems like a bit of a rip off. Can artists deal directly with streaming services, or do they need to use a distributor?

"But blaming Spotify for the artist inequities in the major-label music business misses pretty much every important point."

Huh? Spotify and the labels agree to a payout rate. How are they not implicated?

For Spotify, at least, you still currently need a distributor, but there are some pretty low-cost options. I don't have any experience with them personally, but I think I was leaning towards OneRPM.

calstars, I feel pretty comfortable at this point that Spotify is paying its way adequately, in overall rate terms. But whether that money gets from the labels to individual artists is another question. And whether streaming is better or worse than the old world for individual artists is another whole set of questions. And what Spotify, or any other service, could do differently in the future is yet another set.

But it's a pretty big collective victory that you can GET onto all major online music services without signing with a major label.

no it's not. the privilege of being on a digital distribution platform whose royalty accounting primarily rewards the biggest "rights holders," who also happen to be equity shareholders in the platform, is not a "big collective victory." It is a concession to the times and the economy that some independent artists have chosen to make.

this whole "if we ignore this issue, this issue, this issue and this issue, spotify is totally fair" stance is such a joke.

by the nature of the deals made, spotify and the major labels cannot be treated as independent agents

Go try to get your movie into theaters, or your show on TV. Or your song on commercial radio or your CD into Best Buy.

Yes, it's true that the most popular artists make more money. That's always been true. Were you hoping for streaming socialism?