
Spotify Saved the Music Industry – Now What? - prostoalex
https://fortune.com/longform/spotify-music-industry-profits-apple-amazon/
======
nabla9
Music market is almost perfectly competitive market. Extremely low margins
should be the norm.

The supply is endless. Talent pool is huge. Millions of amateurs are making
music even if nobody is paying for them and are delighted if someone wants to
listen them. People are willing to take huge pay cut to earn living doing
music and perform in lousy bars.

I think the best model is patronage. Music online is almost completely free
and works as marketing to get people to listen. If people like the music and
want to hear some more, they will pay in advance for musician to produce it
and perform it.

Superstars are somewhat separate category. It's a showbiz and fashion industry
where people like what others like to connect. The product sold is famous
persona with music.

~~~
jamesknelson
Reading this, I found myself nodding along after I replaced:

\- musician to developer

\- online music to open source project

\- performance to consulting/training/conferences

It’s funny thinking about all the similarities between the two.

~~~
username90
The main difference is that you can't easily substitute one piece of code for
another leading to little reuse and huge demand for custom solutions. Songs on
the other hand mostly substitute fine within genres, we could stop producing
music entirely and people would still have more than enough music to keep them
happy.

~~~
hootbootscoot
what a dismal dark musical world this invokes. I suppose this works for people
who don't actually _listen_ to music in any sort of appreciably observant
fashion.

I _get_ that some people basically just vibe along with music and don't hear
the harmonic movement, the intervals, the tones of the instruments.

This point of view gives zero credence the possibility of any actually
original music.

~~~
yourtpmpackager
>the harmonic movement, the intervals, the tones of the instruments

Are you a boomer? These days nobody respectable listens to music where those
things are present and IMO that's a good thing.

~~~
taylodl
What music are you listening to that _doesn’t_ have harmonic movement or
intervals?

------
vemv
15 years ago, a niche artist could earn tens of thousands a year by selling
CDs and especially digital albums.

Not enough to make a living, but definitely an encouraging amount that enabled
touring and buying more music gear.

Now in the Spotify days that same artist would earn essentially nothing.

This "saving" of the music industry is just a temporary patch that works by
redistributing niche money to the mainstream.

It should be quite evident (or at least intuitive) that 90% of Spotify
subscribers are niche (deep into rock, electronic, hip hop etc) and couldn't
care less about saving the old industry.

Soon this will become unsustainable (even more than today).

Source
[https://www.residentadvisor.net/features/3511](https://www.residentadvisor.net/features/3511)

~~~
djaychela
Was going to say much the same here. I release trance music with a friend of
mine (nothing serious, just a couple of friends who spend an evening a week
working on music together), and have done for years. Pre-spotify, we used to
make some money from sales of tracks - not a lot, but enough to have a few
nights out here and there. Now we make literally nothing, due to the way that
royalties are paid - we see tiny (£0.0001-scale) royalty payments for the
hundreds of listens that the tracks get, where we used to sell a few tracks a
week.

Most spotify listeners assume that their monthly payment goes to the artists
they listen to, but that couldn't be further from the truth.

~~~
TheOtherHobbes
For a long time the industry relied on an external cultural of independent
producers and distributors - all genres, not necessarily "indie" music - to
keep the system running.

The indies generated, promoted, and distributed the next generation of music.
The majors would then either sign the bigger artists or buy out the bigger
indie labels. Both would get rolled into the big machine and the cycle would
start again.

Spotify has killed that. Never mind earning money - indie artists can't get
significant exposure. Not from unit sales, not from touring, not from
streaming, not from anything.

Sooner or later someone is going to realise that an indie-Spotify has to be a
thing, because there's always going to be a significant market for people who
want to discover non-mainstream music and music is going to stagnate and choke
on its own products if the main distribution system is a monopoly.

~~~
ubercow13
I don’t understand this take. Can’t indie artists get their music ok Spotify?
How is the situation worse for them?

~~~
superpermutat0r
Big labels negotiated good deals for their own artists so royalties from
streaming benefit them, not the indie artists.

Although, music industry is even worse. A pyramid scheme where old, still
living artists negotiated big deals and the label gives peanuts to new.

------
redis_mlc
This is foremost an article about Spotify, not the music industry.

The #1 streaming service is ad-supported Youtube, barely mentioned.

[https://www.musicbusinessworldwide.com/more-music-is-
played-...](https://www.musicbusinessworldwide.com/more-music-is-played-on-
youtube-than-on-spotify-apple-music-and-every-audio-streaming-platform-
combined/)

~~~
zerr
Isn't the audio quality usually worse than spotify?

~~~
mcny
My understanding is Spotify (premium?) can also serve low quality audio when
the user has a poor connection? YouTube compression is horrible but passable
for many people, I think. People listened to music on AM short wave and medium
wave just fine as well. The key point was that radio was readily available.

~~~
Biganon
320 kbps mp3 is not horrible at all. You wouldn't use it to archive your
music, but it's barely distinguishable from FLAC.

~~~
geon
Pretty sure youtube only use 128 kbps, which is a lot worse.

As you say, 320 kbps is nearly perfect.

~~~
danlugo92
FWIW youtube serves 128kbps AAC though, not mp3.

------
leksak
It's common to bring up the decline in profits that the music industry saw but
no-one seems to ask the question as to how their profit margins were so high.
As I understand it, cassettes and CDs were dirt-cheap to produce but the
average consumer hadn't caught on to the fact and on each sale of either the
profit margin was tremendous.

Another tangent, maybe it saved the music industry but what effect did it have
on our culture? I believe Spotify fundamentally changed our previous
read/write-relationship with music to be a read-only type of affair for most
individuals.

~~~
goatinaboat
_cassettes and CDs were dirt-cheap to produce but the average consumer hadn 't
caught on to the fact and on each sale of either the profit margin was
tremendous._

The fundamental collapse in profits is because once you could sell an album
with 3-4 good tracks and the rest filler, but that’s much harder to do now.
People will prefer to buy just the songs they like, so you might get 3x0.99
whereas previously you could have sold the album of 10 tracks for 10.99. The
cost of producing the filler tracks was negligible anyway.

~~~
wutbrodo
It's worth noting that this was the case even before streaming services
arrived. I distinctly remember reading an article about how Kelis and Norah
Jones were the top-pirated artists of a given time period, but their album
sales widely differed, since Norah Jones had multiple popular tracks while
Kelis just had her one hit single.

~~~
goatinaboat
_Norah Jones had multiple popular tracks while Kelis just had her one hit
single._

I made the mistake of buying Gwen Stefani’s solo album, which is literally one
decent track, which was the single, and all the rest filler. That was the
turning point for me and I expect many others have had similar experiences.

------
fwn
> In 1999, ... the global recorded music industry logged a record $25.2
> billion in revenues... (For perspective, Starbucks had just under $25
> billion in sales last year.)

USDs in 1999 do not have the same value (purchasing power) as in 2019 and
comparing them over time without acknowledging inflation does not really
create perspective all that well.

------
panpanna
Now the music industry will manage to kill itself by being totally incompetent
and extremely greedy.

50% of the industry seems to be centred around talent show participants to
make a quick buck (no need to pay for marketing).

The other 50% is trying to bite the hand that feeds them, while thinking we
are still living in the golden days of music when the coolest thing you could
own was the latest Beatles record.

Meanwhile, I have started listening to the British wave music, generating them
zero sales...

------
ngcc_hk
It is different business model. If this does not keep the industry going
something else will find their way.

Sponsorship for individual artist only work for continuous production. It is
hard even for Beethoven to survive in his era of that business when only
concert get you money. (Handel get most by doing his concert in England.
Beethoven complaint he will starve to death when London symphony society
immediately commission no 10 with prepayment. Still meant he was not ok).

The industry moves on.

------
hootbootscoot
"saved" = streaming model, which, given the layers of brokerage, provide
nearly no money to artists popular enough to generate millions of
streams/listens.

The tech world has colonized a succession of industries, from publishing, to
music, and the net result is dead industries whose shells serve as mere
promotional funnels for the illusory big gig in the sky in which the artist
will make their money, despite the fact that said artist makes quiet music
people like to listen to in their homes and will never likely be able to pull
off large concerts.

Per the commenter below "there's loads of talent, let them eat cake", well
friend, I like good music made by people who cared enough to study, play
multiple instruments fluently, collaborate with others, and sometimes form
large ensembles that are economically unfeasible. Where is big band? there is
a reason bebop and rock and later singular dj's took over = simple event
economics...

Meanwhile, the elephant in the room is how our industry preaches lovely lies
about freedom and how other peoples products should be free, while our vampire
industrial sector sucks the remaining blood from various markets we first
destabilized and weakened. I know that I certainly participated in plenty of
music sharing (and creation) and I am not denying the positive benefits of
being able to find loads of different music through the magic of text
searches, but simply urging my fellow tech zealots to back the XYZ up a bit
and aknowledge the absolutely devastating effect we have had.

Spotify, incidentally, is one of the worst offenders in treating the artists
poorly, compared to something like Bandcamp, let's say.

------
StreamBright
I seriously doubt that Spotify saved the music industry. If anything, Bandcamp
is the one that could claim such thing. Having an easy way to pay for music
where I buy an album or song is the way to go if you respect musicians.
Downloading ALAC is the same as buying a CD but a digital way. Using a
streaming service is a much more complicated way where niche artist are not
going to be too happy. (Some examples from musicians below).

~~~
maaaats
Never heard of Bandcamp. Been paying for Spotify for a decade, though (since
oct. 5 2009).

Edit: Cannot find a single mention about Bandcamp on any news site in my
country (Norway), and virtually no results in some more countries I checked.
Do they have a European presence at all?

~~~
layoutIfNeeded
You’re probably listening to mainstream music. You won’t find Rihanna or
Beyonce on Bandcamp. If you prefer listening to such artists then Spotify is
perfect for you.

Bandcamp is for more nuanced, underground content. E.g. ¾ of reviews on
Pitchfork link to the Bandcamp page of the artists.

------
raverbashing
If the music industry had started selling an album for a dollar instead of
fighting Napster they would be making more money than now.

Spotify pays very little to the artists but I'm not sure the margins are
there. Tidal promised to be more generous and everybody saw how that went.

------
FraKtus
I have a subscription to YouTube Music (premium). But I still download my
music the old way because most of the time my data is off on my mobile. And
it's how I like to listen to music for more than 20 years :-)

It would be nice to have a bot that could pretend that I am listing to some of
my best artists so that they can get their pennies from the streaming
companies.

Is there anything like that? It would help music fans to pay their favorites
artists through the streaming companies?

~~~
lostgame
If there was anything like that, every manager and marketer would be using
this tool to artificially inflate their streams (who says they're not
already?).

~~~
ozzmotik
just fwiw as an independent musician and someone who is trying to get by on
monetizing my creative output, I certainly have spoken to many creatives who
will just keep their music on loop on Spotify all day to accumulate royalties.
there are also loose groups based around making playlists of music by
independent artists that the entire group then commits to streaming all day to
help generate those streaming royalties. just figured a bit of relevant
information might be nice to share :)

------
shmerl
We need more DRM-free music instead.

~~~
askvictor
You can always buy a CD/LP/tape (I hear these are making a comeback). Rip them
if you want, or not.

~~~
shmerl
Sometimes I do that, when it's the only way to get the lossless source. But
physical media is slowly becoming obsolete. At some point no one will be
selling it that way.

~~~
isostatic
C90 cassettes are objectively terrible

