
Spotify Saved the Music Industry (But Not Necessarily Musicians) - ingve
http://freakonomics.com/podcast/spotify/
======
zwkrt
It seems to me like musicians have always been in a precarious relation to the
economy, same as all other artists. The only difference is that for a brief
time in the 20th century the average person was willing to spend money on
music, unlike every other time in human history.

Nothing will ever stop people from making music, and 99% of working musicians
are making a meager living doing what they enjoy, just like always.

~~~
wwweston
> Nothing will ever stop people from making music

The funny thing is how true this statement is, and yet how often it's deployed
as if that means nobody needs to further consider or negotiate the present
economics.

How would one establish the idea that average person wasn't willing to spend
money on music before the 20th century? Because I'd expect as long as there's
been instruments and money, there's been _some_ form of economic
participation.

But let's say it's true -- does that really direct a normative discussion on
current economics? Because a hell of a lot of things about human society after
industrialization have only been true for a brief time in human history, and
that's no clear indicator of whether or not they have value.

Here's a better standard: how well does what we're doing support people who
are in a position to make musical contributions that people value?

Recording sales fared pretty well by that standard, although there was the
problem of predatory middlemen. Streaming revenues seem to have the same
problem, and don't fare anywhere near as well.

~~~
zwkrt
> how well does what we're doing support people who are in a position to make
> musical contributions that people value?

This is the best possible time to support an artist you enjoy. You can buy
physical and digital copies of any artist in the world, artists can set up
Patreon accounts, and you with a small amount of ingenuity can probably even
mail your favorite artists a check directly.

The issue is that people don't do this, because they don't value the music
enough to do it. It is not a great argument to say that Apple Music is
mistreating artists, the fans are mistreating artists.

As a final point, the way most popular (not just pop) artists get popular is
through marketing, advertising, venue promotion, radio deals, etc. The record
company probably deserves the majority of the money produced by such
enterprises because without their intervention no one would be that famous to
begin with. Kanye West is a brand, just like Ford and Dockers.

~~~
not2b
Only indie artists can do that. Record companies are now signing musicians and
bands to what they call "360" accounts, meaning that the company controls
every aspect of how the musician might make money, from digital presence to
merch to advertising to touring. By staying independent, they can make their
own deals, but then they have the problem that they can't get on the radio and
have a hard time getting known.

~~~
mikepurvis
Do those deals have expirations, or are they "for life"?

I feel like once a musician is established, the label should have to justify
their ongoing role in that musician's career, and certainly in the past lots
of musicians have switched labels or started their own small labels later on
in their career.

~~~
ZoomZoomZoom
5-10-15 years and more is not unheard of. In case a musicians becomes
established they will just say it's the result of their support and their
investments, so that's when they push for max returns (see the many stories of
rushed albums which labels forced out of the artists while trying to ride the
wave of initial success).

------
kristianc
It's interesting how different types of music have thrived through the
streaming economy.

Hip hop is huge on Spotify, where it struggled for radio play and sales before
because commercial radio is so conservative (in the sense of risk-averse).
Then there's the whole Billie Eilish thing: huge on Spotify, almost no radio
play at all.

On the other hand, there are Billboard 100 artists who are more or less absent
from the streaming landscape. Some sell lots of albums but aren't on the
streaming charts at all.

It's probably not as simple as saying that streaming is only good for
established artists, but bad for the long tail. For some of the previous long
tail, it's been very good. And for some of the oldies, it's been phenomenal -
Spotify enables them to monetize their back catalogue with near zero promotion
or distribution costs, year round.

~~~
geden
Spotify has had a severe and negative effect on musicians who make what I term
'peak experience music'. Amazing music, but not something you listen to every
day. Say you listen once a month or even just a few times a year.

Before: 2 listens = dealer price of a CD in UK = about £7.5 (on a good UK
indie that's split 50/50 with the artist).

Now: 2 listens = income from 2 streams on Spotify = about £0.0006

I'm thinking of artists like Autechre.

Spotify is starting the shape the sort of music that artists can be successful
with, in a bad way.

~~~
pertsix
This is not true/unfair interpretation.

An artist does not get paid after the first payment from the label from the
sale of a CD. If you play the CD on repeat, the artist does not benefit, nor
does the label.

/Labels/ get paid for every single listen on Spotify.

There is also Spotify Direct, too, and the artist can directly benefit more
than if they went with a label.

~~~
geden
You appear to have missed the point. I'm singling out a genre of music where
you might only listen to an album a few times. So repeat plays are irrelevant.

------
matthoiland
As an amateur musician I still make most of my monthly sales from iTunes.
Streaming pays so little, unless you're a big name – which incentivizes the
big labels while squeezing the smaller artists.

Early platform like Lala (bought by Apple) had a cool model – $0.10 per song,
but you can only stream it. Ownership was still there, and artists were paid
equally per sale.

Nevertheless, getting your music distributed is easier today than ever, and
I'm sure all artists are grateful for that.

~~~
criddell
> Streaming pays so little, unless you're a big name

Are you saying big acts get more per stream?

Also, I'd love to hear what you think about how the incentives from Spotify et
al are changing music itself. From what I understand, a play isn't registered
until a certain portion of the song has been played. This hurts songs that
have a slow build and so hooks are being pushed right up front. Do you think
it's homogenizing music to any degree?

~~~
matthoiland
I don't think Spotify (streaming services) are influencing the composition of
new music – listening habits are mostly unchanged since popular music in the
50's. The 3-minute song with the initial hook is a product of 50's AM radio.
Whereas Radiohead/Sigur Ros/Slowdive artists with long builds do so
intentionally, and their listeners enjoy that about them.

But.... what has changed is the frequency in which artists need to release
content in order to compete in the algorithm arena. Some artists understand
this, and more singles, EPs and early album previews allow for more "touch
points" with their audiences throughout the year.

~~~
criddell
> what has changed is the frequency in which artists need to release content

So, the album is dying? Could something like Pink Floyd's The Wall be released
today? It's a two CD package with gapless songs.

~~~
moate
The Album has always been a weird thing. Yes, the album as a concept has
largely fallen off. It has very little advantage over a 2-4 song EP at this
point. You no longer need to package weak b-sides in, because they're not
going to get plays anyway. More bangers, less chaff.

But yea, you can still do a concept album like The Wall or Sgt. Pepper's. Kids
doing drugs and laying around listing to weird noises for an hour+ is still a
thing these days.

~~~
NikolaeVarius
I don't quite understand this claim that the concept of Albums have fallen
off, Metal still puts out quality albums today.

------
wwweston
If something hasn't "necessarily" saved musicians, then there's not much of a
defense of whatever else it's done for the industry.

And any idea that services like Spotify were just the only way forward to
revenue is one that thoroughly ignores the growth of digital recording sales
that took place independent of it (not to mention what they may well have been
like if it'd never happened).

Buffet streaming services marry the worst of piracy and the old-school
middleman capture. They give the illusory impression that you're actually
rewarding value.

~~~
ninth_ant
> Buffet streaming services marry the worst of piracy and the old-school
> middleman capture.

You have an interesting perspective... as a consumer for me Spotify marries
the _best_ of those two worlds. I get the music I want and discoverability,
quality, and ease of use is extremely good.

~~~
wwweston
You're talking experience rather than economics. The consumer experience of
Spotify is certainly much more convenient and pleasant than the experience of
P2P piracy.

And it turns out that can be true even while the economics of buffet streaming
services simultaneously effect the drastic cuts in first-order revenue that
piracy brought directing it instead to distributor and label.

~~~
ghaff
Short-term experience anyway. Long-term experience requires remaining a
subscriber ad infinitum. I admittedly come from the perspective of someone who
prefers to own music that I care about. Which, in turn, is very influenced by
the fact that I had a very large digital/digitized music catalog before
streaming came along so incremental purchases aren't very expensive.

~~~
mediascreen
I think there is a difference between collectors and people who just want to
listen to music. I gladly pay Spotify each month to NOT have to manage a
collection of physical or digital music.

I gladly pay HBO and Netflix as well, but it seems no matter what I pay, I
cant get the same movie/series coverage that Spotify provides for music.

~~~
ghaff
I don't really think of myself as a music collector. I just like to know that
if I decide tomorrow I don't want to pay for a streaming music service any
longer, I'll still have all the music I care about. That said, given that all
the major music services have at least most non-niche music, having
subscriptions to some things is just the way things are these days and you're
probably not realistically going to drop a music streaming service.

Video is, of course, much more fragmented but it's also different in that
you're not going to rewatch most video content. There never were music rental
stores (although libraries did/do have music) but video rentals were a thing
pre-streaming.

------
billmalarky
Platforms like Spotify, YouTube, etc, are a marketing channel - not a revenue
channel. They can be used effectively to develop an audience, but not to
monetize it.

For example see Pusheen the cat. Started off as a tumblr web comic/character
and now generates millions in merchandising revenue:

[https://www.ndtv.com/world-news/how-an-internet-cat-craze-
be...](https://www.ndtv.com/world-news/how-an-internet-cat-craze-became-a-toy-
empire-1287225)

~~~
wwweston
> Platforms like Spotify, YouTube, etc, are a marketing channel - not a
> revenue channel

Which would be cool, if Spotify wasn't meant to be a replacement for a revenue
channel.

~~~
lmpostor
You can't replace something that is dead.

~~~
wwweston
Revenues from US digital recorded music sales steadily rose from the
introduction of iTunes up into the billions through at least 2012. Maybe
2013/14-ish. I think at one point it'd actually matched 90s CD sales revenue,
though I may not recall correctly.

That was hardly "dead." There's this narrative that goes around "oh, yeah, the
internet happened, copies are cheap, no one was ever going to buy music again"
... and it's not true.

The truth is that there was a thriving digital recording sales growing up to
take the place of physical recording sales. And buffet streaming kneecaped it.

~~~
Daishiman
Buffet streaming killed it because it's cost-competitive to the consumer,
period. That's a triumph of capitalism.

~~~
wwweston
At best that's like saying it's a triumph of capitalism when Walmart hollows
out local retailers, or industrial agriculture hollows out smaller operators
and with it communities. Sure, you get cheaper goods, but there are less
pleasant externalities that go with it.

As someone once said about another triumph of capitalism: when you value
McDonalds, you get McJobs.

Possibly McMusic, as well.

------
esilver
This interview sets up this false dichotomy where people ostensibly accessed
music by spending $15 on a CD or not at all. The contention seems to be that
piracy/Napster were a forgone conclusion because there was no real choice.

People listened to ad-supported radio or they listened to records socially or
borrowed them. That’s how it worked for about 80 years.

I’m not defending the music industry, its practices, or its stalwart
backwardness. But suggesting music was inaccessible is plainly false.

~~~
rchaud
Or they made copies of friend's records ("ripping"). the CD-R drive has been
around for 2 decades now, and came as a default option on many laptops and
desktops in the early 2000s. And before that, people had CD/Casette Boomboxes
where you could record CD tracks to the cassette. It was the only way to make
mix tapes.

I remember the days of ripping CDs borrowed from friends on a 4x speed drive;
back then, you could do 8x but there was a risk of file corruption/recording
failure.

~~~
esilver
I completely forgot about this set of practices. Yes, a huge part of youth
culture concerned itself with the creation and sharing of mix tapes. Looked at
through this lens it makes me almost wistful thinking about the mix CDs I
exchanged with friends in high school. They took a fair amount of work to put
together and were often deeply personalized for the receiver. Makes you wonder
who’s missing out, us or “kids these days.”

~~~
rchaud
Yeah, those were the days of making mixes for actual events, like road trips,
relationship anniversaries, etc; these would be highly personal mixes, with
inside jokes and obscure references. Now the trend has shifted to becoming an
influencer with public playlists.

------
dmitriid
So, Spotify pays 70% of _revenue_ to labels. In the end it's labels who pay
the artists.

Why does no one, literally no one ask: where the hell does that money
disappear? Everyone is busy writing 20,000-word essays on how streaming is bad
for artists. Maybe, just maybe, it's not streaming that's bad but the labels
and their agreements with both the artists and the streaming services?

------
melq
>For a company that doesn’t really make anything

People think technology just develops itself huh?

~~~
kraftman
What technology are they developing that people are asking for?

------
Daishiman
People love to complain about nothing, eh?

Think about what the distribution landscape for musicians used to be like in
the past.

You can literally put up your entire music catalog at almost _no_ effort and
and generate enough popularity to support your act through live plays. Live
shows have _always_ been the main source of revenue for artists.

People saying that the situation for artists is bleak have _no_ idea of what
they're talking about. It has never in history been easier to start a music
act and get followers from all around the world. It has never been easier to
concentrate fans of every possible little genre into their own communities.

What most people don't realize is that the live act scene has _exploded_ all
over the world. There a literally thousands of live music festivals going on
every summer that just weren't there 20 years ago. Modern festival culture is
fueled by streaming media, Soundcloud, BandCamp and Youtube.

I follow scenes where an artist's greatest hit gets 20k plays on YouTube and
500 physical vinyl copies. That's literally enough to make a living and tour
around a little on your free weekends. How possible do you think _that_ was
before Youtube?

------
shmerl
I prefer to buy, not rent music. Luckily we have enough DRM-free music stores
around that simply sell you music files. FLAC is the best option.

~~~
kilroy123
Like what stores?

~~~
ry-n
[https://bandcamp.com/](https://bandcamp.com/) is really wonderful if you're
asking about music in general and not artists hitting the billboard charts.
However, as it supports free listening there isn't a barrier to searching
around and discovering new things.

If you want some good coding music for the day I'd suggest starting with
[https://wanderband.bandcamp.com/](https://wanderband.bandcamp.com/)

~~~
Semaphor
I love bandcamp. For 9 years now I've been getting almost all my music (I
think maybe one or two albums from Amazon in-between) from them. I can get
straightforward notifications, I can get whatever format I want and I can
stream the whole album as much as I want before buying it (though I never
listened to one fully before buying it – or deciding against it).

And not to forget that I can often choose my own price (when I was a student I
sometimes paid less, nowadays I usually pay a bit more)

~~~
shmerl
Yep, Bandcamp is my favorite store for music as well.

------
IloveHN84
It saved music labels from illegal p2p (maybe). But it introduced the shitty
model pay-per-service and now you need 10 accounts to get 10 different things.
The same applies for videos.

The unique true service that can centralise everything is still Kodi + plugins

------
Animats
Now can someone do Spotify for old movies? The online Netflix catalog keeps
shrinking. Studios are cracking down on Youtube showing movies that used to be
used as filler on late-night TV.

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doctorpangloss
The long tail is dead. The algorithm that was supposed to help you find it has
killed it instead.

~~~
mrob
The long tail is more alive than ever, but algorithms have always been a bad
way to find it. Instead, listen to personal recommendations on web forums etc.
There are people who are passionate about any obscure micro-genre you can
imagine, and they'll point you to the best of it. Bandcamp and Soundcloud are
full of long tail music that's completely ignored by the mainstream music
industry.

~~~
mr_tristan
It's interesting, I've gone back to Spotify from Apple Music primarily because
I can easily find more interesting playlists from curators.

I don't think Spotify has any kind of special algorithmic sauce, they just
make it easy for people create and share playlists.

It amazes me how most of the other streaming services try to turn everything
into an algorithm, via "special radio" stations, etc. And yet, the best way to
provide a long tail for music still seems to be basic web 2.0 - let the people
make the content for you.

~~~
chewz
In my humble opinion all discovery algorithms with all large providers are
terrible. Instead of expanding they narrow down choices and never surprise me
in a good way like some human curated playlist can.

I had been switching between Apple Music, Spotify and Google Music in
different countries. Currently I have settled on Google Music simply because
Google practically abandoned Google Music so they are not so in my face with
curated playlists and stations.

On the other hand I think that there is opportunity for good (like in really
working) AI engine for music recommendations.

~~~
brycesbeard
What’s interesting is that these algos are trained on human feedback. What
does that say about our revealed preferences in music?

~~~
chewz
As an anecdote I have left Apple Music after it had been suggesting to me at
least 3 heavy metal playlists for 30 days. And this is the one genre I do not
listen to.

I had been clicking 'I don't like it' buttons hoping the AI will get it but no
luck. So after 30 days I had enough and moved on back to Spotify.

So much for human feedback.

~~~
brycesbeard
Maybe you actually like heavy metal but won’t admit it to yourself ;).

(Just kidding, but this kind of thing will be more common in the future,
especially as we learn more about how little the brain knows about its own
desires and motivations)

------
thegayngler
I would argue that most musicians should be salaried employees making 80-150k.
The label would then handle everything else. The musicians only need to focus
on creation and performing. I have always been interested in the problem
Spotify is trying to solve for. However, I think they've only solved half the
problem. The other half of the problem is solved by putting long tail
musicians on a salary and then they can graduate out of that once they achieve
a certain level of commercial success.

(Why is this being downvoted?) It is on topic and is not at all hostile.

~~~
kevincennis
The problem with this is that it requires really successful artists to work
for _far less_ than the value they create, which they won't – because they
know they could make far more money independently.

And without the top performers subsidizing the salaries of everyone else, the
whole thing falls apart.

~~~
thegayngler
Top performers are already working for far less than the value they create
allegedly. Usually, there are a whole host of people working on a project.

Right now you have fake writing and producing credits simply designed to
generate a stream of income for the musician. I think going to a salary would
allow people who are best at writing or production or something other than
singing being able to focus and it brings the cost to produce a record down.

You may or may not be able to make more money independently. You never know
when the public is going to move on to some other sounds and you never know
the perks that are lost as a result. The top of the top performers probably
could swing the independence but for many it may not be the way to go. The
bottom line is that for the vast majority of musicians a salary system could
be better to work under.

I think everything should be on the table as it relates to how the music
business is run and that's what the Spotify CEO said he was interested in.
He's just doing from one side instead of both sides of the equation. That's
why the vast majority artists and content creators are on the losing end of
Streaming.

------
rob74
The thing that fascinates me about Spotify and other streaming services is
that the people who weren't willing to fork out 15$ for a CD in the past are
now willing to pay 10$ every month for... pretty much nothing at all, if you
think about it?!

~~~
codetrotter
> pretty much nothing at all

Except for instant access to what is probably the biggest collection of music
in the world. I don’t mean to be snarky but, have you ever used Spotify? It’s
a godsend.

