

How Much Money Do Bands Make From Streaming Music Services Like Spotify? - SetAside
http://www.ominocity.com/2012/09/05/how-much-money-do-bands-make-from-streaming-music-services-like-spotify/

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earbitscom
This article is false. There are different rates for streams listened by
paying customers and those listening for free. The massive majority of Spotify
users are free, and those rates are significantly less. There are several
articles about this and most do not report anywhere near those rates for
streams. It would not surprise me to find that they don't even pay the average
directly-licensed band for "free" streams.

Furthermore, the question the article asked is how much money do "bands" make
from streaming, yet it only included a band that has a direct relationship.
The bulk of bands on Spotify are put there by the major labels and one or two
collectives of independent labels. The major labels setup the licensing
structure such that the bulk of it is paid up front for a setup fee, and that
fee is divided evenly among their artists, even though a small percentage of
those artists constitute the bulk of the streaming. 95+% of the artists they
include in that setup are not recouped, which means they haven't earned enough
royalties to offset the "expenses" associated with releasing their album. The
label keeps your money until you are recouped. So, the label shares nothing
with 95% of the artists from this massive, tens-of-millions-of-dollars fee
they charge. Then they pay 5% of the fee to their recouped artists - the
megastars - even though those artists will generate 95% of the listening.
After the setup fee, the per stream fee that gets paid to the artists is
minuscule, and even much of that is swept under the rug during shady
accounting.

And if that wasn't enough, the labels own 18% of Spotify (I've heard it's even
protected against dilution) and will ultimately unload their stock on the
public right before the licenses expire and they hike the rates up to an
unsustainable level, drain all of the investment dollars out of the company,
and start the cycle again.

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Wilya
Their conclusion is different from almost every report I've ever seen on
Spotify.

[0], for example, had some real world numbers and an interesting discussion.
The example is probably heavily biased, but personally, when I see
"iTunes/Bandcamp/Amazon: $82,000 | Spotify: $300", the conclusion is pretty
obvious. Also, her reported rates were around $0.004/listen, on average.

[0] <http://news.ycombinator.com/item?id=4330920>

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comet
Found this interesting article <http://qr.ae/8WSb7> from Business Insider that
shares an opinion that bands/artists are probably not making much. However,
here's another article (<http://goo.gl/FjuiN>) that predicts that the global
revenues of streaming services like Spotify, Pandora, etc is set to grow 5
times faster than the revenues from downloads. So I presume streaming business
is here to stay & artists would just have to deal with it. Not to sound all
markety, but I've set out to address this problem & have just launched my new
startup, Moshbag (<http://moshbag.in>). The idea really is to provide a
platform for artists to launch their new releases & let subscribers download
all new releases for a subscription fee on a monthly basis. We are also
distributing 90% of the entire subscription fee collected to all artists. To
all those who'd be interested to know more about us, here's a link to our
blog: <http://moshbag.tumblr.com> P.S.- I've just posted it hacker news as
well <http://news.ycombinator.com/item?id=4474589> Please do upvote & comment!

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ehutch79
For those interested, this is an actual screenshot of my cdbaby dashboard for
my bands album (seriously check us out, links in my profile)

[http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716...](http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716.r90.cf2.rackcdn.com/Screen%20Shot%202012-09-06%20at%208.41.02%20AM.png)

There's some more recent ones but they're identical to what you see.

iTunes match has paid out several different amounts:
[http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716...](http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716.r90.cf2.rackcdn.com/Screen_Shot_2012-09-06_at_8.47.56_AM.png)

For those that may not know, cdbaby taks a 9% cut of what services pay out,
but there's no yearly feel like with tunecore.

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RexRollman
To me, Spotify is more of a radio competitor than an iTunes competitor, so for
me the comparison is: what do artists make per play on the radio vs Spotify?

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AndrewDucker
Seems like a fair amount. If a track gets plenty of play over your lifetime
then you'll listen to it _way_ more than 99 times. If you only listen to it
once, then it probably doesn't deserve more than that.

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Gustomaximus
I seem to recall having this conversion on a previous HN article (maybe it was
reddit) where an artist was blasting Spotify for paying them a fraction of a
cent per song play. But the recurring nature is the key. If a consumer likes a
song it will get played 1000's of time over a lifetime and easily generate
more revenue than a one time buy. So it just shifts an enduring quality vs fad
element to the success (and revenue) of a song.

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k-mcgrady
There is a problem with the view that "If a consumer likes a song it will get
played 1000's of time over a lifetime and easily generate more revenue than a
one time buy". Spotify limits free users to playing a song no more than 5
times per month. So to listen to a song 1000 times on the free account would
take 200 months or 16.6 years.

I don't think it's a good limitation to put on the accounts. Most people
aren't going to upgrade (they'll just play the song on YouTube or download
it), and artists are losing out on money from plays and potential fans.

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rohansingh
Spotifier here. Just wanted to chime in on the 5 times per month limit. We
actually removed that limit in all markets except the UK and France back in
March. If I recall correctly, it never existed in the US.

~~~
k-mcgrady
Thanks for making that clear (I'm in the UK so didn't realise). Any specific
reason it's limited in those two markets?

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chrischen
Why the heck does iTunes Match still pay per stream royalties for songs you
already paid for???

Apple pays them, but the cost is passed on to the user in the annual fee.

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manmal
Because you can (and most users, will) upload pirated music there. It's a
possibility to white-wash illegally acquired content.

~~~
freehunter
This is akin to pirate taxes on blank CDs and DVDs because the person buying
them might burn pirated media to them.

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r617dllao
Nice affiliate links for TuneCore. This may be a subtle form of advertising
for that service. Fake content? You be the judge.

