

Spotify's dangerous game - dgurney
https://medium.com/p/6c41d6f0b27b

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DigitalSea
I think it's unfair to blame Spotify in this situation. The labels set the
asking price and Spotify either chooses to pay it or have no music to legally
stream. As a service Spotify is a fantastic service, since it debuted here in
Australia I've barely downloaded music in part because I pay $12 per month for
on-demand music and don't need to download.

If Spotify were benefiting from the extremely low royalty payments, then maybe
I'd side with the argument Spotify is taking artists for a ride, but the
matter of the fact is Spotify are not profitable whatsoever. This amazing
service is operating at a loss and has been for years now. If artists want
better payouts maybe they should lobby their labels to do so.

A service like Spotify costs a lot of money in terms of bandwidth and
infrastructure to operate. Storing and streaming music isn't a trivial thing,
the costs of operating the service are a massive percentage of Spotify's
monthly expenditure fees. It's not costing the artist money to put their music
on Spotify, it's costing Spotify money to put an artists music on their
platform and allow others to listen to it. The royalty amount might be low,
but make no mistake, the artist is still getting a better deal than Spotify
currently is.

The only people currently winning out in the online music space are Apple and
music labels. Services like Spotify and artists themselves are being shafted
and have more in common than they think.

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ewzimm
I think the problem is that people are looking at Spotify as a replacement for
album sales, when realistically Spotify is a replacement for listening to
music from torrents, YouTube, or Grooveshark. Album sales are a lost cause. If
Spotify disappeared, the situation for musicians would not change. Right now,
Spotify makes a convenient scapegoat because they are popular and don't pay
much, but they are not the cause of the problem. I'm sure many people at
Spotify want to help musicians get exposure.

To put this in perspective, $20 is a ridiculous amount of money compared to
traditional record contracts, but after administrative and promotional fees
were extracted, the classical record contract could often cost musicians
money. The recording industry has been preying on musicians for years, but
music fanss have been more than willing to pay their favorite bands for merch
or buy expensive concert tickets for a live event. Ticket scalping is booming.

There are legitimate revenue streams available to musicians, but pay-per-
listen is not going to be profitable.

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dgurney
It's not true that album sales are a lost cause. Look at Bandcamp -- musicians
made $2.5 million via Bandcamp over the last 30 days. What's changing is the
model. No longer is it "pay a set fee to listen." Now it's "support the
musician directly."

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ewzimm
Bandcamp is a good service too, but there's no way it will completely overtake
the place of cheap streaming that doesn't make anyone a lot of money. I agree
that direct support is the way to go, but there's a place for both models.

