
My Band Has 1M Spotify Streams. Want to See Our Royalties? (2016) - wslh
https://www.digitalmusicnews.com/2016/05/26/band-1-million-spotify-streams-royalties/
======
nikanj
I feel like it's a false analogy to compare Spotify Streams to CD sales. For a
fairer comparison, you should measure against something more ephemeral.

The biggest radio channels in the US have a few million listeners each. Let's
say your record does ok, and gets airtime on a few second-tier radio stations.
For easy math, let's do 20 plays * 50,000 listeners per play. This also gives
you a total of one million listens.

I would be _extremely_ surprised if they would net much more than $5000 from
these radio listens.

~~~
bachmeier
> I would be _extremely_ surprised if they would net much more than $5000 from
> these radio listens.

Me too. Unless they've recently changed the rules, the artist gets nothing
when a song is played on the radio.

~~~
TheOtherHobbes
They haven't recently changed the rules. The average for terrestrial radio in
the US is around 12c/play.

In the UK it can be up to £15/minute plus £35/play on a top radio station like
Radio 1. Less mainstream stations pay less.

The artist may see half of that depending on their publishing deal.

So... Spotify's microcents per stream are a joke.

Around 80% of Spotify revenue goes to rights holders - i.e. a handful of big
record companies.

Around 10% of that 80% goes to artists. [1]

The record labels keep the rest.

[1] The exact accounting details are byzantine, especially in their creative
use of expenses which diminish apparent revenue. They also vary from artist to
artist. Top artists get a much bigger cut than newly signed artists. But no
one gets much from Spotify plays when compared to radio payments.

~~~
ascorbic
You need to divide that £15/minute+£35 per play by the number of listeners for
them to be comparable. Radio 1 breakfast show has about 9 million weekly
listeners. I've no idea how many people are listening at any particular time,
but you'd still be talking micropennies.

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Arqu
I somehow keep being fascinated by people think they're ripped off. I mean
sure, Spotify is making a decent buck out of it, but it's not like the artists
are doing it for free.

There's much more to the whole process. Firs to earn something per play there
need to be ads that finance it. Then imagine the technical hurdle and cost to
host such a platform (ie Spotify cut) and then you actually being worth a damn
as an artist.

1M views might seem like a lot, but actually its quite a limited resource for
serving ads. The other thing here is that most artists wouldn't have a single
view if it wasn't for one or the other distributor. Basically, the barrier is
so low to entry and the risk is dispersed across a million other artists so
you all get a very diluted value per view. But at least you get value per
view. Otherwise, it would have been an all or nothing business, like it used
to be. It's the same effect the app stores had for software devs.

In essence, you get low fees because those funds pay for the distribution and
risk that is dispersed. The general pay scale is a hockey stick with the last
couple % making the majority of the money.

Since you even got the opportunity to get in front of an audience, use it
wisely as you need to pump those numbers up. It's a numbers game and your
numbers are too low. You need double-digit millions to make a good living off
of it. And that's just what it takes. It's not easy, not everyone will make it
above the fold, for whatever reason life, luck, marketing...

~~~
kakarot
They are getting ripped off.

Many record companies, in their own financial interest, reduced the royalty
cost for streams with Spotify in exchange for revenue shares.

I would feel pretty ripped off if I made a big, delicious cake, and as a
reward I get one tiny slice while I had to watch everyone else eat the rest.
Maybe not if making cakes is just a small hobby for me, but definitely so if
it's my _career_.

~~~
ajaimk
Citation please

~~~
kakarot
It's common knowledge. I don't need to provide a citation every time I bring
it up.

But here, since you're too lazy to look it up or write more than two words:

[https://www.musicbusinessworldwide.com/heres-exactly-how-
man...](https://www.musicbusinessworldwide.com/heres-exactly-how-many-shares-
the-major-labels-and-merlin-bought-in-spotify-and-what-we-think-those-stakes-
are-worth-now/)

Interestingly, earlier this year several record companies either mostly or
fully divested in Spotify, with some companies like Warner getting over half a
billion dollars. Reasons are unclear even though they have made vague public
statements.

------
mrweasel
Arguably $5000 isn't much for three years and 1 million plays, but I'm also
not sure what they where expecting. I believe the issue is that Spotify
charges customers per month, while artists are paid by play, so the more
Spotifys customers use the service, the less they can afford to pay for each
play.

Assuming that a consumer spent the money from a Spotify subscription on CDs
instead that would, in Denmark, be around 24 CDs in a three year period. When
you look at it that way, I can't really see how artists expect to make any
real profit of Spotify, the money simply isn't there.

Streaming services allow consumers to listen to vastly more music that they
ever did before, and from a larger number of artists, but at a lower price, so
I can't see why people are surprised that Spotify isn't making them money.

What would be interesting to see is: How many time would a fan need to play
songs from one artist to make the artist the same amount of money as the sale
of a CD. I believe that an artist only makes around $0.5 from the sale of a
CD, the rest goes to the label, promotion and so on. So I would assume that as
long as each user plays a song around 100 times, the net result would be the
same.

~~~
ianai
I’d rather my monthly fee go to only the artists I play. Say, for some
percentage of my fee minus operating costs. That would reward artists
according to their draw.

~~~
hndamien
This is the crux of the fairness debate here. The numbers don't seem absurdly
bad, but if I was buying CD's - none of my dollars would go towards Rihanna
and a good portion would go to obscure bands. Currently, this is the opposite
of how my subscription dollars are divided.

~~~
Aeolun
Aren’t your $10 divided amongst the songs you listen to?

~~~
hndamien
No, my $10 is divided across all plays. So big name artists with lots of
streams get my money. Particularly badly in the months when I only listen to a
few songs because I listen to podcasts.

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nkozyra
People still seem to be stuck quantifying the value of music (sales, streams,
etc) against a time when there was less saturation and the actual cost of
producing, marketing and distributing music was much higher.

~~~
untog
Well yes, because that was a time when musicians could earn a living. It's
legitimate to question the current situation.

~~~
Eric_WVGG
When was that? Since at least the 1960s, music has been a winner-take-all hit
driven industry. You’re either The Rolling Stones, Motley Crue, Madonna, or at
best a one-hit-wonder. The vast majority of bands are (and always have been)
local groups who play their town bars, occasionally go on tour, and have day
jobs.

I’m not saying this is good, but it’s the way things have always been. There
was never some “good, honest living” to be made for anyone who isn’t a
household name.

~~~
barry-cotter
This is bullshit. It used to be possible to make a living off of selling
recorded music, whether records or cds, and people cared about, and bought
albums, in large numbers. Now the only way to make money if you’re not
nationally famous is gigging. Gigging used to be something you did to get
people to buy your singles and albums. That was where the money was and that
was how mid-list artists made a living. Now that’s gone. The midlist are
people trying to make it, on the way out or being supported by daddy’s money.

Things are different now. Records and cds lead to more people being able to
make a living making music.

~~~
nkozyra
> This is bullshit. It used to be possible to make a living off of selling
> recorded music, whether records or cds, and people cared about, and bought
> albums, in large numbers.

It still is. But let's break down the "bullshit." It used to be possible to
make a living driving a horse drawn buggy. Then things changed. Fewer people
wanted or needed this, the value went down accordingly.

A different mechanism but the same principle. The cost to produce and
distribute recorded music is plummeted. There is a saturated markets for
artists and recorded music. Is it a surprise that the value of a play has
dropped accordingly?

------
mlthoughts2018
In case anyone is interested in alternatives, I think we live in an amazing
time for non-streaming music consumption.

I run the VLC app on my mobile devices, which allows me to spawn a web server
served off the mobile device that I can connect to in the browser on my laptop
or desktop PCs.

I can upload raw music files (mp3, ogg, etc etc) onto the mobile devices
seamlessly, and it categorizes them by album.

I only ever buy full album or track digital downloads from bandcamp or Amazon
music. Zero DRM, just straight archive files of mp3s usually (bandcamp lets
you select which audio file type for a long list of options).

For unknown music, you usually pay what you want or pay a small price like $1
on bandcamp, which is almost always worth it even when just testing out some
music I’m not sure if I’ll return to yet or not, especially compared with the
negative externalities of subscriptions with Spotify.

I consume probably 5 different $10 albums per year and maybe another few
hundred or so LPs or individual tracks at about $1 each. My music budget is
probably about $250 / year, which is roughly twice the price with Spotify
premium.

I could go on another rant about how Spotify’s content discovery /
collaborative filtering offerings are extraordinarily poor and provide
genuinely negative value for me when I previously used the product, but
regardless I feel very happy to avoid Spotify’s negative externalities. That
is well worth an extra $10/month of Spotify-avoidance-fee to do it with non-
streaming options.

------
stdclass
As an artist with 250k streams myself, I don't really think that you should
directly compare it to CD sales etc.

If you compare it like this: a single play on a popular radio show can get you
250k listeners and you get payed well below 50$ per play.

So getting a couple grand for 1mio plays vs. ~250$ for some airtime on the
radio seems like a decent deal to me.

------
jondubois
I've written over 20 blog articles about software development over the past
couple of years; each article is typically thousands of words. My blog has had
hundreds of thousands of views in total (targeted at developers; a valuable
demographic) and I've made $0 from it. I find that writing blog articles is
easy and I like doing it. If you want to make money from anything,
unfortunately, you've got to compete with people like me who are willing to do
the work for free.

------
ken
I assume "Specific time period accounted: 10/15/2013 – 2/15/2013" is a typo,
right? The spreadsheet isn't sorted but it looks like the most recent date is
2/15/ _2016_ , so that's $5000 for 28 months, or about $178 per month.

That's not much. That could cover gas money for one or two band members. An
average software engineer earns 2-3x that much every day.

------
source99
How much revenue does Spotify generate for the 1M streams?

~~~
jdmichal
I think this question is part of the problem. Every stream is actually
negative revenue for Spotify. It costs them money to have a song in catalog
that is amortized per stream, and it costs them money to stream that song each
time. And some listeners are paying a subscription, which means fixed revenue
but variable streams and therefore costs. While others are ad-based model, so
hopefully variable revenue but guaranteed positive per stream...

------
IshKebab
I'm going to guess what they are before looking:

People that would have bought an album probably would have listened to each
track ~5 times, say an album has 10 tracks, this is equivalent to 20k album
sales. Apparently typical royalty on an album is ~$0.50 so I'm going to say
$10k.

...checks...

$5k. Ok fairly low but I think that was a pretty good guess!

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ksec
So 1M Streams gave them $5000 dollars, Over 4 months.

Still not entirely sure how this business will work out.

~~~
nkozyra
Which business? Spotify or music careers? Do we consider 1M streams worthy of
a "living?" Why?

------
yummybear
So about half a cent per stream in payout? I have no experience in the music
industry but as a consumer somewhere around a cent per song is what I would
imagine would be reasonable to charge.

So this is in the ballpark of my expectations - as a consumer.

------
mkagenius
How does this ($4990) compare to youtube's 1M views? Perhaps $500?

~~~
sanketskasar
But YouTube, at least the popular video platform, is not meant for publishing
songs and is doesn't claim that either. Spotify's sole business is dependent
on music and claims to be benefit artists.

~~~
bjelkeman-again
But many people use YouTube as their music jukebox. Why is it that Google
should pay significantly less for this?

~~~
fenwick67
For one, an average YouTube video is more expensive to stream than just audio

~~~
bjelkeman-again
But even if I put up a static image with the audit the artist get way less
from YouTube than from Spotify. I don’t see why that should be the case.

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oliwarner
Compare that to radio royalties.

In the UK BBC Radio 2 pays £100/minute in combined songwriter-performer
royalties. For 10 million listeners.

£300 a song. £0.003 per "stream".

Spotify is already paying above radio rates.

------
n-a
How does Tidal compare in terms of paying artists

~~~
jrace
[https://www.digitalmusicnews.com/2018/01/16/streaming-
music-...](https://www.digitalmusicnews.com/2018/01/16/streaming-music-
services-pay-2018/) {tidal}"Last year, the service reportedly paid $0.0110 per
play. This year, The Trichordist found that the platform paid $0.01284 per
stream. "

{spotify} "Last year, the service paid out $0.0038 per play. Not much has
changed this year. With a reported 51.51% market share in the US, Spotify pays
$0.00397 per stream."

------
hartator
Can’t they sum their earnings? After reading the article, it’s unclear if they
are complaining of msking too much ot too little.

~~~
gxigzigxigxi
They do sum it up. $5k for 1M streams. Which is reasonable or not compared to
CDs depending on your assumptions. Let’s say a CD has ten tracks and the
average buyer plays a CD five times. That’s fifty streams per buyer. One
million streams yields twenty thousand CD buyers under this assumption. CDs
are $10 (or were the last time I bought them ages ago). That means $200k
gross, but the band would probably not see more than 20% of that at the most
optimistic. Still, $5k is a lot less than $40k.

But if you double the number of plays a typical CD buyer would listen, and
halve the band’s cut, you’re suddenly in the same neighborhood. You also have
to factor in that many Spotify streams are not full track listens.

~~~
jsjohnst
Last time I heard a number, bands got a single digit percentage of the sale of
a CD.

Edit:

Quick web search shows I’m right.

[https://bandzoogle.com/blog/record-sales-where-does-the-
mone...](https://bandzoogle.com/blog/record-sales-where-does-the-money-go)

~~~
gxigzigxigxi
Thanks. So if the artist is both the performer and the writer, they get about
ten percent. So that’s one power of two accounted for. I think my assumption
about the typical number of CD listens is also quite conservative.

~~~
jsjohnst
I agree, I think it was conservative. So your root point appears valid.

------
nwrk
That's really greedy.

"Spotify charges around $0.015-$0.025 per ad served"
[https://blog.adstage.io/2018/04/03/spotify-
advertising](https://blog.adstage.io/2018/04/03/spotify-advertising)

while "Average per-stream payout: $0.004891"

~~~
detaro
I don't remember the free version running one ad per song, so I don't know why
those numbers should compare directly?

