
Royalty statements of a Grammy-nominated artist - ilamont
http://www.digitalmusicnews.com/permalink/2014/04/03/streamingstatements
======
falcolas
In the vein of "Full Disclosure", can we see how much this artist has made
from royalties off CDs and digital sales as well, so we've something to
compare against?

Also, for under 15,000 plays across a dozen or so separate platforms for an
entire year, this doesn't seem too terrible. People aren't listening to the
music very much, so why should a lot of money be paid to this artist? Just
because they're Grammy Nominated?

~~~
RobinL
I suppose an interesting comparison is the Gangnam Style video on Youtube,
which has 2 billion views. If he had 2bn plays rather than 15,000 he'd have
made $560,000, which doesn't really sound like that much to me considering
Gangnam Style's the most viewed video on Youtube of all time. (I realise the
revenue you'd get from the Youtube video is different).

~~~
pmorici
That sounds like a ton of money given that it doesn't even begin to represent
the amount an artist could make when you combine that with live performances
and rights for it's use in movie or TV.

~~~
falcolas
Or just CD/MP3 sales. Streaming is only one piece of the digital pie, and a
fairly small piece, I'm betting.

------
t0
But companies like Pandora and Spotify aren't profitable even at these
numbers. If this artist made 10x as much, he'd still be upset at only making
$40 for 14,227 music plays and these streaming companies wouldn't be able to
function. This is also a barrier to entry for new startups that want to offer
music streaming.

There doesn't seem to be a number that artists would be happy getting and that
music streaming companies could actually offer them.

~~~
tunesmith
That point gets brought up to imply artists are in the wrong, when it actually
supports that Pandora/Spotify are in the wrong.

Pandora/Spotify are debt-financed. They literally cannot afford to offer their
services at the royalty rates they are paying _now_ , and are pressuring
musicians to take _less_.

You can definitely create a service that is popular with consumers if you are
debt-financed (see Napster 1.0). That doesn't mean that the service should
exist, or that the songwriters should make financial sacrifices to make the
service viable.

~~~
dublinben
If artists think that (immensely popular) streaming services are worthwhile,
then they're going to have to accept lower royalties. These legal streaming
services are responsible for as much as an _80 percent reduction_ in music
piracy. If artists kill off these services, then they better be prepared to
accept the rampant piracy of the 2000s.

[http://www.digital-digest.com/news-63709-Music-Piracy-
Down-b...](http://www.digital-digest.com/news-63709-Music-Piracy-Down-
by-80-Thanks-to-Spotify-New-Report.html)

~~~
k-mcgrady
I'd be interested to see whether it works out better for the artists if they
were to remove their music from streaming services but offer it free to
download on their website one change for an email address. If they have to
make money through merch and concerts then a direct line of communication to
their fans might be better than the pittance they receive from streaming.

~~~
kalleboo
I'm just surprised Spotify hasn't done more to let artists create brands. I'm
imagining something like Facebook pages, and you have a custom newsfeed on
your home page that artists could post to including stuff like "new t-shirts
are available" and advertising concert tours. It could be based on who you
listen to the most/recently instead of explicitly following people.

Apple's Ping tried to do that stuff, but it was a massive failure due to other
reasons (everyone hates the iTunes app).

------
naner
_14,227 performances of music (almost every track 100% owned by me) generated
$4.20._

 _Someone’s making money, and in true fashion with the music industry, it’s
not the artists._

Who's making tons of money from streaming 14 thousand songs over the internet?
I can't imagine this brought in a serious amount of revenue for anyone.

~~~
belorn
The prices put down during the pirate bay trial, it was claimed that artists
lost between 20-30$ per watched performance.

So 14 thousands performance is almost a half million dollar lost of revenue,
stolen by those streaming services. Worse, they claim its all moral and legal.

~~~
nilsimsa
14000 * $0.30 = $4200 not half million dollars.

~~~
dkuntz2
He said $30, not $0.30. Which makes it $420,000. Which is almost half a
million dollars.

Of course, if the $30 figure is off, and it was really only $0.30 a
performance you're right.

------
Kylekramer
Seems to be a disconnect where Chakmakian sees one Spotify/Pandora play as
equal to a radio station playing a song when they are entirely different
things. 14,227 listeners is less than some college radio stations playing a
song once. But you won't see an article complaining about how little musicians
get from college radio stations.

~~~
GFK_of_xmaspast
14k listeners strikes me as an awful lot for college radio.

~~~
dmoy
Depends on the size of the Uni, and more importantly the surrounding city. Big
Uni in a big city, that's easily doable. KEXP in Seattle would be one example.

I guess it also depends on one's definition of 'college radio'.

------
efsavage
At first I was thinking "$4 for 14k plays sounds pretty good!", but then I did
a little math.

If I listen to a streaming service for 10 hours a week (seems like a plausible
average?), that's about 800 songs per month. So I'm probably paying in the
range of a penny per song listened to. If I played 14k songs, that's $140. So
only 3% is going to the artist[1], which does actually seem fairly low.

To put it another way, he's making the same amount of my subscription as the
credit card company is.

1 - We have no idea how much he's previously been paid via advances, etc.

~~~
genericuser
My initial thought is the amount going to artists with volume like The Rolling
Stones, and Bieber (or whatever the kids are clamoring for these days) must
command a much higher rate per listen presumably shifting the total percent
going to artists to be much higher than that.

~~~
hatfieej
Regular radio does this. There is a bonus if your music reaches a certain
level. At 25,000 performances, it is 1.5x the base rate and goes up to 4x.

------
k-mcgrady
He may be Grammy nominated but that doesn't mean anything. 14,000 plays isn't
very much at all. I've seen unsigned indie artists with more plays. The amount
of $4.20 also strikes me as a little strange. I've had music on streaming
services and the payout is generally around $0.002 per stream. $28 isn't much
better than $4 but it's significantly more.

His problem seems to be that people aren't listening to his music anymore, not
that he's getting screwed on payments.

------
threeseed
No offence to the guy but 15K listens isn't a whole lot. I would imagine many
other content authors would struggle to make any money with that kind of
popularity.

Also did he think that the problem isn't streaming services though but the
demographics those services have ? They are clearly skewing younger. I would
be curious to see his royalties from CD and iTunes sales.

------
GigabyteCoin
No offense to Armen, but being a "grammy nominated artist" isn't saying much
judging from this list:
[http://en.wikipedia.org/wiki/56th_Annual_Grammy_Awards#Winne...](http://en.wikipedia.org/wiki/56th_Annual_Grammy_Awards#Winners_and_nominees)

I can't even count how many nominees there are on that page. And that's just
for 2014.

I have friends who play in various bands every other week in front of live
audiences and guess how much they make?

It's in the range of ~$20 each per night. And that's for about 6-7 hours of
"work". Or about ~$3 per hour. "The horror! They are certainly getting
swindled!" I can hear you shouting now.

They have to load/unload all of their equipment into a van which takes about
an hour. They have to spend $20 or $30 driving their gas guzzler to/fro the
bar that's booked them for the night. Spending another hour in travel time as
you don't want to take any sharp corners or hit any pot holes with $5,000
worth of musical instruments in the back. They spend about an hour setting up
their equipement themselves, testing accoustics and such. And then they play
for a solid 3-4 hours. For $20 compensation. Oh, and I forgot that they also
get together and practice for about 8 hours every week on top of that.

But that's O.K. because they all have full time jobs and they just really love
to write and play music for people.

That's why you should be making or playing music imho, for other people's ears
and your own enjoyment. Not to write a few diddy's in the hopes of making a
killer profit.

------
chapel
I think there is a disconnect between what an artist might expect to receive
and what a listener would actually pay.

Even before streaming radio became the standard way of listening to music,
people didn't pay every time they played a song. They paid for the rights to
listen to it as much as they wanted, but they only paid that once.

Now that we have streaming, consumption is different, and artists actually get
paid per listen. They can't expect to get the same amount per listen that they
got per song on a CD years ago.

You really shouldn't get into music for the money, because there isn't money
anymore. The fact that there was money ever was a blip on the radar due to new
technology allowing an industry to explode. Technology continued on though,
and made the scarcity of music artificial.

------
thatthatis
Cool. I'm an award winning author, want to see my Adsense statement?

~~~
jedrek
I recall a blogger I follow writing a book (10? 15? years ago) and asking
people who were buying it to use his Amazon referral link. His affiliate
payment on each sale was higher than his royalties.

~~~
toby
I'm not sure if it's completely standard, but my royalties have always been
10% of wholesale (which usually works out to about 5% of retail). Amazon will
pay out 5%-10% referral fees depending on the item and how good an affiliate
you are. Also, you can often earn royalties for other items bought in the same
session, so Amazon could well be a lot more lucrative.

------
muxxa
I've always hated paying for music (CDs/LPs) before figuring out how much I'm
gonna like it. I currently subscribe to spotify but dislike how apparently so
little revenue goes back to the artists I love.

I've often thought on a revolutionary model to turn the music industry on it's
head, from the current gatekeeper/distributer model (which tries to fight
against the 'promiscuity' of digital content) to a 'charitable' model, whereby
a non-profit, trusted organization accepts a periodic donation from me and
distributes royalties based on my actual listening history over a period of
time (which could be adjustable at donation time if I prefer to give my money
to an all-time favorite artist, or conversely to a new artist I want to hear
more from).

The trusted organization would be where I'd go to download my open-source,
torrenting music player & music discovery apps.

For this to work, you'd have to reinvent how to attribute a piece of music to
an artist properly, in my ideal world middle men would be cut out, and the
money would go directly to the composer/performer. The hard part, but the key
to making me want to donate.

~~~
hellbanTHIS
Something like a Mozilla-run opensource p2p Rdio with periodic NPR-style
fundraisers? Sounds good to me.

The problem as always would be with the major labels, they won't go for
anything that weakens their control, but you could certainly start with an
indie label alliance of some sort.

------
felixbraun
"Idle reminder: recorded music is not a very big industry."

[https://twitter.com/BenedictEvans/status/464949346497085440](https://twitter.com/BenedictEvans/status/464949346497085440)

------
jwomers
My new startup is focused on lettings fans more easily get money straight to
artists: [http://saycheers.co](http://saycheers.co) \- feedback encouraged

So many times I've been jamming to a track and really had such good will
towards the artist and would love just to "tip" them some money, but alas had
no way to do it. Now we're building that way.

------
jedrek
I'm just curious, how much did the artist make off terrestrial radio plays? Is
it more than $0.00?

~~~
Turing_Machine
[http://www.forbes.com/sites/timworstall/2013/07/17/spotify-r...](http://www.forbes.com/sites/timworstall/2013/07/17/spotify-
royalties-appear-to-be-awfully-high-despite-what-thom-yorke-says/)

~~~
jedrek
My reply was a bit of a joke, because while in Europe it's normal to earn
royalties off radio play (especially from businesses that play the radio),
it's not an accepted practice in the US. Artists in the US don't make any
money off radio play.

~~~
Turing_Machine
Performing artists don't, but the songwriters do. Often they're the same
person (not always, of course).

------
mindslight
This whole transition period would be a lot less painless if artists and
consumers would accept the reality of digital copying and its implications.
Record companies already did way back when, and positioned themselves to
profit off of non-ubiquity. Now that the ubiquity has arrived, they're just
trying to keep their cash corpse alive.

It _would_ be great if creators could be directly compensated as envisioned by
copyright, but that is just not how our physics works out. Trying to pretend
that's so just enriches (old or new) middlemen, who make money pennies at a
time across thousands of artists, treating creativity as a commodity and
devaluing it in the process.

The future is here but it certainly isn't Spotify et al, with token
compensation based on token control. It's torrents with alternative methods of
compensation - concerts, merchandise, kickstarter, donations, commercial
licenses. Ignoring this is surefire exercise in frustration.

------
vpeters25
I don't know about everybody else here, but I would love to get a $35
quarterly check for software I wrote 10+ years ago just because 14k people
used it.

Musicians somehow expect to write a song and get rich from it, sorry but only
the best of the best have the talent to accomplish that. The rest, however,
can make a decent living out of it.

------
waterlesscloud
Comparing Hearts Of Space to Spotify is a little silly. HOS charges a couple
bucks a month to listen to streamed shows totaling a few dozen songs. They
charge more for less music (They're really charging for curation).

And each "play" on the show goes to thousands of people, not just 1, as each
Spotify "play" does.

Silly comparison.

~~~
schultkl
Did Armen's royalty statement sheet list streaming, radio, or both? Curious if
he gets the same whether I stream it on demand or whether I listen to a local
affiliate broadcast on the radio (?)

------
sparkzilla
15,000 plays over 90 days is an average of 166 plays/day. Despite his "Grammy
nominated" status, he's not making much effort to market his music.

------
christocracy
What would the artist lose if he removed his work from the streaming catalogs?
I wager he'd lose more than $4.20.

How much is worldwide exposure of your work worth? How about the analytics of
who is listening to your music and where?

I'm a former pirate of music but today I'm doing my part paying $20/mo to Rdio
for my family's music-streaming. Would you like to go back to those bad ol
days where you got nothing at all, no money and no analytics?

~~~
click170
You can always monitor the swarm for some kind of analytics.

I understand Netflix does this to some degree to determine the popularity of
some shows.

------
TheMagicHorsey
Nobody gives a shit about this guy's music. Why the hell should the world pay
him a retirement stipend for perpetuity.

------
robotcookies
How many would have bought an mp3 but didn't because they could hear it on the
station? How many went out and actually bought the mp3/cd because they
discovered it on the streaming station? How many went to a concert of the
artist after discovering them on this. We don't know these.

It's possible that the artist has actually made more than the statement amount
if people went out and bought his material after discovering it on streaming.
Or maybe not. But back when CDs were the only real option, I remember buying
many, many CDs for only one or two songs and being extremely disappointed with
the rest of the album. As a consumer, I believe I grossly overpaid for music
when CDs were the norm. Just because an artist could make X amount before
internet radio doesn't mean they should be making X amount now.

~~~
tunesmith
Those are good questions but they don't necessarily support the conclusion
that streaming is a net financial benefit to the songwriter. I did the back-
of-napkin math once, and came up with this:

If a single fan would listen to your mp3 around 1000 times or more, you hope
the fan will stream your mp3 rather than buy it, as you'd make more money that
way. Otherwise you hope they will buy it.

As for the "discovery" benefit of services like Spotify, you have to factor in
that Spotify also robs paid downloads. Why would someone download if they can
stream from Spotify? So, in order for it to make sense, you have to ask if the
benefit in music discovery makes up for the cost of losing album/download
sales. That's a much higher bar than to just hand-wave and say "Well I buy
some stuff I discover on Spotify!"

------
tehwebguy
This comes up every few months and this line usually gets people fired up and
angry at streaming services:

> Notice one performance of “Ceremonies” or “Distant Lands” streaming radio
> show like Hearts of Space that brings in 26 cents for the full writer’s
> share compared to 2,088 performances of “Gypsy Rain” on Spotify that brought
> in a total of 60 cents.

Spotify "performances" are (probably) going to one or two people each. Radio
or live performances go out to hundreds up to many thousands of people.

Now pull your music off Spotify and get a YouTube account so you can turn
those impressions into a $2 - $10 CPM

------
chasing
If this is such a horrible deal for him, is he for some reason prevented from
pulling his music from these services and selling it on his own (or via other
services) at a price that he deems more acceptable?

~~~
dublinben
Artists are totally free to pull their music from these services. Popular
artists like Adele and Coldplay have notably kept their music off streaming
services, and still sold enormous amounts of recordings.

------
megaman821
I feel like there was supposed to be a point here but I missed it. A guy
captures a tiny fraction of 1% of the plays of 10s of millions of internet
music listeners and expects lots of money? Of Hearts of Space pays better than
Spotify and Pandora? (does it? how many listeners do they have?)

I think people just see big numbers and expect big money to follow, but when
you have millions of people that can just graze songs or songs are delivered
to them passively, you need an extremely large number of listens to make
money.

------
s_m
If I had a website that got 14k visits in a month, would I expect to make a
living from it? (genuine question. my personal website doesn't get 14k visits
a year, let alone a month)

~~~
peterjancelis
Depends on the traffic. You'd starve with 14K visitors for cat pictures, but
could make a very healthy living of 14K visitors who want to buy home
insurance or remortgage their house.

------
kubiiii
There is a related post from David Lowery (2013), sorry if someone already
mentionned this (link is from his own blog):

[http://thetrichordist.com/2013/06/24/my-song-got-played-
on-p...](http://thetrichordist.com/2013/06/24/my-song-got-played-on-
pandora-1-million-times-and-all-i-got-was-16-89-less-than-what-i-make-from-a-
single-t-shirt-sale/)

His songs seem to have a little bit more exposure than in the discussed
article.

------
tom_jones
How do these digital services compare with radio? For example, if a radio
station plays your song and 1,000,000 people hear it, do they pay you more
than 1,000,0000 individual Pandora plays? Those numbers on your statement are
for much smaller audiences than regular radio.

------
WoodenChair
Could also be titled "there's not a lot of money to be made in streaming
music."

~~~
dkuntz2
Or, the current payment system used in streaming music...

I saw a proposal once that I really liked, instead of having all money go into
one large pot, and have that distributed among all artists based on the total
number of plays, have each subscriber's money distributed out by the songs
they listened to.

Basically, instead of having your money combined and split with everyone else
for all artists, it goes only to the artists you've listened to, and with
amounts based on your listening habits, and not the collective habits.

~~~
toby
This is a strange proposal. Assuming everyone paid a fixed subscription fee
and listened to the same amount of music each, the artist payouts would work
out exactly the same.

In practice people vary in their usage of these services. Basically the
artists you listen to would get paid more per play if you didn't use the
service much. (i.e., if I only fired up Spotify once this month, listened to
one track, then the artist gets my full $14 for one play)

~~~
dkuntz2
I don't think that's true on the payouts front (I'll get to that in a second).

Yes, if you listen less, the artist you listen to get more. Which I don't
think is a bad thing, because theoretically using the current system if
everyone listens to less, all the artists get more per play.

This system, while not perfect, gives your money to the artists you listen to
and support, as opposed to helping give lots of money to artists you probably
couldn't give a damn about.

\----

As for the payouts, I don't think you did your math...

Example:

Person A listens to four songs by Artist 1.

Person B listens to five songs by Artist 2.

Person C listens to two songs by Artist 1, and four songs by Artist 2.

Assuming that $10 goes directly to the artists from each listener, in the huge
pot system, artist 1 is played six times, and artist two is played nine times.
Artist 1 gets $12, and artist 2 gets $18.

In the individual distribution, artist 1 gets ~$13.33, and artist 2 gets
~$16.77

~~~
toby
I think that matches what I was trying to say. In the individual distribution,
Person A prefers Artist 1 and his listens are worth more because he used the
service less.

I'm not saying this is worse necessarily, I'm just not sure why it's better.

~~~
dkuntz2
I don't know that their listens are worth more or less, but I think that it's
arguably more representative of an individual consumer's choices (I hate that
I just used that phrase...).

I might hate an artist you listen to, and don't think that any of the money I
put down should go towards that artist. Similarly, you might hate an artist I
listen to, and don't want any of your money going towards them.

In regards to worth, I think a better measurement would be percentage of a
user's listens, as opposed to number of listens. While the percentage is based
on the number of times they listened to an artist, looking at the percentage
only somewhat weakens the argument based on someone listening less being worth
more. That argument doesn't really hold with me because you can get the same
payment numbers by just multiplying all artists by the same number, and while
each individual play is worth less, the artists are still getting the same
payout.

Basically I think an individual distribution is superior because .. wait for
it .. it's more representative of each individual's listening habits over the
collective's habits. Because of this, there's a large potential for smaller,
less recognized bands to make more money, because they're paid for the
percentage of times the people who listened to them listened to them, as
opposed to the percentage of times EVERYONE listened to them.

------
jasonlotito
For a blog posts around the same topic in the book world:

[http://mark---lawrence.blogspot.co.uk/2014/05/225.html](http://mark---
lawrence.blogspot.co.uk/2014/05/225.html)

------
Justsignedup
I think this + other examples show that money is in live performances for
artists. The end.

------
joelthelion
So where does the money go? Subscribers pay real money.

------
jsonmez
be the owner of the business, not the product

------
plg
should use Louis CK's approach: self-publish and eliminate the middleman

------
auggierose
I don't use streaming music at all. I don't get the concept. Back to listening
"We do what we're told", on "So", bought on iTunes.

~~~
jamesaguilar
What about the concept do you not get? It's cheaper and has more selection
than your music library.

~~~
auggierose
If I like something, it is in my library. There is not that much good music
out there, maybe 3 or 4 albums each year these days. I don't see how a
subscription could be cheaper than just buying those albums.

~~~
gnoway
I guess it depends on where you buy the album and in what format. Last time I
bought a CD it was still over $10, so anything that can give you variety at
under $30/yr should be cheaper.

The other nice thing about a streaming service is that you may get exposed to
something you didn't know you liked.

I was about to quote the annual Pandora One price as being less than the cost
of 3 CDs, but evidently I missed where the annual option was nixed due to
several increases in SoundExchange royalty rates.

~~~
GFK_of_xmaspast
I buy a lot of CDs and they're about $13-$15, which is down from a few years
ago when they were about $18.

I've never really had good luck with music recommendation services, I always
seem to get the safe recommendations from the priors.

