

200+ Labels Withdraw Their Music From Spotify: Are Its Fortunes Unravelling? - glymor
http://www.wired.com/epicenter/2011/11/200-labels-withdraw-their-music-from-spotify-are-its-fortunes-unravelling/

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mbesto
_Add to that the feeling that their music loses its specialness by its
exploitation as a low value/free commodity._

Interesting quote. Is music production being exploited as a low value
commodity, or is it in reality a low-value commodity? With the insane amount
of music that is available I personally feel like it's the latter, and the
reverse exploitation of publishers/distributors has gone on for too long.

~~~
JonnieCache
The factor that is often missed in this equation is that good music will
always have a high value to the people who make it, because they pour their
heart and soul into it. This will strongly affect their decisions about
selling/marketing it, in ways that will likely appear irrational in the light
of cold economic analysis.

Those who manage to understand this "passion" factor and work it correctly
into their business models are the ones that will make the post-piracy music
industry work for them.

A simple example of this is the sale of super-deluxe limited edition box set
versions of albums for $200 which we've been seeing over the last couple of
years.

~~~
dpark
> _The factor that is often missed in this equation is that good music will
> always have a high value to the people who make it, because they pour their
> heart and soul into it._

Passion doesn't change the economic facts. Painters pour their hearts and
souls into their works as well. That doesn't mean that they can realistically
sell at a high price. Most painters are broke, and most of the art people own
are cheap reproductions from places like Pier 1 or Art.com. And most people
still own relatively few reproductions.

The question for musicians should be how can they maximize revenue, not price.
Unless they want to live in a world where albums are purchased liked
paintings: rarely and only by a small market.

~~~
JonnieCache
_> Passion doesn't change the economic facts._

Nope, but it will change economic behaviour.

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akmiller
_more than 200 labels has withdrawn its entire catalogue from Spotify,
Napster, Simfy and Rdio._

Somewhat sensationalist headline trying to make it sound like it's Spotify
that's losing these labels when in reality it's the labels opting out of ALL
subscription based music services. Not to say that it's not a huge problem but
there is no need to single out Spotify in the title.

~~~
betterth
Also, it's a bunch of small time techno labels, and not a single major label
is a part of the enormous sounding "200 labels".

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philwelch
"because it turns a service that has everything into a service that has “most
stuff”"

Spotify already was a service that has "most stuff"--it was never a challenge
to find holes in their catalog.

And judging from the ads that the free version of Spotify plays for me, either
their entire userbase is really into country, or their advertising is more
intended to badger me into buying a subscription so albums I actually like
aren't interrupted by country music every 2-3 tracks.

~~~
nicwest
_... has “most stuff” — that’s a life-and-death difference to a hardcore music
fan_

as you say, spotify's lacking catalogue is not news.

I would be interested to know however if _hardcore music fan_ 's makes up the
majority (or a significant minority) of spotify's user base. As such is this
truely a life-and-death difference to spotify as a whole.

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waterlesscloud
I have a strong suspicion that these particular "labels" mostly have 1 artist
on them.

~~~
JonnieCache
This is not the case. They are admittedly all UK-based underground electronic
music labels, so perhaps not the end of the world for spotify, but it isn't
something they can ignore. STholdings has been a successful distributer for
many years, it underpins the UK scene. Others are sure to be watching.

~~~
jopt
If anything, it's more worrying for Spotify that these labels are all closely
related by genre. This leaves a gaping hole in that specific genre, which is
harder to ignore than a few artists here or there.

~~~
marvin
InsideOut (the biggest progressive rock/metal label) removed all their music
from Spotify about a year ago. This would have been a dealbreaker for me when
I started my Spotify subscription, but now I almost can't be bothered to
switch...switching would mean exporting my 200 playlists to the next sertive.

~~~
AndrewDucker
Same here. I lost Frost* from my playlists, but frankly there' so much other
music to listen to that I'm not missing them.

~~~
zokier
That's one scary aspect of music services such as Spotify. They twist our
listening behavior with selective offerings.

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ssharp
If someone is going to solve the music problem, the business model should be
as focused on addressing the concerns of labels and artists as it is on
consumers. If the middleman is making customers happy, and artist/labels feel
like their getting an equitable fee, lock-in will happen and it will become a
strategic disadvantage to leave.

It's far too easy to say "give the customers what they want. Your model is
antiquated, catch up!" That isn't solving a problem. If we only look at the
consumer end, we're bound to end up with lots of models that don't interest
labels and artists, and ultimately will not satisfy customers either. If the
ultimate destination is a world where we largely marginalize labels (which
seems to be something a lot of people advocate as it will push costs down),
then does Spotify get us any closer to that goal? Not as it stands now.

~~~
JonLim
_> It's far too easy to say "give the customers what they want. Your model is
antiquated, catch up!" That isn't solving a problem._

I think the gaming industry is good proof that this DOES work. Steam (and Gabe
Newell) basically came out to say that making it super easy and convenient for
customers basically made it easier to purchase from Steam rather than pirate.
(Myself included.)

The consumer end, especially for media like music or gaming, is probably the
most important for business considerations, in my opinion.

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AndrewDucker
I'd love to know whether Spotify was generally causing an increase or a
decrease in the amount spent on music.

I'm currently spending £120/year on music that I wasn't spending before, but
I'm aware that I might not be normal.

~~~
waterlesscloud
What matters is how much of that spending is making it back to the rights
holders. Is that amount increased or decreased via spotify?

~~~
AndrewDucker
Some good figures here: [http://www.hypebot.com/hypebot/2011/09/how-much-does-
a-band-...](http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-earn-
from-each-music-platform-uniform-notion-shares-the-numbers.html)

~~~
w0utert
Keep in mind that comparisons like this don't take into account that streaming
services like Spotify attract a lot of users who would not have spent a dime
on music distributed in any other way, so they are effectively useless to
compare revenue streams. They are a bit like equating every pirated song to a
lost sale.

Myself, I'm just like the guy above me, I literally spent $0 on music for over
a decade, until I got a Spotify Premium account about a year ago. I think
there are many others like me.

~~~
alexhawket
Services like Spotify and Netflix are marginal cost services. Their intent is
to monetize the previously non-paying customers like yourself at unheard of
low prices.

However, it's not all gravy. Marginal cost services cannibalize a portion of
the existing market. The degree to which this happens depends on the
popularity of the service. It may a small percentage or in the extreme, every
customer.

If Spotify remains relatively small and is kept in check, then it will likely
be a net benefit to artists and labels as it costs them little to participate.

However, it's also a disruptive innovation at a radically lower price point.
If the lion's share of the music market were to switch to Spotify or a similar
service, the drop in revenues would not sustain the market since great content
is labour intensive and expensive.

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fauldsh
This is truly the big problem with Spotify. They're completely at the mercy of
the big labels/distributors, who aren't receiving enough money for Spotify to
matter to them that much. Whereas Spotify completely cannot afford for labels
to pull their music.

The problem is beyond sheer numbers of subscribers as well, Spotify needs
people to listen to less, so that the money generated per song play increases
and makes them a more attractive distribution medium. Radio stations do this
by having DJ's talk lots between songs and varying the popularity of the songs
they play, so they don't play too many new and expensive songs. The only tool
Spotify has to alter the revenue per song play is changing the subscription
price.

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waldr
I wonder how many new fans those artists got from being on spotify, how many
people then paid to see them live and recommended them to their friends. It's
difficult to put a price on that.

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gcp
This is a gamble that can turn both ways; what these labels/artists now risk
is that they basically no longer exist, or are no longer discoverable, for a
large portion of listeners.

~~~
rdtsc
The could also be thinking of building an in-house product similar to Spotify.

Every label is probably thinking, "we can pay some web dev to build us this".
Well, I hope they all do and see what happens.

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mvkel
Oof. The sole reason I have a Spotify subscription is for its vast dubstep
catalog. Checking out my "favorites" playlist today, I hope I don't see half
of them gone!

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mvkel
Yep. Lots of stuff gone. Joker, Mount Kimbie, Luke Vibert, Distance. Huge
names, gone.

This is why subscription models don't work when you're subscribing to the
middleman. If a label suddenly wants to yank their music, they can.

It has nothing to do with Spotify remaining solvent.

~~~
gcp
_This is why subscription models don't work when you're subscribing to the
middleman. If a label suddenly wants to yank their music, they can._

Without a middleman, it's going to be a pain to subscribe to multiple labels.
It would require vast improvements in protocols/infrastructure in an industry
that's extremely slow moving.

~~~
icebraining
Billing would probably the hardest part - customers won't want to pay
different values each month depending on the labels the music they listened to
happened to belong, in my opinion. They (We) want flat, predicable bills, and
that involves having a middleman acting as a "financial buffer", which charges
the same to every client but pays different values to each label.

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JonnieCache
When I read this I was _not_ expecting it to be STholdings! That's about half
of my favorite new music right there. Glad I didn't buy a subscription now.

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bookwormAT
If more gaps in Spotify's library really makes people purchase albums again?

I know it makes me switch to Grooveshark.

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eyko
Scumbag STHoldings. Withdraws music from Spotify. Available in Soundcloud.

~~~
JonnieCache
They only publish clips to soundcloud.

Also, it's their music, they can do whatever they want with it.

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cjstewart88
IMO Spotify is overrated, www.tubalr.com is where its at.

