
Taylor Swift’s Stand on Royalties Draws a Rebuttal from Spotify - dnetesn
http://www.nytimes.com/2014/11/12/business/media/taylor-swifts-stand-on-royalties-draws-a-rebuttal-from-spotify.html?ref=technology
======
trjordan
The interesting thing about the "we're better than piracy" model is that you
_always_ have to be better than piracy, because piracy will always be there.

Unlike piracy, when you pay for a service, you're making a judgement about the
service as a whole. Many people are willing to use a couple different free
services, but probably not piecemeal paid services to get the same experience.
So, unlike piracy, Spotify has to have a catalog that makes most users think
"yeah, they have all the music I want to listen to". Especially as a top
artist, Taylor Swift has a lot of power in this relationship, because of the
impetus that Spotify has to provide a "full" catalog.

Hopefully, this model continues, and artists like Taylor Swift continue to
push back. The system of 20 years ago had too little power in the artists, too
much power in the distribution, and too little choice for consumers. I like
that the middleman / channel delivery is now the one who has to provide value,
and the artists can take their music elsewhere. It gives artists power, allows
competition in distribution, and provides more consumer choice. We could go
too far along any of those axes, but this sort of fight is, imho, pushing
things in the right direction.

~~~
scoggs
It really drives things home since it's Taylor. When I think of most music
services especially when you mention the point of "piecemeal" ways to cobble
together services to ensure you can listen to EVERYTHING you wish, I think of
myself (sort of a savvy power user) and I think of the large majority that are
just basic computer users.

A utopian music situation? The only way to truthfully do that is to delve into
the illegal download category unless you are dead set on buying physical
copies of everything, or settling for streaming through an iTunes, Spotify,
Pandora, etc. When I think of reasons why X service exploded or Y Software was
the definition of music downloads it usually points to one common feature:
ease of use. Sure, anybody can learn to torrent music, surf IRC chat rooms for
albums and songs, get accepted to user groups or private sites of the like,
but until it is as easy as AudioGalaxy, Napster, Spotify, the iTunes Store,
etc., and it's back catalog can rival the greatest music pirate -- it will
never permeate the way a company would wish.

It's a weird tango these companies play. They have the blue print of success
(if you ignore legal standpoints) with the first two programs I mentioned
above (AudioGalaxy / Napster) + any torrent site / "warez" site. The trick is
convincing the music industry to play ball. So long as they have their greedy,
sticky fingers in the giant pot somebody is always going to leave the deal
feeling like a loser.

~~~
waps
Apparently ms. Swift made ~$500k USD in revenue from Spotify. That's
equivalent to 50000 records. She sold over 1 million records.

Given that one has to agree it's a near-certainty that Spotify eats into
record sales at least a bit ... so her position certainly makes sense.

------
nfm
> Part of Spotify’s pitch to the music industry has been that its royalties —
> as low as 0.6 cent per stream, according to the company — will accrue to
> significant levels as the service grows

> “Wake Me Up” had been played 168 million times in the United States on that
> service, yet yielded only $12,359 in publishing royalties, of which he kept
> less than $4,000.

These numbers don't _remotely_ add up - they're off by 2 orders of magnitude.
What gives?

~~~
goatforce5
Let's say a radio station with 1m listeners plays a song 168 times. How much
does the radio station pay out for those 168 plays, and how much ends up as
publishing royalties, etc?

I honestly have no idea...

~~~
deweller
Been a while since music business class, but here is what I remember:

Radio stations don't pay per play. They buy a blanket license from performing
rights organizations. Then those organizations listen to sample data and divvy
out payments to publishers according to what their sample data says.

------
sandstrom
_You can’t look at Spotify in isolation – even though Taylor can pull her
music off Spotify, her songs are all over services and sites like YouTube and
Soundcloud, where people can listen all they want for free. To say nothing of
the fans who will just turn back to pirate services [...]. And sure enough, if
you looked at the top spot on The Pirate Bay last week, there was [Taylor 's
latest album] '1989'..._

This is the money quote. I'm one of them, a paying Spotify subscriber who
downloaded Taylor's 1989 album off PB.

Also, I think artists confuse money extracted 'per pay' with money extracted
'per customer'. They should focus on the latter.

If my choices as a consumer are these two:

1\. Buy 10 plastic disks with music etched into them (CDs) per year, for $120
or

2\. Pay $120 to artists and listen to all music.

These two are equivalent earning streams for artists (ignoring the money that
record labels siphon away), but I get more value out of the second option (2).
And the difference is huge!

In fact, when I only had the first option (1) I rarely took it, i.e. I didn't
buy many CDs (before piracy/internet). So, the artists didn't extract much
earnings out of me.

Then comes Spotify (and friends), and suddenly there is an outcome where I'll
part with $120 per year and artists earn money from me that they didn't
before. They should embrace that, not focus on money per 'played song', rather
on 'money earned per consumer/year'.

~~~
chez17
You're "money" quote is provably wrong though. Her music isn't all over
Youtube and other services. In fact, you proved this by having to go to the
Pirate Bay to download it. They've done a great job at stopping it being
available for free anywhere legally. Seriously, try to find any song from 1989
on Youtube that doesn't have a music video released. You can't.

>Then comes Spotify (and friends), and suddenly there is an outcome where I'll
part with $120 per year and artists earn money from me that they didn't
before. They should embrace that, not focus on money per 'played song', rather
on 'money earned per consumer/year'.

Honestly, why should she? She just sold 1.3 million albums in a week. Talking
in absolutes about this is silly. Just like when Radiohead released a pay what
you want album, different methods will work for different artists. I commend
Taylor for not doing what everyone else does just because. It took balls to go
against the grain and she came out on top. Good for her. She's not advocating
to make Spotify illegal or anything which would be where she loses me. Spotify
is great for some things and great for some artists some of the time.

~~~
jusben1369
"It took balls" \- might be time to reassess the expressions we use to
indicate bravery.

I agree with you. Her album is the biggest album in potentially 10 years (The
last album to sell this many in the first week was 10 years ago when overall
sales were double) So it's going to be on the top of everything including PB.
I think all of us would find it objectionable if we were told "You have to
change the way you do business otherwise we're going to set up an illegal
operation and kneecap you anyways" It may happen and it may be reality but
that doesn't mean it's even close to being a justification for why an artist
should change their approach.

~~~
omonra
Is there another hormone more correlated with brave (or reckless) behavior
than testosterone?

~~~
jusben1369
Whatever it Miss Taylor has it in spades based on his admiration.

------
dustingetz
> I’m not willing to contribute my life’s work to an experiment that I don’t
> feel fairly compensates the writers, producers, artists, and creators of
> this music

A lot of megastars acknowledge that the success of their "life's work" is
somewhat a function of luck. Internet radio's artist discovery mechanics scale
down to give exposure to smaller artists. It seems to me like we're headed in
a direction where a manufactured top-40 single, funded by huge corporations,
isn't a prerequisite to success, and that just doesn't seem possible without
disruptors like Spotify.

~~~
jmagoon
Here was a good perspective from a 'smaller artist' (on Merge and Secretly
Canadian) from reddit on this subject:
[http://www.reddit.com/r/Music/comments/2ld32y/the_1_hit_sing...](http://www.reddit.com/r/Music/comments/2ld32y/the_1_hit_single_wake_me_up_by_avicii_was/cltpz8l)

Basically, they have seen decreased sales, increased streaming, and no
increase in touring opportunities due to streaming services.

~~~
kenjackson
Streaming creates non-fans. Buying a CD creates a fan. In some rare occasion
I'll hear something I like so much that I then download the album, but in most
cases I just stream a subgenre of music.

The end result is that I don't know any artist very well, although I'm well
versed in the subgenre. I have no desire to go to a show, as I don't know any
artists.

Buying a CD, while a bigger decision, almost entrenches you as a fan. I'm much
more likely to want to go to a Taylor Swift concert if I've listened to her CD
100 times (and I'm almost certainly not going to listen to ANY album 100 times
with Spotify).

Neither model is better than the other to me. But they are different, and
value accrues in different ways for the models.

~~~
poloniculmov
My experience is totally different. Streaming made a fan of so many artists
because I can listen to a whole album and connect to their music. And it also
made go to a lot more shows, because I can get familiar with the artists
before the show.

I guess that the difference might come from the fact I've never been a big
buyer of CDs, growing up in Eastern Europe meant that I couldn't really afford
music so pirating MP3's was the norm.

------
ilamont
I posted the following comment at the bottom of Ek's post, but it was removed,
so I am posting it here.

 _I really want artists to understand: Our interests are totally aligned with
yours._

Spotify’s interests are not totally aligned with artists’ interests. Spotify’s
interests are aligned with record labels and assorted middlemen, advertisers,
and investors like Sean Parker, Li Ka-shing, KPCB, Coca-Cola, Fidelity, and
others who want to see a big payout on their $500+ million investment. Artists
get lip service when they complain, and at the end of the day, they get the
scraps after everyone else has taken their cuts.

~~~
sandstrom
This is a good point. Record labels probably played an important role when
sales was physical (stores, supply-chains, printing CDs, etc). Nowadays: I
don't know what they do.

Spotify is owned >30% by record labels, so your point is an important one!

------
hayleyanthony
An interesting thing happened when I bought _1989_ : I listened to it.
Repeatedly. And I think that’s partly because I bought it instead of streamed
it. Paying for it created connection that made me a bigger fan.

I use Spotify like crazy, and I hadn't bought an album in maybe a year. I
listen to lots new music, almost none of which falls under the header
mainstream pop. But most of this music gets a couple listens and I move on.

Maybe it's just because subconsciously I feel like I want to get my money's
worth, but this Taylor album has been on regular rotation. And I definitely
wasn't a fan before. She’s become a fairly big deal with my peer group (women
in their twenties in New York), but I wasn’t taking part in the love. Now I
am, and I think it’s partly because just a little bit more was asked of me.

------
kenjackson
If Spotify can provide the revenue that matches traditional means then I don't
think Swift is likely to leave. Make the model more viable than the existing
model and you won't have people leave it.

If people are going to pirate anyways then she'll be back, but it seems like
she made a pretty smart move to me. Maybe it won't work for everyone, but I
don't think she was telling everyone to leave Spotify.

~~~
tormeh
I think Spotify provides more per listener over a lifetime than any other
medium. The problem is that small labels and artists don't get anything of
that. It's the big four labels that gets almost all of it. That's the only
explanation for how Spotify pays out so much, yet artists receive so little.

~~~
pessimizer
>I think Spotify provides more per listener over a lifetime than any other
medium.

More what? Revenue?

------
Schweigi
Is there an overview on how Spotify distributes the money? In my opinion when
I'm listening to one single song a month then the artist (incl.
label/writers/..) should get at least 60-70% of this $10 (paid subscription).
This would make it a good deal for smaller bands too because they would get
the full amount if their album is the only thing I'm listening too. But it
seems the current mode is that even if I'm listening to one single song a
month the payout is as little as $0.006/stream.

------
frandroid
I think Swift withdrew her music from Spotify simply because she can extract
more money from sales this year. New albums stimulate back-catalogue sales
like nothing else. When she feels like she won't have a new album to stimulate
her sales, she'll put her songs back with the streaming services and they will
be happy to stream them again.

~~~
AdamFernandez
That's exactly right. Some artists can do this, but most cannot. She is doing
the right thing from a business perspective. It makes no sense for her to stay
on Spotify with her clout and the demand for her music. This is pretty
straightforward.

------
omonra
A couple of points:

1\. Don't care who TS is. If she was on Spotify, I'd give her a whirl - but
since she's not, just not sufficiently bothered.

2\. I think she (or her handlers - whoever makes the decision) make a valid
point - artists should be able to pick whether they appear on the Spotify free
version.

3\. Lastly - all the talk about 'artist pay per play' is misdirected, as far
as Spotify is concerned.

The only metric that matters is what % of revenue they pay out to the rights-
holders. The number now is 70% - ie they keep 30% of total revenue for
themselves and give 70% to the label (who is then free to pay the artist as
per their agreement).

We can discuss whether 70% is a fair number (I personally have no idea). But
talking about anything else is missing the point - since it ends up being a
discussion about split between the label/artist/producers/etc - which Spotify
has nothing to do with.

------
riffraff
OT, but why people in this page often refer to Taylor Swift as
"Taylor"[0][1][2][3][4]?

I have never noticed this sort of first name usage before.

[0]
[https://news.ycombinator.com/item?id=8592523](https://news.ycombinator.com/item?id=8592523)
[1]
[https://news.ycombinator.com/item?id=8592325](https://news.ycombinator.com/item?id=8592325)
[2]
[https://news.ycombinator.com/item?id=8592395](https://news.ycombinator.com/item?id=8592395)
[3]
[https://news.ycombinator.com/item?id=8592393](https://news.ycombinator.com/item?id=8592393)
[4]
[https://news.ycombinator.com/item?id=8592276](https://news.ycombinator.com/item?id=8592276)

~~~
waterlesscloud
Part of the image she sells is the "girl next door"/"normal girl just like me"
thing, so that probably leads to her fans thinking of her on a first name
basis. It's very likely beneficial to her that people do.

I'm skeptical about that in a lot of cases. For example, someone once pointed
out that people called Spike Lee "Spike" a lot, where they never referred to
Kubrick as "Stanley" or Scorsese as "Marty", and that there was likely a very
subtle issue of respect there. That's probably accurate, and "Lee" is probably
the more thoughtful choice there. But Lee, Kubrick, Scorsese, etc are selling
an image of authority. Well, they aren't doing it themselves consciously, at
least no more than any other director does as a matter of necessity. In any
case, it's part of how directors are thought of, and Lee deserves that same
kind of respect.

Taylor Swift, though, is selling something different.

~~~
freehunter
Lee is a much more common name than Kubrick or Scorsese. Spike stands out
more. If I say Kubrick, there is only one (or possibly zero, if you don't know
his films) person who comes to mind. If I say Lee, well you probably know
someone personally who has the first or last name of Lee, or possibly Li, or
you might even hear, with your own ears, "did you see that new [Jet] Li
movie?" when I mean "did you see that new [Spike] Lee movie?"

In places where it's common to call people by their last name (military,
sports, etc), they don't do it out of respect, they do it because last names
tend to be more unique than first names.

~~~
waterlesscloud
To be clear, this was in the context of discussing Lee's films. There was no
ambiguity.

------
spott
I think music as an industry is going through a little bit of a
transformation. With an increasing breadth of selection, and a stagnating
amount of money being spent on music and entertainment (relatively speaking),
money is going to be spread around a little more.

The superstar artists aren't ever going to go away, but they are going to be
fewer of them, and they aren't going to be as big. The sad part about this is
that the little guys, the "middle class musicians" are going to struggle to do
it professionally.

Is this that surprising though? There are plenty of very very talented
musicians out there who DON'T make enough to go pro. Those who do are more
lucky than good, and this shift will both enable more people to gain an
audience, and prevent more people from making enough to live off it.

------
eikenberry
Music is not a product, it is culture. For a time there was a distribution
problem that allowed it to be equated with the physical means of distribution,
and that was a product. That period has past, and the sooner artists realize
this the sooner they will stop looking foolish and anachronistic.

On the other hand, Spotify is a service for finding and enjoying music. People
will pay for a good service and this is why there is a business model here and
a potential revenue stream for artists. It isn't the entire future of ways to
make money from music, but it is one of the best upcoming models.

------
valgaze
I heard an analyst say that Swift could be one of the last who is able to
release a platinum album.

The thinking is that the people who buy actual full albums are going the way
of the Dodo. It'll be harder and harder to sidestep these "alternative"
distribution/streaming channels.

Edit:
[http://www.forbes.com/sites/zackomalleygreenburg/2014/10/30/...](http://www.forbes.com/sites/zackomalleygreenburg/2014/10/30/why-
taylor-swifts-1989-could-be-the-last-platinum-album-ever/)

------
toasted
Big record companies support spotify because they have been given billions
worth of equity in it.

Artists have been given no equity in spotify. They should pull their music and
move to another platform offering ownership.

------
dyeje
As a musician, this is a topic that hits close to home. The fact of the matter
is that Spotify is making boatloads of cash off the works of artists, and they
are not paying out enough to those artists.

Straight from the spotify website [1], they say the average revenue from a
stream to a rights holder is between $0.006 and $0.0084. The poverty line is
$23,283. That means an artist needs 3,326,142 plays in a year to just hit that
line. That's not sustainable for the vast majority of artists.

[1] [http://www.spotifyartists.com/spotify-explained/#wait-i-
thou...](http://www.spotifyartists.com/spotify-explained/#wait-i-thought-
spotify-paid-a-per-stream-rate)

~~~
manuelflara
Spotify already pays 70% of their revenue in royalties to record labels. What
do you think would be fair? 90%?

~~~
rayiner
Spotify just moves bits from point A to point B. They don't even help get the
music created the way the studios do (by providing the equipment). And
technology makes moving bits very cheap indeed. So why isn't 90% reasonable?
Or 95%?

~~~
delinka
Servers, storage and bandwidth do indeed have costs. The labor involved to run
this infrastructure has a cost. The existence of Spotify fills a demand by
artists' listeners. That's a lot of value. Are you suggesting that the value
provided in meeting customer demand is worth "nearly zero"?

------
6stringmerc
Spotify may be one big experiment to her, but to me, the music industry itself
is a giant insulting failure to anybody not in the top 1% of artists. Thus,
6StringMercenary music is on Spotify, because 6StringMercenary cares more
about art than money. 6StringMercenary also genuinely knows the value of
money, works 40 hours a week just to be able to have the PRIVILEGE to be a
musician, and therefore thinks Taylor Swift hasn't ever had a real job and
should get off the diamond encrusted 38 story tall barn full of horses she's
shouting from.

~~~
aarondf
Oopsies. You just claimed that Taylor Swift hasn't ever had a "real job".
Taylor's job looks way different than yours or mine, but I'd guarantee you
that that girl works, and works hard.

Just because she's rich and famous doesn't mean she isn't working.

~~~
onedev
She probably works harder than any of us here. People vastly underestimate the
pressures that surround superstardom and maintaining that level.

~~~
aarondf
Exactly.

Also, she's stayed pretty normal. I say this without sarcasm: it appears hard
to stay "normal" as a young, up-and-coming _superstar_.

~~~
frandroid
I wouldn't call someone who's beaten a Billboard record for most albums that
sold 1M+ copies on its first week up and coming anymore. :)

~~~
aarondf
I agree! I meant to say that she already stayed normal through her up-and-
coming phase, which has now passed.

