Realistically, it would be both hard to change structurally and a hard sell for major labels to give up what is effectively a subsidy of popular music by indie fans. Let’s take the author’s thought experiment to its logical extreme:
Imagine “Terry” listened to just one obscure band for the entire month of February. $7 of his $10 subscription fee is going to artists, but let’s say he’s also the only fan of that band on Spotify. So that band has effectively zero percent of Spotify’s plays for the month, meaning that the band gets effectively zero percent of Spotify’s monthly revenue.
Terry thinks $7 went to his favorite band, but it actually got divided up among February’s top 40, with only a fraction of a fraction of a cent going to the band!
That's an interesting problem — this is only true if indie fans listen to less music than pop fans.
Imagine there are 10 users, 9 of whom only listen to pop, one only listens to indy, all of whom pay 10$. Now consider two scenarios: A. everybody listens to 100 tracks per month, or B. pop listeners stream 110 tracks per month, and the indy listener streams 10 track per month
9 pop * 100 tracks = 900 tracks streamed
1 indy * 100 tracks = 100 tracks streamed
total 1000 tracks streamed
total to pop artists = 900/1000 * 100$ = 90$
total to indy artists = 100/1000 * 100$ = 10$
9 pop * 110 tracks = 990 tracks streamed
1 indy * 10 tracks = 10 tracks streamed
total 1000 tracks streamed
total to pop artists = 990/1000 * 100$ = 99$
total to indy artists = 10/1000 * 100$ = 1$
EDIT: Now that I think of it, it probably benefits pop music over metal and progressive rock (or, worse still, classical music), because pop tends towards short songs, so more tracks played over the same period of time.
That point is explicitly addressed in the post. Mainstream users listen more because mainstream users are gyms etc. that just let the top 40 run in shuffle 24/7.
And in most cases, it doesn't really come up until they're audited at least once, which might be never.
I happen to know because I was once in a band and the only money I really ever received for our recordings after the label advance was from ASCAP. Even years later I get a check every few months for a few bucks, whereas I get nothing from spotify or any other music service (even though my music is on there).
So at least for me, I appreciate ASCAP and BMI, even though it is not a lot of money, they are the only ones who have ever paid me royalties as an artist - and their service is free to all artists no matter how small.
at least that's how it goes for my friends receiving via bmi
They are 'non-profits' but so is the NFL.
It still happens though. I can't find any instances any stories being written about this condition being enforced.
Most venues don't want to spend time carefully selecting music when they could instead be focusing on customer service.
[Edit] just read the earlier sibling comment. I'm informing my theory based on my own very occasional usage of spotify. I suspect I'm in the long tail of their business, and I would imagine that the aggregate of businesses that play spotify all day matches up with a good portion of that long tail.
I have a limited set of datapoints, but most if not all of the venues in which I encounter Spotify playlists are playing indie/alternative/etc. music, rather than "mainstream" music - places like my local coffeeshop and game shop, for example.
About your point with indie artists vs top 40- it seems to me to be a problem with fragmentation. Top 40 has much more overlap between listeners and casual music fans vs a much more curated play list for the indie music lover. So out of 100 casual music/top 40 fans the playlist is more or less the same. However two indie rock fans have a higher probability of having fewer tracks overlap in their playlist.
One could also mentioned some sort of tiered payout scheme or a non-linear minimum after a certain amount of plays plus a percentage above that. Likely something that Spotify will experiment with over the years.
If they start doing it the way OP suggests, they DRAMATICALLY increase the number of pools of money they manage (and thus, would need to audit). They'd now be managing (number of copyright owners) * (number of subscribers) pools of money, which is a lot more. Additionally, they likely have some errors in their data, and the impact of an error in this scheme is huge.
tldr: It's too much work for too little money. Improved technology will not change anything because it's a finance process problem, and finance processes have to be regularly audited. The more complicated it is, the more expensive it is to audit.
Pools of money is not really a relevant metric. They collect all the subscription premiums and pay a portion of them out according to their contractual agreements.
Pay(artist_i) = 0.7 * sum_j [ premium(viever_j) * ratio_ji ]
is not that much harder to do.
I agree that auditing would be more complicated, but usually one does selective audits anyway. I doubt this would be a show stopper.
The confusion on the receivers' side would increase massively though. As someone else has pointed out, there would be a lot less correlation between #plays and payout.
(To be clear, I have no real opinion on whether this would be a better schema.)
But yeah, there are many reasons its not calculated this way. Revenue predictability is another reason - companies like to be able to forecast revenue and that's hard if revenue has only a tenuous link to the other KPIs you use to run your business (which is the point you made).
Honestly, the current payout scheme makes more sense. Is it totally fair to the labels? Maybe not; but the labels it's most unfair to aren't making enough under either scenario for it to matter much. Would it really matter to an indie label if their monthly payout was $20 instead of $5? Once you get bigger than a few hundred listeners, the law of large numbers kicks in.
Unless they are doing something special, they are actually just taking a bucket of money and sending it to SoundExchange or ASCAP/BMI (for the US at least) and letting the do the actual distribution. ASCAP/BMI are very used to distributing payments based on plays (they do it for radio, concerts, etc.).
It would really just be a matter of including the play counts for each song every month.
Also, isn't a big chunk of Spotify owned by the major labels anyway?
It's an interesting trade-off: "punishing" artists with fans who only listen to a small amount of music, but who are dedicated to that artist vs. artists with fans who listen to a LOT of music.
My gut is that very few artists are getting "screwed", and those who are represent artists with very few streams (at which point the net revenues are very small and who cares about the difference between 2 cents and .7 cents). For most "edge cases" like the one in the article, there's a user on the opposite end of the spectrum who would balance them out.
That's my hypothesis, anyway.
Even if the indie artists created their own service, several orders of magnitude less people would listen to it.
> My gut is that very few artists are getting "screwed"
Huh? How does that follow?
My gut is that a LOT of artists are getting screwed for exactly the reasons mentioned in the article.
This payment scheme isn't an accident. It favors the big, popular copyright holders to keep them off of Spotfy's back.
Of course, those big copyrights are also who bring in the majority of revenue for Spotify.
The article makes the hypothesis that people who listen to "indie" music also listen to less music. I don't think that's true.
(I don't have hard evidence to back up the counter-factual, but neither does the author in proving the hypothesis. He just sets up a straw man example, then bashes yoga studios, Daft Punk, and the idea of a subscription model as a whole.)
It becomes clear that the scheme suggested in the post doesn't make sense either... so I accidentally left "Everything is Awesome" on repeat all night and now this month indie band X gets 1c from me instead of $5, even though I still listened to their album 20 times like usual?
This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.
Every time somebody listens to a song on Spotify it generates payments, but Spotify does not calculate royalties based upon a fixed “per play” rate.
Your buffet analogy isn’t really apt here because streams aren’t limited resources, and they all have the same effective wholesale cost to Spotify (again, assuming no secret deals).
You're totally right on the merits, but it's worth noting that the big record labels are composed entirely of and built their empire solely upon unjust-seeming secret deals, and we have no reason to believe that they've stopped that modus operandi now merely because they're dealing with Spotify.
I think the real problem that isn't being discussed is the fact that on a service such as Spotify it is impossible for an artist to be independent, his/her efforts WILL support majors via their equity in streaming services.
I listen to Spotify and Pandora almost exclusively. Mainly Spotify. I probably listened to 300 tracks of Emancipator a month on Spotify. At 0.00786 per play, that works out to 2.85. For the last 2 years: 2.85 * 24. That's $56.59. I seriously doubt I would have spent that much on iTunes. In fact, from their site, I can only spend $46 on their music.
In the long run, it seems to me that Emancipator is winning on Spotify, even if I overestimated by a factor of 3 and only listen to 100 tracks a month. Presumably, I will be listening to Emancipator for a long time.
I don't think most people listen to 300 tracks of any artist per month consecutively. Say you are doing 30 tracks per month on average by an artist, that's $5.66, less than buying three 10 track albums.
I have hundreds of albums on CD (I'd guess ~500 or 600). There are many that I probably only listened to five times.
My main gripe is that because of this stupid model, it pushes a lot of the artists I would listen to away from spotify because it doesn't connect them directly with the revenue stream they should be getting from their true fans. Artists have a hard time surviving without that.
But there's a separate listener: the explorer. The value of any given track is exceedingly low, but these are the people you depend on for the discovery function. Personally, I prefer that role, but the cost before Spotify was exorbitant unless you were an industry insider.
If you think on principles, Spotify should in the long term aim for maximum customer satisfaction. This means optimizing the satisfaction per customer instead of per music play, seems to be currently done. By concentrating money on bands each user listens to each of those bands (getting more money) should theoretically improve in quality (and give Spotify more attention), increasing overall user satisfaction. It's a simple reasoning.
Or split Terry's money between the artists they actually listen to.
This scheme is similar to the proposal to calculate artist pay independently for each user, but I think it's a little simpler, since you still only calculate the artist pay out of the global pot, you're just weighing each play by the user's total monthly plays. And you can put a minimum on it too, so the per-play weighting doesn't take effect until the user listens to more than a given number of tracks per month (this way the user who has a subscription but just occasionally listens to a song here and there isn't paying the artist $1 per play, which is to say, until you reach a certain point, listening to other songs won't "devalue" your previous tracks).
The reason Spotify specifically works this way is because any other reimbursement model is untenable in the streaming world. Rev share works "off the top" because the overhead of managing reimbursement (specifically the audit overhead) at the subscriber level would wipe away too much margin. Pandora had an overly complicated revenue sharing scheme and it nearly bankrupted the company until they moved to a model closer to Spotify's.
But more specifically, revenue share works this way because that's how it's defined in the contracts that both the major label and the indie label signed. If the indie labels thought it was a terrible idea, they wouldn't have signed it. Most indie artists anymore simply expect to make next to nothing on distribution and playback of their music: they make their money on the live shows.
There is also the idea that some "users" are businesses playing background music all day, and that they are more likely to all choose the same pop songs (which the most people are familiar with) and to play them all day everyday. Unlike a normal user who typically listens to a wider variety and for fewer hours a day.
The article explained this - because heavy users are playing music 24/7 at gyms, etc., and never play the smaller groups or genres that only some individuals like (and would like to support).
I can't imagine it's being done illegally regularly. It would be way to easy to identify by stream behavior.
I think it depends on local copyright laws, but I think in most places you buy a license to play music publicly and with that license you are allowed to play any music legally acquired.
So basically, my dad, who listens to 60s and 70s music all day on Spotify is mostly compensating top-40 stuff. In the olden days of FM, his listening habits were paid for by the sponsors of the oldies station.
Later the funds are being distributed after "market share", which means most of it will be sent to Taylor Swift or the Michael Jackson estate, even if the restaurant played nothing but epic fusion mathcore.
I'm guessing that the "big five" asked for a model similar to this when Spotify started, because it was a model they understood.
Perhaps there is a simpler solution. Here's one idea: for accounting purposes, only count a limited number of plays per month, per user. It can be the first 100 plays, or if you want to prevent any biasing, it can be a random sample of 100 of each user's plays.
A random sampling can even be audited to prove that it was fair.
My source is the following article over at Complete Music Update, which elaborates on the tactics employed by YouTube in their goal of competing with Spotify:
As it currently stands, Terry's band also gets a small amount of money from people who aren't listening to it, which is something you didn't include in your argument. There's really not going to be much difference for the tiny artists, however you carve it up. $7 is 'effectively zero percent of Spotify's monthly revenue' as well.
It becomes very hard to ensure you are being paid properly in his proposed scenario, I would personally expect it would create even more controversy, or extremely long payment records every month for artists.
For instance say we have 500 paid users. Lets call them user1 through user500. Each user listens to the same number of songs a month as the value following the word user in their name. Then we have 500 different rates at which artists are paid for their song playing ranging from the entire monthly fee to 1/500th the monthly fee. Therefore providing a full accounting of each of those rates would be necessary for an artist to understand why they got paid more the month they had a single play than the month they had 400 plays.
To be fair assuming the minimum song length on Spotify is 30 seconds this record provided to artists would have a max length of (31 * 24 * 60 * 2)+1 = 89281 items for premium users plus items for add supported users if they did not overlap exactly in rate. Assuming all Premium users paid the same rate, which is not the case.
Edit: I ignored the 0 listen use case, as well as spotify's 30% cut to simplify an already complicated 'simple proposal'. I also forgot to account for daylight savings time in which a day can have 25 hours.
Having said that, the accounting doesn't have to be that complex:
1. When paying out an artist, list out the (anonymous) users who listened to their music on Spotify.
2. For each user:
a) Show the what percent of the user's total listening was spent listening to that artist. (e.g. 40%)
b) Multiply the amount the user paid by the percentage from (a). (e.g. $10/month * 40% = $4)
3. Sum all of the amounts from #2. (e.g. $4 + $3 + ... = $total)
Also, accounting would only be a problem for Spotify. 99% of artists would prefer this model, even if it meant more complex accounting.
> 99% of artists would prefer this model, even if it meant more complex accounting.
What are you basing that on?
Artists paid more might not complain, and those paid less (likely the more popular artists) would complain. Then there are new artists, growing artists, and people who would just be annoyed by the complexity.
The theory is simple, but the implementation is a complete nightmare.
EDIT: my point being, if the model is fairer, we can deal with a little extra complexity.
No, that doesn't follow. Imagine one artist is receiving all the money, and the other 10,000 artists are receiving none. Spotify could move to another payment model that would result in 10,000 winners and one loser.
Simple, artists who are paid penauts would prefer getting paid more. We just released an album but we are not putting it on Spotify. Why bother.
I mean that objectively, based on how much money they would make.
99% of artists would make more money in this model.
And, again, cumbersome accounting is a bad excuse for unfair pay.
You just shifted which number you pulled out of thin air, not the fact that you did so. Do you secretly have Spotify's streams database?
Keep in mind things would still need to be split per song also, as rights holders vary per song.
Do you really think giving every artist that many potential lines of accounting every month can be called simple?
Showing my work: 15m paying subscribers = ~150m per month, ~105m paid to artists @ .0052 per song = 20.154 million songs in a month.
Or that it's unreasonable to make them "accounting records"? Not a problem. They aggregate using the current method to limit the number of "accounting records", they can aggregate just fine using the new method. Have "accounting" start with revenue per song the same way it used to start with listens per song, after asking the database to process its 20 BILLION records.
Splitting per song already has to be done. This just gives you a different amount of money to split per song with the existing mechanisms.
This change in how revenue per song is calculated is truly simple.
The only hard part is convincing people it's better.
Adoption has nothing at all to do with complexity. Be careful you're not moving the goalposts.
Bill gates giving me a billion dollars to screw around with is extremely simple, and also will never be adopted.
It is not moving goal posts its considering whether the 'solution' will actually work given circumstances outside the technical feasibility.
But is it Spotify that pays the artists unfairly? AFAIK, Spotify pays to the record labels, and then it is up to the record label, how they distribute the money to the artists? (Also some of the money, the labels keep them selves, and do not distribute to artists.)
That wasn't ever mentioned or implied. The point was, the author doesn't understand how complex his simple solution is.
There are already a bunch of assumptions in the payment model, do you pay per track? (In which case, the artists could game it by sticking in 30 second intro tracks and things like that). Do you pay per minute? (In which case, artists can increase their revenue by putting in dead time in "bonus tracks").
It would be an interesting experiment for Spotify to calculate what the payouts would be given the proposed scheme, and compare the differences.
Anecdotally, the people I have met that work at Spotify are a lot more sympathetic to the indie artist and non-Top 40 music than the average person listening to Spotify. There is a reason they keep building ways to discover non-Top 40 music. I'm sure they are interested in making things better for these types of artists.
So the per play rate should be determined by taking 70% of the user's subscription, dividing that by the number of seconds of streaming that user streamed that month and then multiplying that by the number of seconds that user streamed the artist's song (since songs can be stopped mid-song).
Regardless of how they bill, it's likely that artists will have to, for the most part, just trust Spotify. There can, and should, be independent audits of the billing code. It seems an analogous situation to what the NGC does around computerized gaming systems. Users have to trust that the system is fair, but the NGC is very thorough about checking that code complies with applicable laws.
If the proposal were followed, all transparency is lost.
"Extremely long payment records" is quite an under-statement. Imagine sending a popular artist a 27-million line breakdown (you'd need a LINE PER LISTEN, and what % of a listeners listens that was). That's absurd, and STILL less transparent.
I understand the problem, but this is actually a pretty terrible solution. Future complexities build on existing complexity. I can't even imagine the monstrous data, business, and programming nightmares that would arise from breaking payment down in the proposed manner.
I imagine Spotify already maintains a list of songs played by each user (to build their recommendation engine).
You could report to the artist using a histogram (bucket the listen by the percentage of user's listens they represent).
Also, Spotify could build a nice web interface that allows artists to understand their revenue stream, with various aggregated stats and graphs.
No need to be condescending. People can disagree with you without being technically stupid.
> "SO that's what, a few gigabytes? Takes 30 seconds to download? Then run some stats, get some totals and compare it to your check. What's the problem?"
I think you underestimate the complexity of a database that grows by 20 million records per month, but let's say you solve the technical, computational, and programming issues. It's still a bad idea.
Most of Spotify's customers can open and understand their Spotify payment today. Your customers are not database experts. Most people have rudimentary Excel skills at best. Talk down to them all you want, but they won't know what to do.
So what, they should all hire data analysts? To understand their Spotify invoice?? You know you're using technology wrong when you take something your customers currently understand intuitively, and alter it in a way that requires technology. I understand that you're trying to fix a problem, but you're actually introducing new problems that are far more significant.
Don't let the love of nuance override your customer's experience. That's how you build "perfect" products no one wants.
Why does it need to grow per month? Create a new database each month and archive.
> So what, they should all hire data analysts? To understand their Spotify invoice??
There must be some misunderstanding here. The customer's invoice is for $10 per month regardless of invoice complexity. The record of accounting that goes to the artists is what's being discussed.
It seems very simple to provide a database to artists, then also provide an open source database analyzer that will verify your pay check is accurate.
I am not saying the Spotify method should not be changed just showing that the proposal at hand should not be called 'simple'.
I don't understand this argument at all, which suggests that reviewing a monthly report is an O(n) task. Spotify, if they chose this route, trivially solves this with a simple open source app that analyzes your monthly report making it, basically, an O(1) task.
I realize this the amount they are paying now per song is not too far above the $0.005 amount which rounds to 0, and therefore given changes in the market could potentially drop to an amount which would round to 0 for single play also. I also get that a single penny isn't what anyone is going to be upset about. Also that few artists will have a single play. I just find the low number of plays (1400 in a month isn't really that many) required by a person for an artist to potentially not get paid interesting.
Fortunately, the 25-hour day is in November, which is only a 30-day month. So you're okay on that front.
Here is a link to one such example I have seen which has each song paid at the same amount per play. This has made the number of items on the payment record to simply be the number of different songs which were played by that artist. http://www.digitalmusicnews.com/wp-content/uploads/2015/02/B...
Guess I am just missing your point, if you had one.
Edit due to reply since its getting nested way too deep: Thanks for clarifying. I never meant to say it was a reason to switch, complexity should never be a reason not to improve. I am just trying to say it isn't what I would call a 'simple' solution as the author asserts. I am also questioning just how much individual artists would actually want to receive all that information, which I believe would become necessary for them.
May as well ask people to play some more normal 30s songs and turn off their speakers, avoid being delisted as a non-album.
It's not a rude behavior and is within their right when you utilize their service for free.
Being rude to your free users in order to get them to upgrade is a strategy that works (nagware), but is it a better than other strategies?
When commercials come on, I quickly mute the machine, and I get a nice popup with the next song title to let me know commercials are done.
It's nice because I find radio commercials particularly obnoxious--far more than television--and spotify will sometimes play them back to back.
Speaking of which: their radio algorithm must be broken. I can select an entire genre--say classical music--and start getting repeats within a couple of hours.
(I never saw a cent, but since they're all diplomatically categorised as '< 1000 streams', that would add up to one laughable payday: and besides, I never saw a cent from the labels either.)
I know a lot of older house/trance etc tracks, including genre classics, are stuck in licensing hell after the labels folded, and I would expect that to be the more true the further back in musical history you go.
If I get back into things, I'll probably just give the MP3s away. There's no money in music, and I earn a living elsewise.
Even when I create a station by artist, say The Avett Brothers (considered folk music, I believe), I end up getting repeats quickly--even among the non-Avett artists playing on the station.
My own personal folk playlist (on spotify) has more variety than their own station.
I'm convinced it's an algorithm issue in my case. In yours, possibly lack of choices.
Thanks for the suggestion.
1) I think Ek is right - there isn't much money in the consumption of music. I do believe music is extremely effective at getting people's attention, but outside of that, it's value is much lower than we currently give it credit for.
2) I'm reminded of the TED Talk by Clay Shirky on institutions vs collaboration where he explains power law distribution (watch from 6:01 onward specifically) with regard to photos of Iraq on Flickr. He says (paraphrased) "that figure at the bottom at 10 photos per photographer is a lie. it doesn't matter...the top 10% of the most prolific photographers account for almost 75% of the photos. 80% of the contributors are below the average amount of contributions" This is Spotify in a nutshell. People wan't access to all of the rap music in the world even if they are only going to actually consume 20% of it, so that in the rare chance they listen to one song of the other 80% that it's still made available. In other words, the overall utility of Spotify's system is only valid when it's whole, but the individuals who are necessary for it to be whole are unevenly distributed (in this case number of plays). So the argument then becomes who needs who more?
 - https://www.youtube.com/watch?v=sPQViNNOAkw&t=361
Depends how you consume it. I had to pay nearly £100 to see the Stones live. Online of course you can download it for nothing.
That said, has there EVER been a business model in the US that was profitable for artists? I don't think there was ever money in music for artists from album sales.
The cost of distributing and promoting music is just more expensive than making an album.
But ya, that sure seems like that should be fair enough and profitable enough for the artists I listen to, so if Spotify isn't doing a good job of making sure that is the case then I hope someone else arrives on the scene who does. After all, switching costs are now incredibly low for us as consumers and that is where I want my money going.
If a subscription service could get me out of that chore, I'd do it in a heartbeat. But the music I listen to is crazy all over the place, and if the service doesn't have even one of the songs I want, then it's worthless. Even if I can upload mp3s, now I'm back to maintaining an mp3 library. If I switch services, I have to either pull out my mp3s or hold on to them, and if I'm holding on to them, why not hold on to all of them.
For the last few months I've been using SoundCloud (Still paying for Spotify for every now and then or when a friend requests a song) for mashups (which are nowhere to be found on Spotify) but the SoundCloud iPhone is shit. It looks nice but whenever iOS knocks it out of memory it forgets where you were were and takes you back to the home screen (Which for long mashups sucks a lot). Furthermore it seems WAY more finicky with network connections than Spotify was. I have to turn off Wifi when I get in my car (from home -> work and from work -> home) because if I don't then SC will try to load over Wifi and I drive out of range almost immediately. Then I have to kill the app and re-launch (and re-navigate to where I was) before it will use my LTE connection. Also the mobile app doesn't scrobble to last.fm (neither does the website but I have chrome extentions for that).
I decided, literally a couple hours ago, that I was sick of this and decided to go back to maintaining my own music collection. I've got to do some research on how best to do this (Subsonic or similar on my home server and an iPhone/OS X that let's me stream+cache and scrobble to last.fm) but I believe it will all pay off in the end. I've found that all of these services (Netflix/Hulu/Spotify/Rdio/etc) are great for getting started but that all comes at a cost and it WILL bite you in the ass one day.
Then I want to grab all the files and put them on S3 or something and store the links in the db. Then it's a front-end problem, I'll need a command line interface and then one day I'll make a GUI. I could also find tracks that exist only, say, on YouTube, and store links to those too.
Then I'll be able to use it as a music player and store no music on my local machine.
Then the biggest pain in the ass becomes syncing to my portable devices, which is the only reason I haven't done this yet. I would hate to have to maintain two libraries at the same time. So I have to think my way through that. Though I'm sure I could write a syncer that would work much better than Google Play's, I haven't bothered to sit down to do it yet.
Also, I've learned that reinvention often takes less time than learning someone else's service. If the API is really clean and useful, maybe it's worthwhile, but in most cases, it's not. If only because the vast majority of the time, I'm expected to use what's effectively a beta. I can write beta software too!
For this service specifically, just because I can self-host won't make it any easier to move off of it. Moving from iTunes to Google Play was pretty easy once I grabbed a library off of RubyGems to hook into iTunes. I'd have a coding task to do to move off this too. My own software can have everything I need, so I won't ever need to move off, just write translation layers. It's more work up front, but buys me a lot of flexibility down the road.
Why is this happening? Bugs the hell out of me too
Ideally there would be an "explicit-only" checkbox like there is "hide explicit" one that would always show the explicit instead of the clean version.
Edit: My Spotify forum post for reference https://community.spotify.com/t5/Help-Desktop-Linux-Mac-and/... I can't seem to find my orignal post... Maybe I'm mis-remembering and I just read it on the forums...
They claim that the behavior matches your desired behavior of having a "pointer" that re-updates if availability changes and the explicit version is made available again
Suppose that the average price for subscribers is $7.50 (since students get discounts and they are probably a large chunk of subscribers).
That's (12 * 7.50) / 4 = $22.50
Suddenly that $48 starts to look pretty good.
Of course, music revenue has declined overall in any case.
It appears that the artists aren't getting paid enough because there are not enough subscribers. And there are not enough subscribers because the price is too high for the average music consumer. So lowering the price $5/month might actually drastically increase the artist pay.
I think it's important to remember that I'm speaking as an "unsigned" and independent artist. My income is not noteworthy from digital sales, and frankly does not even recoup the amount that I spend on distribution. However, unlike the majority of "signed" artists, I have extensive rights management avenues, very little overhead, and if I ever do make a lot of money through digital channels, it will not subsidize a system that I utterly dislike on practical and ethical grounds (ex: no health insurance for signed artists). YMMV.
However they also have some pretty giant omissions and even for the top tier track they are very hostile to their users, which means I am looking for something better.
Or the pro-piracy crowd...
As far as I know, the various music purchasing services (as opposed to radio or rental services) directly pay the artists a fraction of each purchase of their music.
And if you're sufficiently popular, you can also sell directly to decrease the overhead.
In a completely different direction, there's also Patreon and other patronage-model sites.
The recouping terms are set in the contract. It's not conceptually different from the term sheets that govern how and when investors will be paid back when they invest in Internet startups.
There are examples of bad labels screwing artists, and there are examples of good labels supporting artists. The terms, not the concept, of recouping are what it make it good or bad.
Ironically, the more exploitative labels are the ones that have done better under the pressure of piracy, because they are more willing to force bands into "360" deals where every revenue stream is subject to recouping: merch, sync, publishing, tours...basically they own the artist. So they're not hurt much by piracy.
But this is not how all label deals are done. Many smaller and mid-size labels have historically limited their deals and depended more on album revenue. These are the folks--the good, artist-supporting folks--who are being most hurt by piracy.
As much as I hate pirates, it isn't the pirates that killed the music industry.
Look at this thread. Most of the people here are not going to spend more than $100 per year on music. That's simply too small a pool for the number of artists that exist.
Think about these same people. They are willing to pay more than $100 for two video games.
Guess which industry is doing better?
Here's a good post:
(I am an unabashed and somewhat obsessive Albini fan).
I think at this point you can safely assume that anyone writing an opinion about the music industry has read that old Albini zine post.
If you'd read Lowery's post, I think you'd see that he in several ways rebuts it.
Why would I take seriously a person who says "Sound recordings are not cheap to make" and goes on to state "Artists still have to pay for that highly skilled labor" when frankly neither of these are true? Maybe it is for musicians who live in a 1960-1995 dynamic, but I have more computing and music making power and ability in my home studio than I know what to do with. Recording studios are dying by the dozens. For all the talk of disruption, that's one legacy industry that is taking it on the chin. Lowery is part of the problem, not the solution. Plus he tosses out anecdotes like "For a very long period of time record labels provided a decent living to thousands of lucky artists" and cites...nothing...
So the most ground breaking conclusion he has is Free+Streaming+Digital Sales? WOW. It's my business model for the past 10 years! Boy did I learn something from this guy! Oh, wait, no I didn't. That link is one of the most rambling and thinly veiled self-serving "discussions" of music in the new digital environment. I'll eventually study it more, simply to use it as cannon fodder for rebuttals. Thanks for sharing, I can always use more proof I know what I'm doing is right.
I think Albini is shackled to view of the industry that rejects anything that doesn't sound like The Jesus Lizard. For a good example of this: read the very long thread on the Electric Audio message board where his fans try to find a hip-hop track he'll like.
More commonly it means that artist royalties - which are a small proportion of label income - don't exceed the initial advance.
Book publishing works the same way. Labels/publishers can be comfortably in profit on a project, but the system is set up to make sure that artists don't get a share of that profit.
Now - labels played all kinds of games to make sure they paid artists as little as possible, up to and including outright lies about the sales and income. (Some writers have discovered that publishers sometimes still try this.)
Even so, most traditional label deals were far more generous to artists than today's streaming deals. Labels also spent significant money on PR, publicity, and payola, which Spotify and YouTube obviously don't.
Even fairly minor bands could live comfortably for a few years from radio play and royalties from a single mid-list album. Top sellers could afford castles, private jets, and custom-built recording studios.
This was partly a feature of scarcity, when there were far fewer artists selling music to a public that was more interested in music.
But it was also a direct result of more generous accounting/royalty options, and the fact that once artists crossed a certain threshold they had enough spare capital to start developing alternative stand-alone businesses.
If this were true, no one would work in music for more than a few years. No artist makes a hit every time.
The Eagles made $100 million last year; Springsteen $81 million; Bon Jovi $81 million; Calvin Harris $66 million; Toby Keith $65m; Taylor Swift $64m; Bruno Mars $60m; Pink $52m; Roger Waters $46m; ... Muse $34m, Gaga $30m, this list just keeps going.
Michael Buble made $1+ million per tour date in 2014 (making $51 million overall).
From the info I can find, there are at least 100 individual artists making over $5 million per year.
I think that doing only 24 tour dates as a mid-popularity group, while not exactly managing costs well, to be an obvious setup to lose money. If they want to treat it like a business, they're doing a terrible job of running a business.
In what way did they not manage costs well? Even if they pick up 10% across the board, they're still not making money.
Per diem of $20. Not per meal--per day--$20 for 3 meals.
$5K for insurance--we paid that for a group with WAY less liability.
$125 per day for hotel room. Okay, that's about the only thing that might be a little high. But you aren't going to find much under $80 that isn't a dump--and you're packing 2 people per room. Even if that line item is 50% high, they're still not making money.
There is very little I would call fat on this breakdown.
Artists who don’t like it or aren’t getting enough value — either through payouts or marketing - should simply opt out of the system (if they can; in many cases control might rest with their record label or another rights holder). Some artists never opted in (the last time I checked, this included AC/DC) or withdrew part or all of their collections (Taylor Swift).
I’ve watched the Spotify model appear in the ebooks marketplace, through services such as Oyster and Scribd. They target readers, and ultimately seek to ensure large payouts to investors, platform owners, and large publishing partners. Authors have largely been treated as an afterthought. Kindle Unlimited is even worse, demanding exclusivity and lowering sales of many authors.(1)
I believe the time has come for recording artists, filmmakers, authors, and other media producers to band together to fight unfair or predatory platform practices. Subscription services may be great for consumers, but they don’t pay enough to the people who are creating the products that draw audiences in the first place.
However, he then makes the leap that that means that less popular artists are subsidising the popular ones, which has yet to be proved.
That being said, there's no proof of this without data to back it up.
And yes, I'd would expect the tail to be fragmented. Lots of people listening to but a small and mutual exclusive set of bands. Next to the odd main stream one.
So perhaps it is not really a question of light users sponsoring heavy ones, but more the banality of average taste.
Would love to see some stats.
Jack Stratton's proposition is wagered on the proposition that the users who listen to his tracks are ones who don't listen to very much other stuff. His listeners pay $9.99 per months, but don't stream very much, and a big chunk of what they do stream is Stratton's material. He doesn't want most of that $9.99 going to those other damn artists, who are just random junk whose material isn't sought out by anyone, but streamed randomly in Yoga classes, elevators, supermarkets or wherever.
If there is some user who paid $9.99, 70% of which is $7 going to the artists, and half of what that user listened to was Stratton's tracks, Stratton wants $3.50 for that month, for that user alone. Add to that other similar users, and extrapolate to twelve months and you have some non-negligible cash at the end of the year: better than a fraction of a cent.
Problem is, no matter how you slice the pie, it is a zero-sum game. There is so much revenue and so many artists.
Most artists, likely including Stratton, will lose this zero-sum game no matter how the pie is carved.
There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts. The proposed rule would just create a tiny group which gets quite a lot more revenue than the rest, at the cost of slightly impoverishing every member of the remaining group, who then gets a slightly smaller fraction of a cent.
It's actually a good rule from Spotify's POV because this tiny group would represent "success stories" which Spotify could use for promotion.
On a different topic, this kind of reminds me of the whiners who complain about online dating sites. "I'm obviously a more qualified bachelor than most of the losers who make profiles on this site, so if only the implementation of the site were based on somewhat different rules, then I would easily get replies from the women I'm interested in. I might have found a girlfriend long ago if it weren't for this damn dating site. Waaaah ... sniff!"
Nope, this rule would do the opposite. Currently, only a very small fraction are getting any "real" money at all. This would cut out some chunk of their revenue and distribute it slightly more evenly across all the artists. This is a more "fair for everyone" approach, in the sense that socialism is more "fair for everyone".
(Personally I like the idea a lot, but it sucks for the artists currently making a killing on Spotify. Perhaps for big labels as well, though since they have a ton of small artists typically it might be near neutral for them)
It is also more correct, your subscription is distributed to artists whose music you actually listened to. It repeat listens are accounted for, then it would be even more fair, since you usually listen more to your favorite artists.
Currently the distribution just isn't correct. This is probably because of technical reasons.
How on earth is it a "zero sum game" that they are paid their fair share of the cut?
> There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts.
You just pulled those numbers out of your ass.
In the sense that it is a fixed income situation, where the question of how the income is divided does not make everyone richer as a group. If you change the rules for dividing the spoils, those who get more income do so because someone else is getting less. This is consistent with the definition of "zero-sum game".
> that they are paid their fair share of the cut?
There is no unique definition of "fair share" here. It is not inherently "fair" that if some subscriber paid $10 for a month, and forgot all about the service and ended up listening to only one song that month, that some artist should get $7 for that. It's not "unfair", either.
> You just pulled those numbers out of your ass.
That is true, and if you would prefer the numbers out of your ass, then you do the pulling; I'm not going there, sorry. Ass numbers for the sake of example is all we are going to get here, though.
And do total stream divisions take into account only premium accounts? Or do they also include free ones? Because ya, as a premium user, I really do want (and perhaps naively expected) my $9/mo split between the artists I listen to, which certainly seems the fairest.
* A stream from a free user pays the same as a stream from a paid user, and
* Paid users bring in more than free users
I don't think Vulf's idea works.
Why not keep the existing royalty structure, but split the royalty pie based on user initiated streams and computer generated streams. If someone buys premium and only listens to Yoga Radio:
70% Existing Yoga Radio Big Pool Royalty Structure
35% Existing Yoga Radio Big Pool
35% Direct cut determined by per-listener chart
0% Yoga Radio
70% Direct cut determined by per-listener chart (all to one with love from Mom)
Best of both worlds, no?
I guess not.
It does seem more fair for the artist this way, though it probably means they need to do more crunching with map reduce or something.
> Instead it was $0.00786.
This sounds like a much better way to do it. The artists should ask Spotify to change it. However I guess the big players don't really want it changed.
I love Google Music, and don't understand why everyone's so hopped up on Spotify, just because they were "first" to market (and they weren't).
(a) “Subscription Fees” shall be the greater of:
(A): Monthly Subscription Minimum * number of Google Play music subscription service subscribers on the last day of such month * Your Subscription Activity Ratio
-- OR --
(B): Subscription Revenue Share * Music Subscription Revenue * Your Subscription Activity Ratio
B is exactly what is laid out in the parent article, A is a subtle twist on it. Both of them are still [Google's revenue] * Your Subscription Activity Ratio, where "Your Subscription Activity Ratio" == "the fraction: (i) the numerator of which shall be the total number of streams and plays of Your Tracks from the Google Play music subscription service; and (ii) the denominator of which will be the total number of streams and plays of all tracks from the Google Play music subscription service."
... this makes me sad.
realistically, this means the artist would have to get more than fifty thousand streams per month to equal just one subscriber.
There's just not enough money in ads. This is why things like Patreon exist.
My guess is that great albums got listened to a lot -- driving down the revenue "per play" but generating great word of mouth and lots of net record/cd sales. How much of that applies to Spotify?
Assuming 12 songs on a CD, and that each CD costs $2 to print, distribute, and account for merchant margins, that gives us effectively $0.66666 per song. At the rate of $0.00786 per play on spotify, you'd have to play each song on your physical CD 84 times (or 1018 plays across varied tracks) before it produced less revenue for the artist than a play on spotify.
I'm guestimating here, but I'd say that in general artists/record companies benefit more from CD sales based on those numbers.
Maybe this is obvious to others? But not to me.
the main point I was making was that comparing 20 years ago to today in this case is likely not equivalent (at best I would say it's an incomplete view)
To a certain degree, "Buying an album" has always been a gamble. Spotify/Amazon/etc make it easier to (a) not buy albums that suck, and (b) buy more singles instead.
Could be worse. They could have their own musicians record popular songs and classics, and just pay the statutory royalty to the composer. Seeburg did that in the 1950s. They sold the Seeburg 1000 background music system, and rented out phonograph records of background music, all recorded by Seeburg musicians. Stores rented and serviced the simple record changer, which endlessly played a stack of 25 records (both sides), about 50 hours of music. It's not a jukebox; it's much simpler.
Instead of copyrighting the disks (back then you had to register a copyright and pay for renewals), they used a primitive form of DRM - the records are 16 2/3 RPM, 9 inch diameter, 2 inch center hole, 0.005" stylus width, mono. This is incompatible with everything except a Seeburg 1000, though it's not hard to adapt a turntable to play them.
Someone has digitized the available Seeburg 1000 records, and you can listen to about 6000 songs of '50s - 70s background music.
I think that's because buying a digital album has so far been really unrewarding.
Artists need to come up with a package for their music that people actually want to buy.
I always felt kinda stupid paying 10 Euros for an album, then spending 10 minutes fixing metadata and downloading a halfway decent cover image from discogs.
You'd get better data quality from filesharing sources, since fans obviously care more about releases than labels. Same goes for movie releases btw.
The end result is that rich and well known artists will end up getting more money, and lesser known artists less.
Would the users follow?
I would imagine Taylor Swift with Blank Space might have cleaned up. Is there a source of public data on this?
1) as in all the people who get paid off the artist's music including, hopefully, the artist
The reason this change would very likely not benefit indie artists is simple:
People who listen to more music are more likely to have a high proportion of their music listening being "indie" than those people listening to less.
Pdpi's example explains very nicely how this would benefit pop artists over indie.
Does this system have other benefits?
Yes, a wonderful inadvertent thing you get for free is eliminating fraud listening. People would be unable to create accounts to listen to one artist on repeat all month long and laugh six months later when the checks come in (see the Vulfpeck story for those unfamiliar)
Would some indie artists benefit from the change?
Yes, of course some artists wouldbenefit, that's pretty much inevitable under any calculation methodology change.
None of this addresses the issue of time spent listening. Classical and Jazz payouts will consistently under-index people's time spent listening simply because the track recordings are so much longer than the average recording length. A time spent listening payout system would be a huge improvement, but then you can imagine people trying to manipulate this (throwing 25 minutes of silence on the last track of the album anyone?). Smoke and mirrors...
The indie music industry as a whole is already selling more than the 3 major record labels together in the US. Once that 20th century model is 100% over, we will see technology doing really cool things in collaboration with music.
Also think about the talent pool. The only longer line at the job fair is probably for playboy photographer.
Tons of people wanting to make music + low barrier to entry = Cheap music
The only thing attempting to hold this dinosaur market afloat is monolithic record companies, and their stranglehold on the popular genre seems to give them enough leverage to arrange a deal in their favor. Hence what we observe here.
What will likely end up happening is the next cost of music will become zero to the end user and bands and artists will find new revenue streams. Such as live performances, or perhaps product placement. Or does economics not apply to art?*
*I'm the weird guy who doesn't like music so I may be entirely wrong.
* elevator music
* toddler songs (audience loves hearing that same song for 1,000th time)
On the other end of the spectrum you have audio content that is intended to be listened to once, with extremes being audio books and radio news.
An artist optimizing for endless replays would do well on Spotify: "E.D.M. artists like Avicii and David Guetta are seeing payouts in the millions. Avicii’s “Wake Me Up,” the most streamed song on Spotify, has more than three hundred million spins, which, using Spotify’s benchmark per-stream rate, would be worth about two million dollars to the rights holders." http://www.newyorker.com/magazine/2014/11/24/revenue-streams
But it's not perfect model for every artist out there.
Following this suggested model, free users listening wouldn't help the artists at all - is that really desirable?
>Following this suggested model, free users listening wouldn't help the artists at all - is that really desirable?
I doubt it. Paid users are usually free users first. No free users means fewer paid users down the line.
That said, I don't like the model that's currently in use for online-only music stations... it's tough all around.
For instance, it is probably true that to some people $5 dollars a month is nothing compared to the torture of listening to a single ad ever.