I feel like it's a false analogy to compare Spotify Streams to CD sales. For a fairer comparison, you should measure against something more ephemeral.
The biggest radio channels in the US have a few million listeners each. Let's say your record does ok, and gets airtime on a few second-tier radio stations. For easy math, let's do 20 plays * 50,000 listeners per play. This also gives you a total of one million listens.
I would be _extremely_ surprised if they would net much more than $5000 from these radio listens.
I'm with this all the way. Appreciate this article is from 2016, but surprised the physical sale is still compared to Spotify streams. They're very different and I think Spotify is far more like radio with choice (a bit like Netflix and TV). I listen to lots of stuff on Spotify I never would have bought 15 years ago (thus no sale would be accounted for). But conversely, I suppose, I rarely buy a lot of records I listen to with fair frequency on Spotify. That said I go and watch live shows of a bunch of people I probably wouldn't have.
Times have changed. Everyone has to adapt. I doubt as many people are buying DVDs or Bluray anymore, right?
They haven't recently changed the rules. The average for terrestrial radio in the US is around 12c/play.
In the UK it can be up to £15/minute plus £35/play on a top radio station like Radio 1. Less mainstream stations pay less.
The artist may see half of that depending on their publishing deal.
So... Spotify's microcents per stream are a joke.
Around 80% of Spotify revenue goes to rights holders - i.e. a handful of big record companies.
Around 10% of that 80% goes to artists. [1]
The record labels keep the rest.
[1] The exact accounting details are byzantine, especially in their creative use of expenses which diminish apparent revenue. They also vary from artist to artist. Top artists get a much bigger cut than newly signed artists. But no one gets much from Spotify plays when compared to radio payments.
You need to divide that £15/minute+£35 per play by the number of listeners for them to be comparable. Radio 1 breakfast show has about 9 million weekly listeners. I've no idea how many people are listening at any particular time, but you'd still be talking micropennies.
> So... Spotify's microcents per stream are a joke.
If you treat it as analogous, sure, but it's not.
Airplay is finite in a way that streams are not. There is also a greater cost to get in to that airspace. So it's not surprising those costs cascade down.
People frame streaming like this all the time. Streams versus CD sales versus radio play. They're incomparable ecosystems, though. Costs, mechanisms, value ... none of it is 1:1 with the old world.
1 play on radio 1 could easily be 1 million listeners for which they get 100 quid you say, whereas this band say they got $5000 for a million listens on Spotify.
This is..complicated. The performer doesn't get money, but the song writer does. These are often the same person, but not always. Must suck for bands whose biggest hits are cover songs.
I thing the general Idea is, with spotify, people are not buying CDs (or digital files) anymore, because they have the liberty to choose all the time what they wanna hear. So Spotify must compensate for the lose. At the end Spotify is a mix between radio and CDs, but more on the CD-Side, because with Radio you usually can't choose what you hear.
I wonder if Spotify also pays different depending on whether people choose a song or whether it was autplayed because of some public playlist or radio-feed (does spootify have something like that?).
I somehow keep being fascinated by people think they're ripped off. I mean sure, Spotify is making a decent buck out of it, but it's not like the artists are doing it for free.
There's much more to the whole process. Firs to earn something per play there need to be ads that finance it. Then imagine the technical hurdle and cost to host such a platform (ie Spotify cut) and then you actually being worth a damn as an artist.
1M views might seem like a lot, but actually its quite a limited resource for serving ads. The other thing here is that most artists wouldn't have a single view if it wasn't for one or the other distributor. Basically, the barrier is so low to entry and the risk is dispersed across a million other artists so you all get a very diluted value per view. But at least you get value per view. Otherwise, it would have been an all or nothing business, like it used to be. It's the same effect the app stores had for software devs.
In essence, you get low fees because those funds pay for the distribution and risk that is dispersed. The general pay scale is a hockey stick with the last couple % making the majority of the money.
Since you even got the opportunity to get in front of an audience, use it wisely as you need to pump those numbers up. It's a numbers game and your numbers are too low. You need double-digit millions to make a good living off of it. And that's just what it takes. It's not easy, not everyone will make it above the fold, for whatever reason life, luck, marketing...
Many record companies, in their own financial interest, reduced the royalty cost for streams with Spotify in exchange for revenue shares.
I would feel pretty ripped off if I made a big, delicious cake, and as a reward I get one tiny slice while I had to watch everyone else eat the rest. Maybe not if making cakes is just a small hobby for me, but definitely so if it's my career.
I'm not arguing the case here that the whole scene is set up fair and square. Probably the complete opposite. However, expecting 1M views of random music play to be worth more than some $5k is a long stretch.
On their own, sure 1M views would account for much more if it was a very focused platform, however, it caters to a huge palette of artists. The dispersion of risk/quality and focus targets makes it not really the prime money machines.
If you want to make money in this industry - keep to the old-fashioned methods. Concerts and live performances are what rake in the big money - CDs, Views or whatever useless metric people try to convert to $$ numbers only works in obscene numbers. All else is just trying to get there - and that is usually the dirty and hard part of the music industry.
> I would feel pretty ripped off if I made a big, delicious cake, and as a reward I get one tiny slice while I had to watch everyone else eat the rest. Maybe not if making cakes is just a small hobby for me, but definitely so if it's my career.
this analogy doesn't even begin to approximate the real dynamics.
Interestingly, earlier this year several record companies either mostly or fully divested in Spotify, with some companies like Warner getting over half a billion dollars. Reasons are unclear even though they have made vague public statements.
Arguably $5000 isn't much for three years and 1 million plays, but I'm also not sure what they where expecting. I believe the issue is that Spotify charges customers per month, while artists are paid by play, so the more Spotifys customers use the service, the less they can afford to pay for each play.
Assuming that a consumer spent the money from a Spotify subscription on CDs instead that would, in Denmark, be around 24 CDs in a three year period. When you look at it that way, I can't really see how artists expect to make any real profit of Spotify, the money simply isn't there.
Streaming services allow consumers to listen to vastly more music that they ever did before, and from a larger number of artists, but at a lower price, so I can't see why people are surprised that Spotify isn't making them money.
What would be interesting to see is: How many time would a fan need to play songs from one artist to make the artist the same amount of money as the sale of a CD. I believe that an artist only makes around $0.5 from the sale of a CD, the rest goes to the label, promotion and so on. So I would assume that as long as each user plays a song around 100 times, the net result would be the same.
I’d rather my monthly fee go to only the artists I play. Say, for some percentage of my fee minus operating costs. That would reward artists according to their draw.
This is the crux of the fairness debate here. The numbers don't seem absurdly bad, but if I was buying CD's - none of my dollars would go towards Rihanna and a good portion would go to obscure bands. Currently, this is the opposite of how my subscription dollars are divided.
No, my $10 is divided across all plays. So big name artists with lots of streams get my money. Particularly badly in the months when I only listen to a few songs because I listen to podcasts.
I mean, it mostly works like that. You listen to someones music, you generate plays for them, `your` share gets paid to those artists you listened to. Sure it's not all of your monthly subscription, but you probably also fund other people who use free version. Like I understand the idea where one would have 5 plays (5 artists) entire month and those artists would receive almost 2$ each from him (if no fee is deducted for spotify infrastructure).
People still seem to be stuck quantifying the value of music (sales, streams, etc) against a time when there was less saturation and the actual cost of producing, marketing and distributing music was much higher.
When was that? Since at least the 1960s, music has been a winner-take-all hit driven industry. You’re either The Rolling Stones, Motley Crue, Madonna, or at best a one-hit-wonder. The vast majority of bands are (and always have been) local groups who play their town bars, occasionally go on tour, and have day jobs.
I’m not saying this is good, but it’s the way things have always been. There was never some “good, honest living” to be made for anyone who isn’t a household name.
This is bullshit. It used to be possible to make a living off of selling recorded music, whether records or cds, and people cared about, and bought albums, in large numbers. Now the only way to make money if you’re not nationally famous is gigging. Gigging used to be something you did to get people to buy your singles and albums. That was where the money was and that was how mid-list artists made a living. Now that’s gone. The midlist are people trying to make it, on the way out or being supported by daddy’s money.
Things are different now. Records and cds lead to more people being able to make a living making music.
> This is bullshit. It used to be possible to make a living off of selling recorded music, whether records or cds, and people cared about, and bought albums, in large numbers.
It still is. But let's break down the "bullshit." It used to be possible to make a living driving a horse drawn buggy. Then things changed. Fewer people wanted or needed this, the value went down accordingly.
A different mechanism but the same principle. The cost to produce and distribute recorded music is plummeted. There is a saturated markets for artists and recorded music. Is it a surprise that the value of a play has dropped accordingly?
Actually I’d like to see more live performances. If there’s so much talent in search of work then that should be possible. But people also only want to hear the stuff off the radio exactly as they heard it.
Well, one way to conceptualize human needs is maslow's hierarchy. the final, LOWEST priority need is self-fulfillment. so there are many more pressing problems before that to solve.
but:
It says nowhere that self-fulfillment must be in your job.
Who says that being a successful musician is "the" useful trait to develop ? reading about successful musicians, and knowing one, they don't seem particularly psychologically healthy. Same goes for probably many other talents.
And who says the "self" is the key thing to develop anyway ? if you ask spiritual people, peak human development looks quite different.
It's odd how this argument is applied to artists, but never to financiers, investors, and CEOs.
What if being insanely rich isn't "the" trait to develop? Reading about successful CEOs, and knowing one very distantly, they don't seem particularly healthy.
And who says creative expression is a thing to develop anyway? Why can't we just keep making already rich people even richer without complaining about it?
While in my personal version of a just world all artists would make a livable salary and I think this is what you mean, however if what I’m hearing from music industry friends is accurate, there are far more artists now making a modest but still livable income off music than there was in the late and very early 20th century.
Apparently almost no music artists could earn a living previously — the only musician who could were union symphony employees, studio musicians, and the very very few who cracked into the charts.
I suspect what we’re seeing in articles such as this are people who believe they should be traveling the world partying in castles with supermodels, and sadly I think for a small to mid popular group, this is just as unrealistic now as it has ever been.
My dad talks about him and his friend’s bands in their teens, 20s, and 30s and how playing their music actually cost them money when equipment, practice space, and traveling expenses were considered. Back then most would have killed to have a small middle class income to play music. Now it seems there are many tiny bands who between streaming, the audience they can generate online, and aggressive touring, they can make a modest living which unfortunately and fortunately, in our current iteration of capitalism is a win of some kind.
Do they control for economy? Is the definition of “fill time musician” the same?
I imagine full time musicians would be impacted by a faltering economy at least somewhat more than most careers and probably one of the last careers to bounce back.
Not doubting you as everything I mentioned was based on second hand information with no science other than “as a person in the industry, X seems to be true.”
As I said, I would love to see a world where even mediocre artists can make a livable wage.
In case anyone is interested in alternatives, I think we live in an amazing time for non-streaming music consumption.
I run the VLC app on my mobile devices, which allows me to spawn a web server served off the mobile device that I can connect to in the browser on my laptop or desktop PCs.
I can upload raw music files (mp3, ogg, etc etc) onto the mobile devices seamlessly, and it categorizes them by album.
I only ever buy full album or track digital downloads from bandcamp or Amazon music. Zero DRM, just straight archive files of mp3s usually (bandcamp lets you select which audio file type for a long list of options).
For unknown music, you usually pay what you want or pay a small price like $1 on bandcamp, which is almost always worth it even when just testing out some music I’m not sure if I’ll return to yet or not, especially compared with the negative externalities of subscriptions with Spotify.
I consume probably 5 different $10 albums per year and maybe another few hundred or so LPs or individual tracks at about $1 each. My music budget is probably about $250 / year, which is roughly twice the price with Spotify premium.
I could go on another rant about how Spotify’s content discovery / collaborative filtering offerings are extraordinarily poor and provide genuinely negative value for me when I previously used the product, but regardless I feel very happy to avoid Spotify’s negative externalities. That is well worth an extra $10/month of Spotify-avoidance-fee to do it with non-streaming options.
I've written over 20 blog articles about software development over the past couple of years; each article is typically thousands of words.
My blog has had hundreds of thousands of views in total (targeted at developers; a valuable demographic) and I've made $0 from it.
I find that writing blog articles is easy and I like doing it. If you want to make money from anything, unfortunately, you've got to compete with people like me who are willing to do the work for free.
Publishing blog articles and publishing music or videos are all similar in terms of monetization. Some people will produce music for free and you have to compete with them.
It's not unusual to get hundreds of thousands or even millions of views and get very little out of it financially.
> Some people will produce music for free and you have to compete with them.
Professional quality is nearly always significantly better than amateur quality. Ya get what ya pay for.
This whole post is about professionals making a living from their craft. And we're all ok with the distributor, the middle man, Spotify, raking in more money than the content creators. That's my big beef: Spotify is getting their slice from the artist's pockets when they're already not getting enough for their work.
I assume "Specific time period accounted: 10/15/2013 – 2/15/2013" is a typo, right? The spreadsheet isn't sorted but it looks like the most recent date is 2/15/2016, so that's $5000 for 28 months, or about $178 per month.
That's not much. That could cover gas money for one or two band members. An average software engineer earns 2-3x that much every day.
I think this question is part of the problem. Every stream is actually negative revenue for Spotify. It costs them money to have a song in catalog that is amortized per stream, and it costs them money to stream that song each time. And some listeners are paying a subscription, which means fixed revenue but variable streams and therefore costs. While others are ad-based model, so hopefully variable revenue but guaranteed positive per stream...
People that would have bought an album probably would have listened to each track ~5 times, say an album has 10 tracks, this is equivalent to 20k album sales. Apparently typical royalty on an album is ~$0.50 so I'm going to say $10k.
...checks...
$5k. Ok fairly low but I think that was a pretty good guess!
1250$ per month, 41$ per day. 20 per day per capita (it's a band so at least 2 persons ?). I know some hobos that make more by asking for pennies(granted you have to do that all day every day). Jokes aside, maybe they should just play outside and in bars they'll have more fun and probably as much money.
So about half a cent per stream in payout? I have no experience in the music industry but as a consumer somewhere around a cent per song is what I would imagine would be reasonable to charge.
So this is in the ballpark of my expectations - as a consumer.
But YouTube, at least the popular video platform, is not meant for publishing songs and is doesn't claim that either.
Spotify's sole business is dependent on music and claims to be benefit artists.
{spotify} "Last year, the service paid out $0.0038 per play. Not much has changed this year. With a reported 51.51% market share in the US, Spotify pays $0.00397 per stream."
They do sum it up. $5k for 1M streams. Which is reasonable or not compared to CDs depending on your assumptions. Let’s say a CD has ten tracks and the average buyer plays a CD five times. That’s fifty streams per buyer. One million streams yields twenty thousand CD buyers under this assumption. CDs are $10 (or were the last time I bought them ages ago). That means $200k gross, but the band would probably not see more than 20% of that at the most optimistic. Still, $5k is a lot less than $40k.
But if you double the number of plays a typical CD buyer would listen, and halve the band’s cut, you’re suddenly in the same neighborhood. You also have to factor in that many Spotify streams are not full track listens.
Thanks. So if the artist is both the performer and the writer, they get about ten percent. So that’s one power of two accounted for. I think my assumption about the typical number of CD listens is also quite conservative.
The biggest radio channels in the US have a few million listeners each. Let's say your record does ok, and gets airtime on a few second-tier radio stations. For easy math, let's do 20 plays * 50,000 listeners per play. This also gives you a total of one million listens.
I would be _extremely_ surprised if they would net much more than $5000 from these radio listens.