Napalm Records Removes Content from Spotify

[nomisofsiman]

Except that nobody is pushing Youtube as the alternative to buying music, or a "this is all you will ever need" vehicle for music consumption.

True, but there are people that'll just keep playing music via Youtube. I merely just put Youtube as an example, but there are others as well that upload for free.

 

[skyrefuge]

but for something with as much hype behind it coming from Europe you would figure they would be making money. There is money being made that is for sure, but who it is seems to be the mystery.

lol...there's no mystery. It's YOU! YOU'RE making the money! (where "you" refers to all labels/bands/rights-holders). Spotify has paid out over $100 million to right-holders so far. That's real money! Artists with a tiny number of fans have gotten only a tiny fraction of the $100 mil of course, but "popular artists make more" is not news and has nothing to do with Spotify.

And that's much of the reason for the hype behind Spotify, because many rights-holders (CM, MB, and Napalm not included!) saw it as a way for *themselves* to get another income stream. "Yay, a way to monetize illegal downloaders and maybe get them to give up their downloading ways!" No one would give a shit if the story was about Spotify itself making all the money. A couple Swedish dudes getting rich off the backs of musicians is not really something that excites the blogosphere.

Is there any way to find out how much revenue was generated by 1 (ppusa type) metal band.

Read all my posts in this thread and this thread. I lay out all the stats and math.

In short, the rights-holder (not the artist) gets something like ~0.16-0.35 cents per stream (requiring 300-600 streams to make $1). The amount of that that the artist receives depends on their deal with their label, but it's 15% is a figure I've seen quoted. So to answer your question you need to know how many streams a ppusa-type metal band gets over whatever period you're looking at.

If it's only 600 streams, then the artist only make 15 cents, but then that also means hardly anyone is using Spotify so it's not a threat to their CD income stream. (though note that using the same assumptions, the artist makes only 30 cents per CD sale).

Mode Records is a non-metal label that (I think) has also pulled out. Selling 6000 copies of a release is considered a hit for them. In June, they had 11,335 streams via Spotify, for a total income of $36.98 (which averages to 0.33 cents per stream).

One last important factoid to remember: if everyone suddenly stopped buying CDs today and signed up for Spotify subscriptions instead, the industry would see near-record revenues. So if the current revenues seem tiny, it's simply because not many people are using Spotify, and thus it's not a threat; and then it's also not a threat if *everyone* started using (and paying for) Spotify, because then the industry would make more money than they're making now.

Neil

 

[nomisofsiman]

In short, the rights-holder (not the artist) gets something like ~0.16-0.35 cents per stream (requiring 300-600 streams to make $1). The amount of that that the artist receives depends on their deal with their label, but it's 15% is a figure I've seen quoted. So to answer your question you need to know how many streams a ppusa-type metal band gets over whatever period you're looking at.

If it's only 600 streams, then the artist only make 15 cents, but then that also means hardly anyone is using Spotify so it's not a threat to their CD income stream. (though note that using the same assumptions, the artist makes only 30 cents per CD sale).

Mode Records is a non-metal label that (I think) has also pulled out. Selling 6000 copies of a release is considered a hit for them. In June, they had 11,335 streams via Spotify, for a total income of $36.98 (which averages to 0.33 cents per stream).

One last important factoid to remember: if everyone suddenly stopped buying CDs today and signed up for Spotify subscriptions instead, the industry would see near-record revenues. So if the current revenues seem tiny, it's simply because not many people are using Spotify, and thus it's not a threat; and then it's also not a threat if *everyone* started using (and paying for) Spotify, because then the industry would make more money than they're making now.

Neil

I don't say this often but well said, sir.

 

[nailz]

If Spotify offered some sort of embedded mechanism for simply purchasing a high-quality mp3 (or whatever format) for $1/song, I'd already have given them at least one year's subscription fees for songs I've heard elsewhere (like on Sirius/XM) and played there.

Just sayin'......

I think I mentioned that in either this thread or the other one, that I would not be shocked if either Amazon or Apple went after a purchase deal for spotify or at least a hefty exclusive sales deal that would make the Spotify owners rich, in order to "right click, buy from" option, in fact, I expect it run on sentence.

 

[halcyonwayband@aol.com]

If it's only 600 streams, then the artist only make 15 cents, but then that also means hardly anyone is using Spotify so it's not a threat to their CD income stream. (though note that using the same assumptions, the artist makes only 30 cents per CD sale).

For physical product, that's not a good number, unless you have an insanely crappy record deal. An average licensing deal is 3-5 times that amount.

I think Spotify is a good tool but I also think that they need to re-examine the payouts to labels/artists. There are a lot of middlemen in this business that all get a piece of the action, and so with these really low payouts it's basically nothing more than free exposure for a band or label. That's not a BAD thing in ....but since there's no real money being made on those downloads, if it even causes ONE CD sale to not happen, it's having a negative impact on the label, distributor, and the artist. So I can understand why these labels are pulling out or limiting their offerings on there. There will be an equilibrium reached at some point though - the labels are smart enough to know that this is a good way to get exposure...they just don't want to give away their product for free.

For example.....say there's 10,000 streams of a song at .002 per stream. That's $20 gross to the label/distributor.

Now let's say that that causes 10 people that may have otherwise purchased the CD to not buy it and to stream it instead. A label gets somewhere around $5 selling physical product to their distributor. That's $50 in revenue that they lost, in exchange for income of $20 through spotify (less whatever the distributor's take is). So if you scale these numbers up, there's a big opportunity cost for the label.

You can of course say that there are 10,000 people that may have never heard the band, but did as a result of the streaming, but you can't really monetize that by anything except sales revenue. And that's what the labels are all about. So making that argument doesn't really hold water in my opinion. MAYBE some of them buy the CD, but how do you tell? And if you can't pin hard data to it, how can you base a business model off that assumption?

A single CD sale has a magnified impact on a smaller label or band - whereas a major label/band doesn't have quite the same worry about it - so for a bigger entity Spotify would represent an additional revenue stream. Some cannibalization would undoubtedly occur, but economies of scale definitely are meaningful here.

 

[halcyonwayband@aol.com]

I think I mentioned that in either this thread or the other one, that I would not be shocked if either Amazon or Apple went after a purchase deal for spotify or at least a hefty exclusive sales deal that would make the Spotify owners rich, in order to "right click, buy from" option, in fact, I expect it run on sentence.

That would make a lot of sense I think......

 

[nailz]

Are labels even necessary anymore? Honestly? Think about how much more money you could make by distributing things digitally yourself. (honest question. I'm not in a band, have never been, and have no idea what the advantage of a label over doing it yourself, other than possibly them investing into your band and taking most of your cash.)

 

[dcowboys311]

Are labels even necessary anymore? Honestly? Think about how much more money you could make by distributing things digitally yourself. (honest question. I'm not in a band, have never been, and have no idea what the advantage of a label over doing it yourself, other than possibly them investing into your band and taking most of your cash.)

Time, upfront costs, merch hookups, industry connections, touring, etc etc etc

 

[halcyonwayband@aol.com]

Time, upfront costs, merch hookups, industry connections, touring, etc etc etc

haha, beat me to it! =)

 

[Prog_Please]

Mode Records is a non-metal label that (I think) has also pulled out. Selling 6000 copies of a release is considered a hit for them. In June, they had 11,335 streams via Spotify, for a total income of $36.98 (which averages to 0.33 cents per stream).

Thanks, this was all I was asking for lol.

I can see why labels and musicians are pulling out.

 

[Justin G]

Are labels even necessary anymore? Honestly? Think about how much more money you could make by distributing things digitally yourself. (honest question. I'm not in a band, have never been, and have no idea what the advantage of a label over doing it yourself, other than possibly them investing into your band and taking most of your cash.)

I'll let the label guys here argue their side, which I'm guessing is a lot more than to "take most of bands' cash." I will say that as a reviewer I automatically pay more attention and give more credibility to bands that are signed to a label, regardless of that label's size. It tells me that at least some level of quality control has gone into the product (as in Frontiers sending back one of their established band's new material because it's not strong enough), and that the band has impressed professionals enough to take a chance on them.

The HRH site gets dozens of requests a week from unsigned bands looking for reviews. I've found a few gems that way, but in the end even with close to a dozen reviewers we're just not going to be able to get to everything. Releases from labels we know and trust always get moved to the top of the queue.

 

[nailz]

^--that's cool. I honestly did not know they did things like that.

 

[skyrefuge]

Thanks, this was all I was asking for lol.

I can see why labels and musicians are pulling out.

Well you should have read the rest then, because it's not quite that simple. Until you can explain why the vast majority of labels and musicians have been on Spotify for years and are remaining there, the simple argument that "the payouts are too low" fails to explain the state of affairs.

If someone buys Halcyon Way's CD, the label gets $5. If that HW fan instead uses Spotify, streams the album 30 times in the first year, 10 times in each of the next five years, and twice a year for the next 25 years after that, the label gets...$5 (assuming a 12-track album and that 0.33-cent/stream payout). So Spotify payouts are not "nothing", they just take a long time to be realized. And the $5 from that latter case will still be trickling in and supporting HW in their dotage, while the $5 from the former case would have been blown on booze and women decades earlier!

Sure, 126 listens is probably somewhat more than most albums actually get listened to over a lifetime, but I don't think it's a completely ridiculous example. Imagine the situation in reverse: say pay-per-play streaming was the only pricing model the record industry had ever known, and then in 2008, someone finally invented a storage medium called a "CD" that would allow a consumer to pay once for a piece of recorded music and then listen to it as many times as they want after that "for free". Like Olive Garden changing from pay-per-dish to a neverending pasta bowl. What would they charge? They wouldn't want to risk this new medium cannibalizing their streaming income, so they would need to price it high enough to prevent heavy listeners from "ripping them off" by listening to the CD too many times "for free". So pricing it equivalent to anywhere from 50-150 streams would sound like a reasonable ballpark to me.

Well, actually knowing the record industry, they would first fight this "CD" concept tooth-and-nail, and then when finally succumbing 10 years later, they would price it equivalent to 1000 streams, saying "sure, most people won't listen to this 'CD' thing 1000 times throughout their life, but SOME will, and we don't want those fuckers ripping us off!!"

Rhapsody apparently pays about 3x more than Spotify per stream, which only requires 40-some listens over a lifetime to be equivalent to CD, which sounds pretty reasonable. It seems like eventually Spotify's payouts will increase to near Rhapsody's level, when, like Rhapsody, the majority of its streams start coming from paying customers rather than freeloaders.

If you're someone who thinks the Spotify payments are "too low", what do you think the "correct" payout ratio should be for streaming-vs.-buying? How many times do you expect someone to listen to your album? Remember that if they listen more times than you expect them to (because they really love your music), they (well, Spotify) might actually end up paying more than if they bought the CD.

The pay-per-stream model just seems more satisfying to me anyhow, where the artists who make the most money are the ones whose music actually gets listened to over and over again, rather than the CD-situation, where an artist who releases a highly-hyped album that actually sucks and no one listens to after buying, can still walk away with a fat load of cash.

Neil

 

[Prog_Please]

Its pretty simple. You either accept or decline. I don't think the payout is enough, so I would decline. I don't need fancy formulas and loads of facts to make my decision. All I need is an opinion.

Also, the majority of my albums get about 10 plays the first year and about 1 every year since. I haven't plugged the number of plays into your badass formula, but I can tell you its nowhere near the ammount you assume. The only albums I listen to at your rates are the blackwater parks and the tall poppy syndromes of the year (they're probably triple your rates). Who knows, maybe my listening trends are different.

Oh, and in response to your question on how much I would charge: I would use bandcamp and let people pay however much they want.

 

[dcowboys311]

I don't need fancy formulas and loads of facts to make my decision. All I need is an opinion.

Well, I hope you won't be making any important business decisions any time soon!

Also, the majority of my albums get about 10 plays the first year and about 1 every year since. I haven't plugged the number of plays into your badass formula, but I can tell you its nowhere near the ammount you assume. The only albums I listen to at your rates are the blackwater parks and the tall poppy syndromes of the year (they're probably triple your rates). Who knows, maybe my listening trends are different.

This sounds about right for my listening, too. On the flip side, there are loads of people who obsess over one album/song and listen to it hundreds of times! Personally, I can't see how anyone can do that, but it happens. And it evens out my low levels of listening.

Oh, and in response to your question on how much I would charge: I would use bandcamp and let people pay however much they want.

You're probably familiar with Radiohead and how they did just that with In Rainbows. You might even be familiar with how only about 40% of people paid for it when it was going through the pay-what-you-want distribution. And this is Radiohead! One of the biggest bands in the WORLD. So for a Napalm band or a CM band or whatever....how much are they going to see from Bandcamp?

 

[J-Man]

I noticed that neither Lance from Nightmare Records or Ken from Sensory have chimed in on this?

 

[Rycher]

I found this graphic very interesting. It's from 2010, but I don't think much has changed in a year.

http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/comment-page-3/

 

[AeonicSlumber]

This chart is famous and is also completely wrong. For one thing, it doesn't cost $1 to press a CD. It costs closer to $6, and that number increases depending on the quality of the product. You want a superjewel case? Cost goes up. In depth booklet? Cost goes up. Sell a "normal" CD at 9.99 and that's almost a $4.00 profit per CD sold. Not that great, and that's not counting physical shipping costs.

On the digital end, iTunes takes 30% of the digital sale and your digital distributor takes a cut too. So you wind up making around 5/6$ per digital album sold.

Thus, the artist makes more digitally than through physical CDs by far. The problem is that the music industry buyership majority still prefers physical CDs, so you can never make as much money selling downloads as you can CDs simply on the notion that less people want downloads. However, on a numbers level, digital yields more bang for your buck.

 

[nailz]

On the digital end, iTunes takes 30% of the digital sale and your digital distributor takes a cut too. So you wind up making around 5/6$ per digital album sold.

Why in the world would a band need a digital distributer? Can't they simply say "hey, here, sell this!" ? - Again, ignorance of the business... not being a tool.