Spotify Artist ROI - how Spotify contributes to the music business

[AeonicSlumber]

The issue is that artists who trusted labels to take care of their recordings and their respective value have watched labels squander chances to get control of this piracy issue over the years. They also allowed a company like Apple to come in and hijack an entire industry by simply creating a music player and setting up a store. iTunes takes 30% of ALL SALES of which it is currently the largest digital reseller in the world. It would be like Sony taking 30% of all music sales simply because they had the first CD player on the market back in the day. (note: not sure who made and sold the first player). Bandcamp is trying to be a competitor to itunes by taking less of a cut AND offering lossless audio files. Also, anyone can sign up to Bandcamp.

iTunes and other digital resellers all require a middle-man to service your audio to them, these middle-men take another 10-15% off the top of your digital sales. so basically what is left for artists to split is roughly 55-60% and this % doesn't include label's cut, etc.

To be fair, when you factor pressing and distribution costs, the profit margin for Itunes downloads is still higher than physical CDs.

 

[edgeofthorns]

Not really. I'd say it's a good thing as it appears to be the natural order of things that composers and/or musicians should not get paid for their work. I will probably still make music. I simply won't publish it anywhere.

Urban, on a side note...anytime you put out music, I buy it (physical CDs). I'm the type that I insist on buying music from my favorite artists. It's as simple as that.

~Brian~

 

[General Zod]

The issue is that artists who trusted labels to take care of their recordings and their respective value have watched labels squander chances to get control of this piracy issue over the years.

In all fairness, what in the history of the label / artist relationship would suggest big labels could be trusted?

They also allowed a company like Apple to come in and hijack an entire industry by simply creating a music player and setting up a store. iTunes takes 30% of ALL SALES of which it is currently the largest digital reseller in the world. It would be like Sony taking 30% of all music sales simply because they had the first CD player on the market back in the day. (note: not sure who made and sold the first player).

Your point serves to establish the earth-shaking incompetence with which large record companies are run. Technology evolves rapidly, multinational corporations pivot slowly. It's not at all surprising the record industry got out maneuvered by a technology company.

Bandcamp is trying to be a competitor to itunes by taking less of a cut AND offering lossless audio files. Also, anyone can sign up to Bandcamp.

I love Bandcamp and hope their model grows. As I said, I hardly think the dust has settled. The solution is still evolving and the industry is going through the pains on reinventing itself. But when all is said and done, it seems the only viable solution is one that allows the distributor to control piracy, while fairly compensating the artists.

iTunes and other digital resellers all require a middle-man to service your audio to them, these middle-men take another 10-15% off the top of your digital sales. so basically what is left for artists to split is roughly 55-60% and this % doesn't include label's cut, etc.

Most business models seek to cut out the middle man, and I suspect this one eventually will too.

 

[High Speed Kurt]

I have been a premium member for many months now. I hate to say this, but my cd buying has SEVERELY slowed because of spotify. I havent even gotten the new Fates Warning yet. I listen to it all day at work. 40 hours per week.

Way I see it, if I am listening to something I already own, the artist is getting a little more, so it's win win. But those bands I havent purchased the cd yet, they are the ones kind of losing out.

 

[AeonicSlumber]

In all fairness, what in the history of the label / artist relationship would suggest big labels could be trusted?

He didn't use the word "big" - so it's a complete non issue, unless you would like to imply all labels "can't be trusted".

Most business models seek to cut out the middle man, and I suspect this one eventually will too.

Will never happen.

 

[TENTH DREAMER DECEIVER]

I have been a premium member for many months now. I hate to say this, but my cd buying has SEVERELY slowed because of spotify. I havent even gotten the new Fates Warning yet. I listen to it all day at work. 40 hours per week.

You must have beaten Jim Bartek's Nostradamus record by now.

 

[AeonicSlumber]

If you're referring to the horrible Judas Priest album, I wouldn't wish that kind of torture on war criminals.

 

[TENTH DREAMER DECEIVER]

If you're referring to the horrible Judas Priest album, I wouldn't wish that kind of torture on war criminals.

I'm referring to the most enjoyable Priest album. Think I'll put it on today and relive 2008. Met the band in Vancouver (second time for KK & Ian), then saw them at Monsters of Rock in Calgary (Ozzy, Voivod, etc) then in Las Vegas.

Now back to your regular Screwify discussion

 

[AeonicSlumber]

I'm glad you think Harvey Fierstein Presents: Judas Priest: The Cheesy, Totally Unheavy Broadway Musical is their most enjoyable album.

Also what exactly do you have against Spotify, in all seriousness?

 

[jaimek]

In all honesty, why is it annoying? Tell me how it's more annoying than Pandora, iTunes radio, etc... ?

I don't use any of those either! IIRC, I found the actual Spotify *program* to be a pain in the ass, although this was quite a while ago, so they may have streamlined things since then.

But overall, I'm not the kind of user those companies are gunning for, anyway. I'm a picky bitch and I don't like having to pay for unlimited skips, and I don't use a smartphone, so streaming is useless to me when I can put my own collection on random.

 

[General Zod]

He didn't use the word "big" - so it's a complete non issue, unless you would like to imply all labels "can't be trusted".

That's why I was careful to use the word "big", to make sure we're talking about the same thing.

Will never happen.

Perhaps it won't, but I wouldn't use the word "never". There are any one of a number of things in the business world that people thought would "never" happen. Economics evolve, it's just the nature of things.

 

[AeonicSlumber]

The reason why it will never happen is because there will always be a middle man. As long as someone wants to sell something, there will be someone there to help facilitate that sale in exchange for a %. If you have music to sell, there will always be someone to help facilitate that sale. Whether it's CDbaby or Bandcamp, which anyone can sign up for - or Sony/Red to get physical CDs into stores. There's ALWAYS going to be a middle man.

The only true way for a band to cut out the middle man would be for the band to exclusively sell their music on tour.

 

[AngraRULES]

Also what exactly do you have against Spotify, in all seriousness?

Maybe the fact that Spotify is less than 25 years old? j/k j/k

 

[TribunalRecords]

That's why I was careful to use the word "big", to make sure we're talking about the same thing.

Perhaps it won't, but I wouldn't use the word "never". There are any one of a number of things in the business world that people thought would "never" happen. Economics evolve, it's just the nature of things.

I guess I should have used better wording. A recording contract is an investment, and what I was saying is that the artist, by entering into said contract, expects the label to protect the value of their work and in turn the record label should want to protect the value of their investment.

The middle man I am talking about cannot be removed until iTunes decides to allow everyone to upload their own audio data fore resale. Since they started that way I don't see them going back now, so that means to have your music sold in the world's largest music reselling arena you have to pay someone to get it there, as well as pay iTunes for the privilege of doing so.

 

[Mr. Zane of HW]

Not really. I'd say it's a good thing as it appears to be the natural order of things that composers and/or musicians should not get paid for their work. I will probably still make music. I simply won't publish it anywhere.

I used Cdbaby and Bandcamp.com to release my Bishop Lake EP. Cdbaby has a decent payout, but Bandcamp was by far the best. Not that I have sold that many downloads, but it's nice to make a few bucks, and be able to trace it. I am self publishing my stuff, makes more sense.

 

[TENTH DREAMER DECEIVER]

I'm glad you think Harvey Fierstein Presents: Judas Priest: The Cheesy, Totally Unheavy Broadway Musical is their most enjoyable album.

Also what exactly do you have against Spotify, in all seriousness?

It takes the joy out of personally discovering music by making it too readily available. There's no effort involved. 1 mouse click and it rules. Another click and it sucks. But that's the modern age...

 

[General Zod]

The reason why it will never happen is because there will always be a middle man. As long as someone wants to sell something, there will be someone there to help facilitate that sale in exchange for a %.

The middle man I am talking about cannot be removed until iTunes decides to allow everyone to upload their own audio data fore resale. Since they started that way I don't see them going back now, so that means to have your music sold in the world's largest music reselling arena you have to pay someone to get it there, as well as pay iTunes for the privilege of doing so.

This is what I was referring to as the "middleman".

I don't have any sort of any inside knowledge as to the inner workings of the record industry. However, it seems you have the artist, the label, and the distributor (iTunes, Spotify, BandCamp). At some point, as these models evolve and mature, it seems reasonable that both the distributor and the artist will recognize they can each take a bigger slice of the pie if they do away with that middleman.

 

[Urban breed]

it seems reasonable that both the distributor and the artist will recognize they can each take a bigger slice of the pie if they do away with that middleman.

Distributors, generally speaking, prefer bulk to single (small) actors. Of course, if the work involved can be automated on their side (and a lot of it both can and should be) then that might change.

 

[Random Axe]

I have absolutely no knowledge of spotify and likely have no use for it. Anything I would potentially purchase first gets a preview or two on youtube. I know artists might piss and moan their product is on there, but it is a terrific outlet for exposure, and in my case leads directly to wallet if I like it.

There are only three ways for me to own music. I purchase CD from band/vendor, download from bandcamp or download through Amazon.

As long as youtube remains free(aside from the annoying commercials) I will never use spotify.

 

[nailz]

Look at this: "an average “per stream” payout to rights holders of between $0.006 and $0.0084"
and then imagine what happens if you also have a publisher.
Then on top of that most might even have to split the remaining small portion with some other member(s) of the band (that presumably contributed to the writing or even worse... "it's simply band policy").

So basically, if people don't listen to your music, you're not getting paid. I don't see how this is much different than how it used to work.

This looks like a pretty good payout for bands who would otherwise probably wouldn't have made these sales.