Spotify to launch in the US this week!!!

[DustyV]

Hmm, good question. First let's compare apples to apples. If we're using $0.00029 from that graphic as the artist revenue (which is calculated as 15% of the label revenue), then we should also use the 15%-of-label-revenue figure for CDs, which, according to the graphic would be $0.30 per CD. That corresponds to $3000 in artist revenue for 10,000 CDs sold, not $15,000.

Second thing is that people don't listen to a CD for a month and then stop. They can listen to it for the rest of their lives at no additional charge. So let's see how many streams it takes to match that $3000. At $0.00029, that's about a million streams, and with 10,000 listeners, if we assume 10 tracks per CD, that's equivalent to listening to an album about 100 times over your lifetime.

That actually sounds pretty reasonable. In other words, if someone listens to an album on Spotify 100 times, the artist will get the same amount of money he would have gotten if they bought the CD and listened to it 100 times over their lifetime. There are probably a lot of CDs that people never listen to 100 times, so the artist "loses" money with Spotify in that case, but on the other hand, if some obsessed fan listens to an album 1000 times over their life, with a CD, the artist will never get more than that original $0.30, but with Spotify he'll get $3.00. Additionally, Spotify allows artists to get money from people who listen to a song or album occasionally but, in the absence of Spotify, wouldn't have cared enough to buy the CD. So surely 10,000 CD-listeners would translate into something more than 10,000 Spotify-listeners (though yeah, not anywhere near a million).

So the main difference between Spotify and CDs is that for CDs, artist/label revenue is more front-loaded, whereas with Spotify, revenue is much more spread-out over time. Admittedly, that makes it more difficult for an individual artist to pay this month's bills, but surely this regular, predictable income stream (contrasted with the completely unpredictable nature of hit-making) is one thing that makes Spotify very attractive to the corporations that run record labels.

Neil

You make a good point Neil. As an example, I'm an old casual Van Halen fan, but I don't own any of their CDs, nor do I LOVE them enough to buy any of their CDs, BUT since they are at my fingertips with a push of a button, I'll probably listen to many of their Cds several times with Spotify. So while they aren't getting much money from me, they are getting more from me than they would be getting otherwise. I'm also sure there are MANY other people than feel the same way I do, so this compounded....

If you wouldn't buy the CD anyway, it's a win situation for the labels, as they make at least a little bit off of you X the amount of people that feel the same way I do. ....I can bet there's a ton of people who feel this way. I also think Spotify will diminish Illegal downloading. It won't stop it completely, but I bet it will reduce it. Again, a win situation for the labels.

 

[dcowboys311]

It has nothing to do with shortsightedness. I am trying to explain things from the music business/band pow. It's all about chopping more and more pieces off the pie, making sure in the end that bands go down.
L

Yeah I hear you. You obviously have a lot invested in situations like these given that you're both in a band (who's music is quite good I might add) and involved in the label side of things. I just think that a lot of people (not you specifically) either don't realize or refuse to acknowledge the fact that the old way of the music industry is done for.

Bands aren't gonna be making the same money from just recorded music and will have to find different revenue sources if they want the music to be their sole job. It's just like with any other business...new ideas or technologies come along, old jobs become unnecessary or consolidated or replaced and something brand new comes up to fill the gap.