My only issue with Spotify is that it tricks listeners into thinking they're supporting artists when they so totally aren't. I equate Spotify to piracy. Yeah I give them $10 a month but so little reaches artists I might as well have stolen the music.
And I'm fine with that. If people want to support an artist then they should buy their album, go to liveshows, whatever. As long as we don't incorrectly assume that Spotify is supporting the artists we enjoy then everything is fine.
The artist's contract with labels is not the consumers responsibility.
If you compare the price of spotify with average consumer behavior, you see that money spent on spotify is in every sense more than reasonable. Many album deals in the past have had pennies on the album reach the artist, so I fail to understand your argument that spotify is cheating artist. But that logic Walmart are cheating artist who doesn't have a fair record deal.
If artist don't receive money from consumer spending it is the label that is cheating the artist, not the distributor.
I'm not talking about that. Labels don't make shit from Spotify either. More specifically, rights holders don't make shit from Spotify. I don't care if that holder is an individual, a band, or a big ass record label.
So? Spotify pays $5,210 per million streams [1]. It would take an individual artist about 8 million streams to make a mere $40,000. A band of 5 artists would require 40 million streams for each person in the band to make a $40,000 salary.
That's jack shit. It's not enough to be a meaningful revenue stream for any artist at any level. It's not enough to help, support, or incubate indies. It's not enough be a drop in the bucket for a mega star.
Those numbers seem fairly comparable to CD's to me.
Let's run some numbers. After subtracting manufacturing, shipping & retailer cuts, a label makes about $3-5 from a record, and sends about $1 of that to the artist. So for the sake of argument, let's say you need to sell a thousand CDs to make the same revenue as a million Spotify streams. Given ~10 tracks per album, that means that the crossover point is 100 album plays. IOW, if I play an album on Spotify more than 100 times, I give the recording company more money than I would if I bought the CD.
That seems like totally fair pricing. I have no idea how many times the average CD is listened to but I bet it's above 100. The median would be below 100, but the mean above. The albums that are listened to 10's of thousands of times would really skew the average.
And yet Taylor swift received 500.000 USD for the last single month she was on Spotify.
Looking at price per stream does not make sense. Looking at average consumption does. Spotify is way above average album consumption per person and it (or similar services) has the potential to cover a very large part of the population.
I pay my monthly primarily fee for the convenience and legality of the service. I used to buy about 30 CDs a year, and then a similar number of albums on iTunes, and now there's Spotify, and that's all I use now.
I am probably the Worst Person On The Internet for the following view, but supporting the artists falls fairly low on my priority list, and certainly wasn't the reason I was buying CDs. For smaller acts, I'd have thought (citation needed) that the promotional power of Spotify for concerts and so on is worthwhile.
For larger acts, how much extra monetary support do they need, especially given how much cash concerts bring in? Would they stop producing music if they were making a decent middle class wage instead of millions of dollars?
Would we be in a better place if libraries didn't exist, and authors made super-normal profits as a result? Probably not. I pay for books for the same reason I pay for Spotify - the convenience of having the book I want, when I want it, rather than trudging down to my local library, and getting a dog-eared copy that smells of tobacco. But I note the cost of a book - especially for the Kindle - is really quite different from most CDs I've seen.
I have a friend who's a very talented backing musician who tours around playing guitar for the latest TV contest winners, and I note he's compensated on similar terms to talented developers I know who show up at companies and solve other people's problems.
Well they are supporting the artist. $500,000 paid to Taylor Swift is better than what she would have received if people listend to her albums on Grooveshark, or torrented the album, or whatever. Sure, half a cent per stream is not much, but it is something. It's not on the same level as buying a CD, but it's better than piracy, where revenue for the artist is zero.
The other thing is, it's not like Spotify is making bank off their service either - last I checked they still haven't posted a profit. They can only charge so much because people will only pay so much for a monthly music subscription, and 70% of revenue paid directly to artists/labels doesn't sound unreasonable to me.
I guess fundamentally the problem is "people don't want to pay much for music" not "Spotify is allowing people to not pay much for music". Artists seem to be placing the blame at Spotify's feet, when it is less people being willing to pay for music any more.
I think the thing people are missing here is that the $500,000 paid to Taylor Swift doesn't go directly to her, that is the gross royalty which presumably the publishers and label take the majority of. The artist themselves will receive a fraction of that. The situation is different for indie artists who are effectively the publisher and label too, but they have the opposite problem of lack of scale, and the per-play royalty is far more important for the long tail than for the hits, so the negative impact is greater. Taylor Swift could survive on magazine photoshoot revenue alone, an option not open to The Amazing Snakeheads or whoever.
Spotify may not be "making a profit" as a corporation but they still presumably have hundreds of salaried staff and their business model is basically jam tomorrow - their fixed costs are mostly the same whether anyone has signed up to paid subscriptions or not, so they all definitely get paid and the artists may or may not, but Spotify will sell their product in the meantime regardless. That isn't ethical. "Exposure" and "discovery" still work to the advantage of the large labels - Spotify is a new gatekeeper and being playlisted on the right Spotify list can make or break careers. There doesn't seem to be much transparency around how level the playing field is and how much influence the shareholders have.
For an artist, the contrast with iTunes is stark. Apple didn't turn round and say "we'll pay you if this is a success" - they paid the full royalty from day one. Spotify should have been regulated in the same way that radio is, and royalties should have been on a par with that, as a minimum, with a premium for the on-demand aspect.
To be honest, YouTube's history is far more ethically dubious but they don't seem to get the same heat from artists I guess because they are seen as too big/powerful to be criticised.
But like I said - that's the deal with signing to a major label - you agree that they will take a lot of the profits for your album in return for shouldering the costs of recording and promoting it. Artists can always remain independent and just pay a unit cost for distribution, but that means taking the risk of spending their own money on recording, and doesn't necessesarily come with the marketing opportunities that come with being signed to a major label.
I don't see Spotify as ethically dubious at all - they've had agreements with major labels from day one, and have only ever streamed music which they had a license for (unlike, say Grooveshark). Spotify only pays you if people lsiten to your music, in the same way that iTunes only pays you if people buy the music. It's the same deal, just on a 'per listen' not a 'per purchase' basis. The only issue with Spotify as I see it is that they don't pay artists (or their representative labels, which again, the artists signed up for) all that much, but like I said, they're not actually earning that much money either.
While your point is true in general, in the case of Taylor Swift she has a bit more sway. Not only is she, by far, the biggest act on a small indie label, she was the first artist signed by that label and her father was one of the initial investors. So while she doesn't own her own label, she is on a small indie label and no doubt has quite a bit of influence.
You are right that Spotify is lose/lose/lose. It's helping crush the industry, they're losing money hand over fist, and artists aren't being supported. Awesome.
Like I said, I'm totally cool if people want to not pay for music. That's fine. Great. Continue to not pay for music! I won't even blame you. Just don't falsely believe that Spotify supports artists you enjoy. If you want to support an artist you gotta do it yourself.
the issue is that you only make $500k if you are a name like taylor swift who ironically doesn't really need that money since she can make much more from touring. if you are an indie artist, you are making basically $0.
I happen to know a few indie artists in my area and I can tell you that after equipment, travel costs for gigs, printing media, hosting a website, etc, almost all of them are losing money.
If it is not worth it for the artists, why are they participating on Spotify? I think it is their problem to work out. It's not my job to work out the finances of artists.
As I mentioned elsewhere, I think in theory the economics could work, as people spend roughly the same on Spotify as they would have spend for music otherwise. How the money is being distributed is for the artists to negotiate. And of course it also depends on the distribution costs Spotify has, and the efficiency of their operation.
Well, Spotify bribed the labels by giving them ownership. This, notably, appears to have zero chance of flowing through to the artists. So said artists are right to feel aggrieved.
I'm willing to support artists who are being ripped off by their label (like boykott their label if they make it plausible it's evil). But ultimately, picking the right label is the artist's business, not mine. If the label doesn't pay them, they should switch the label.
Spotify is not tricking listeners, the recording industry is. Yes, listeners are getting tricked and your main point stands, but it's important to not let the recording industry get away with their blame shifting.
And I'm fine with that. If people want to support an artist then they should buy their album, go to liveshows, whatever. As long as we don't incorrectly assume that Spotify is supporting the artists we enjoy then everything is fine.