The US launch of Spotify has certainly garnered a lot of attention and has once again stirred the pot on the issue of streaming music, artist royalty payments, the major labels and the state of the music industry. Many pundits and artists are crying foul over the fact that artists get bupkis through Spotify’s free streaming service but Spotify is not alone. Here’s a small sampling of my royalties from different streaming sites:
Last.fm, 22 streams, $0.010010
Spotify, 1 stream, $0.006728
Rhapsody, 3 streams, $0.027300
MySpace, 1 stream, $0.001980
As you can see, I’m getting filthy rich off of music streaming. I made an entire penny off of 22 plays of Watch Your Step on Last.fm. Woo hoo! At this rate, I’ll make $10k after 22 million downloads which of course, I’ll make happen by next month, right?
I jest but the point I’m making is that as an artist, I’ve chosen to opt-in to this scheme by saying ok to digital download and digital stream services through my aggregator, CD Baby. I am not a victim – I gave my permission to CD Baby to allow my music on these sites and if you are an artist and sign a deal with a record label or distributor, chances are you are allowing it as well unless you didn’t pay attention to the deal you signed. That’s still a you problem and not a Spotify problem. Does it suck, yes, but it’s the system as we know it. You either play the game or you don’t and some artists choose not to participate. Coming from my view, I see the stream delivery as pure marketing. People who otherwise would not have known about my music can now listen and if they really like it, chances are they will purchase my music. Now when someone does actually want to pay the artist for music, I still would like more choices over iTunes, Amazon and other download sites (eMusic, etc.) and I would like a larger chunk of that revenue but that’s a different blog entry.
Will I opt-in to digital streaming for my next release? Probably not right away — I’d like to make as much money as possible off of the new release — but eventually, sure. And in the meantime, I’ve installed Spotify and am using it to discover new artists that I previously would not have known about.
I see Spotify as a much better solution than iTunes because of the social aspect, and the free element. Now, I know that this sounds funny coming from me, because they basically pay nothing, and at first glance, that’s antithetical to everything I am trying to do for artists and aficionados.
But no one can fund a record 22 million plays at a time. Not Lady Gaga… not even Kiss.
But now that I see the power of it, I want to partner with them. Once we get a link from your songs on Spotify to Patronism… the discovery game plays on their channel, and the creation of new work happens on ours.
It is very common that the label get 90-95% of the revenue from streaming income and record sales. In Sweden where Spotify have been active the longest the majority of income now is from Spotify (allot more than from iTunes sales). On the other hand income to the artists from live events have increased by 30% in Sweden from 2008-2011 so artists are actually earning more now than last year.
I guess the big question is, do the artists feel that 10-5% is enough from there labels?
When CD was the main distribution channel maybe that was the case, but is it fair today in the digital world where more and more can be sold digitally for a profit with little to none cost?
I agree with you that streaming services are pure marketing endeavors. I just released a CD on CDBaby and we clicked the link to be included in all digital distribution that pays something. As a classical percussionist who released a percussion duo CD, I don’t plan on selling a million albums (I would be happy if we sold 100 albums) and I hope we gain listeners from services like Spotify and TurnTable.fm.
ASCAP just announced a licensing agreement with Spotify and Turntable.fm and hopefully this will open up other avenues of revenue for artists.
Cheers!
Dave
Great post and I totally agree. When you agree to use CD Baby/iTunes etc.. you can’t complain when they put the screws to you. When the artist finally agrees to NOT play in this game, and builds an alternative, then we will have other options. Musicians need to harness todays powerful technology in a way that take power away from “the man” (labels, middle men etc…). I’m thinking about what Radiohead has done in the past. What concerns me is that services like iTunes, and CD Baby (and others) are all jockeying right now to fill this gap. They are seeing the opportunity and trying to jump in and be the new “labels” so to speak. They DO NOT have the interest of the artist in mind. It’s simple, really. Until musicians think more like the entrepreneur things won’t change.
A friend of mine got on Spotify a few days ago and sent me a message saying “How in the world is all of this free? How is anyone supposed to make money anymore?”
The figures Eli cites are probably similar to what even some of the biggest names are making. Check out the graph at the end of this: http://wp.me/pWgXS-3U
And the other “new funding” (Kickstarter for example) are similar–everyone is making money except the artist: http://wp.me/pWgXS-9n
On a related topic, if you haven read “Art Lessons: Learning from the Rise and Fall of Public Arts Funding” by the late Alice Goldfarb-Marquis, it’s very good, and it helps explain the public/private side of what is happening.
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Thought you might find this interesting, from http://www.thecynicalmusician.com and David McCandless:
“For a SOLO artist to make U.S. minimum wage on different platforms an artist must:
-Sell 155 self produced albums per month via Amazon or CD Baby. That’s over 1,700 CDs each year. Keep in mind that only 5% of musicians EVER sell over 1,000 albums.
-Sell 12,388 tracks per month on iTunes.
-Reach 880,000 plays per month on Rhapsody.
-Reach 1.5 million plays per month on Last.fm.
-Reach 4.5 million plays per month on Spotify.”