Like others in this thread, I naively assumed this was how Spotify already worked, and wondered why the payouts tended to be so low. Now it makes sense, and puts the numbers here (http://www.spotifyartists.com/spotify-explained/) in context.
Realistically, it would be both hard to change structurally and a hard sell for major labels to give up what is effectively a subsidy of popular music by indie fans. Let’s take the author’s thought experiment to its logical extreme:
Imagine “Terry” listened to just one obscure band for the entire month of February. $7 of his $10 subscription fee is going to artists, but let’s say he’s also the only fan of that band on Spotify. So that band has effectively zero percent of Spotify’s plays for the month, meaning that the band gets effectively zero percent of Spotify’s monthly revenue.
Terry thinks $7 went to his favorite band, but it actually got divided up among February’s top 40, with only a fraction of a fraction of a cent going to the band!
That's an interesting problem — this is only true if indie fans listen to less music than pop fans.
Imagine there are 10 users, 9 of whom only listen to pop, one only listens to indy, all of whom pay 10$. Now consider two scenarios: A. everybody listens to 100 tracks per month, or B. pop listeners stream 110 tracks per month, and the indy listener streams 10 track per month
Scenario A:
9 pop * 100 tracks = 900 tracks streamed
1 indy * 100 tracks = 100 tracks streamed
total 1000 tracks streamed
total to pop artists = 900/1000 * 100$ = 90$
total to indy artists = 100/1000 * 100$ = 10$
Scenario B:
9 pop * 110 tracks = 990 tracks streamed
1 indy * 10 tracks = 10 tracks streamed
total 1000 tracks streamed
total to pop artists = 990/1000 * 100$ = 99$
total to indy artists = 10/1000 * 100$ = 1$
The argument remains that you'd expect your money to go to the artists you listen to, but the payment arrangements don't necessarily benefit mainstream artists over indies, unless indie fans listen to less music than mainstream music fans.
EDIT: Now that I think of it, it probably benefits pop music over metal and progressive rock (or, worse still, classical music), because pop tends towards short songs, so more tracks played over the same period of time.
But there's an impedance mismatch here. The copyright holders are being paid per-play but the users are paying all-you-can-eat. That's always going to be an imbalance. The only way to "fix" that would be to charge "Terry" a cent per listen like a jukebox.
This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.
This is the same problem that any unlimited service has to deal with. Why does a user who downloads 10GB of data per month on their cable modem have to pay the same price as a user who downloads 300GB? They're subsidizing his usage! Why should I have to pay the same price as everyone else for Netflix when I really only ever watch House of Cards?
The reason Spotify specifically works this way is because any other reimbursement model is untenable in the streaming world. Rev share works "off the top" because the overhead of managing reimbursement (specifically the audit overhead) at the subscriber level would wipe away too much margin. Pandora had an overly complicated revenue sharing scheme and it nearly bankrupted the company until they moved to a model closer to Spotify's.
But more specifically, revenue share works this way because that's how it's defined in the contracts that both the major label and the indie label signed. If the indie labels thought it was a terrible idea, they wouldn't have signed it. Most indie artists anymore simply expect to make next to nothing on distribution and playback of their music: they make their money on the live shows.
I'm a bit confused by the reasoning here. It's clear that light users are subsidizing heavy users, but why are we assuming that light users prefer indie bands and heavy users prefer pop music?
This is how a large chunk of music royalty distribution works. For example, fees collected from restaurants, shops and other public places basically ends up in a large bucket.
Later the funds are being distributed after "market share", which means most of it will be sent to Taylor Swift or the Michael Jackson estate, even if the restaurant played nothing but epic fusion mathcore.
I'm guessing that the "big five" asked for a model similar to this when Spotify started, because it was a model they understood.
> Realistically, it would be both hard to change structurally
Perhaps there is a simpler solution. Here's one idea: for accounting purposes, only count a limited number of plays per month, per user. It can be the first 100 plays, or if you want to prevent any biasing, it can be a random sample of 100 of each user's plays.
A random sampling can even be audited to prove that it was fair.
Well put. I'd like to further the notion that major labels / legacy businesses do their best to eat all the pie and only leave crumbs for the rest of the community. Put in a metaphor, when gorillas fight, nobody cares about the ants until enough of them start stinging together. Not perfect, but hopefully you get the point.
My source is the following article over at Complete Music Update, which elaborates on the tactics employed by YouTube in their goal of competing with Spotify:
Indeed, a casual listener like myself is basically paying money to the top artists while not listening which is a bit absurd. It is a problem that should be possible to at least partly resolve by calculating artist market share without a bias towards users that have Shopify open all the time. Incidentally, I blogged about this some time ago: https://davidlebech.com/thoughtflow/spotify-royalties/
So, under your model, Terry's band gets $7. Total. It's not even worth bothering to get involved with spotify if you only get one single cheap lunch out of it.
As it currently stands, Terry's band also gets a small amount of money from people who aren't listening to it, which is something you didn't include in your argument. There's really not going to be much difference for the tiny artists, however you carve it up. $7 is 'effectively zero percent of Spotify's monthly revenue' as well.
I believe this is how radio works too; my friend had some records of his played on the radio and got together a list of when they were, date time and all and approached the BBC about getting payments; based on the same reasoning/calculations as above he got a big fat £0.00.
It's easier to understand if you remember the major labels got 18% of spotify for their licensing deal. A payment scheme that preferentially paid major labels would then be stunning...
His proposition may sound simple to him, but it really isn't.
It becomes very hard to ensure you are being paid properly in his proposed scenario, I would personally expect it would create even more controversy, or extremely long payment records every month for artists.
For instance say we have 500 paid users. Lets call them user1 through user500. Each user listens to the same number of songs a month as the value following the word user in their name. Then we have 500 different rates at which artists are paid for their song playing ranging from the entire monthly fee to 1/500th the monthly fee. Therefore providing a full accounting of each of those rates would be necessary for an artist to understand why they got paid more the month they had a single play than the month they had 400 plays.
To be fair assuming the minimum song length on Spotify is 30 seconds this record provided to artists would have a max length of (31 * 24 * 60 * 2)+1 = 89281 items for premium users plus items for add supported users if they did not overlap exactly in rate. Assuming all Premium users paid the same rate, which is not the case.
Edit: I ignored the 0 listen use case, as well as spotify's 30% cut to simplify an already complicated 'simple proposal'. I also forgot to account for daylight savings time in which a day can have 25 hours.
This is a very good point. I'm sure that Spotify could encode the rules and accurately calculate what each artists was owed under such a model, but it would be far more complicated to communicate to people.
There are already a bunch of assumptions in the payment model, do you pay per track? (In which case, the artists could game it by sticking in 30 second intro tracks and things like that). Do you pay per minute? (In which case, artists can increase their revenue by putting in dead time in "bonus tracks").
It would be an interesting experiment for Spotify to calculate what the payouts would be given the proposed scheme, and compare the differences.
Anecdotally, the people I have met that work at Spotify are a lot more sympathetic to the indie artist and non-Top 40 music than the average person listening to Spotify. There is a reason they keep building ways to discover non-Top 40 music. I'm sure they are interested in making things better for these types of artists.
It gets even more complex if you take the fairness he's suggesting to it's logical conclusion. The system proposed still values playing each song equally, but shorter songs comprise less of a user's streaming activity.
So the per play rate should be determined by taking 70% of the user's subscription, dividing that by the number of seconds of streaming that user streamed that month and then multiplying that by the number of seconds that user streamed the artist's song (since songs can be stopped mid-song).
Regardless of how they bill, it's likely that artists will have to, for the most part, just trust Spotify. There can, and should, be independent audits of the billing code. It seems an analogous situation to what the NGC does around computerized gaming systems. Users have to trust that the system is fair, but the NGC is very thorough about checking that code complies with applicable laws.
Another thing to note (although it represents a pretty useless edge case) is that given a user who spends $10 a month on Premium if they were to listen to 1400 songs in a single month (10/(.005/.7)) bands who he is the only person who listens to and he only listens to once would receive nothing, due to accounting (and the ieee) using round to even, and 0 being the closest even penny.
I realize this the amount they are paying now per song is not too far above the $0.005 amount which rounds to 0, and therefore given changes in the market could potentially drop to an amount which would round to 0 for single play also. I also get that a single penny isn't what anyone is going to be upset about. Also that few artists will have a single play. I just find the low number of plays (1400 in a month isn't really that many) required by a person for an artist to potentially not get paid interesting.
Uber and Lyft don't provide per-ride accounting for rides for this reason. I think spotify could get away with "N plays - total $X" in this case, especially since user privacy is at stake. Also the %30 cut is extremely easy to model -- a user that pays $10 with a 30% cut is like a user that pays $7 without one.
How is this any different than say a phone bill format? that shows totals such as 'minutes' $XX, 'data' $XX' and then you can optionally view the entire logs
Vulfpeck is also the band behind Sleepify[1], the album of ten silent 30s songs which fans looped on Spotify while they slept. Vulfpeck earned $20k as a result and used it to organize a tour.
Vulfpeck is also the hottest funk band that currently rocks this planet. But as it seems, I should rather purchase their albums from Bandcamp than streaming them via Spotify.
Vulfpeck is also also the band behind four really terrific EPs in as many years, and you should absolutely give them a listen[1], although ideally not on Spotify.
1) I think Ek is right - there isn't much money in the consumption of music. I do believe music is extremely effective at getting people's attention, but outside of that, it's value is much lower than we currently give it credit for.
2) I'm reminded of the TED Talk by Clay Shirky on institutions vs collaboration[0] where he explains power law distribution (watch from 6:01 onward specifically) with regard to photos of Iraq on Flickr. He says (paraphrased) "that figure at the bottom at 10 photos per photographer is a lie. it doesn't matter...the top 10% of the most prolific photographers account for almost 75% of the photos. 80% of the contributors are below the average amount of contributions" This is Spotify in a nutshell. People wan't access to all of the rap music in the world even if they are only going to actually consume 20% of it, so that in the rare chance they listen to one song of the other 80% that it's still made available. In other words, the overall utility of Spotify's system is only valid when it's whole, but the individuals who are necessary for it to be whole are unevenly distributed (in this case number of plays). So the argument then becomes who needs who more?
Spotify has been villified since the beginning, and I certainly want a more fair system to exist for artists.
That said, has there EVER been a business model in the US that was profitable for artists? I don't think there was ever money in music for artists from album sales.
The cost of distributing and promoting music is just more expensive than making an album.
Artists are frustrated. And lite listeners should be too.
Artists who don’t like it or aren’t getting enough value — either through payouts or marketing - should simply opt out of the system (if they can; in many cases control might rest with their record label or another rights holder). Some artists never opted in (the last time I checked, this included AC/DC) or withdrew part or all of their collections (Taylor Swift).
I’ve watched the Spotify model appear in the ebooks marketplace, through services such as Oyster and Scribd. They target readers, and ultimately seek to ensure large payouts to investors, platform owners, and large publishing partners. Authors have largely been treated as an afterthought. Kindle Unlimited is even worse, demanding exclusivity and lowering sales of many authors.(1)
I believe the time has come for recording artists, filmmakers, authors, and other media producers to band together to fight unfair or predatory platform practices. Subscription services may be great for consumers, but they don’t pay enough to the people who are creating the products that draw audiences in the first place.
The proposition in the article only works because users pay a fixed monthly rate for unlimited listening, rather than a charge that is metered based on how much they stream.
Jack Stratton's proposition is wagered on the proposition that the users who listen to his tracks are ones who don't listen to very much other stuff. His listeners pay $9.99 per months, but don't stream very much, and a big chunk of what they do stream is Stratton's material. He doesn't want most of that $9.99 going to those other damn artists, who are just random junk whose material isn't sought out by anyone, but streamed randomly in Yoga classes, elevators, supermarkets or wherever.
If there is some user who paid $9.99, 70% of which is $7 going to the artists, and half of what that user listened to was Stratton's tracks, Stratton wants $3.50 for that month, for that user alone. Add to that other similar users, and extrapolate to twelve months and you have some non-negligible cash at the end of the year: better than a fraction of a cent.
Problem is, no matter how you slice the pie, it is a zero-sum game. There is so much revenue and so many artists.
Most artists, likely including Stratton, will lose this zero-sum game no matter how the pie is carved.
There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts. The proposed rule would just create a tiny group which gets quite a lot more revenue than the rest, at the cost of slightly impoverishing every member of the remaining group, who then gets a slightly smaller fraction of a cent.
It's actually a good rule from Spotify's POV because this tiny group would represent "success stories" which Spotify could use for promotion.
On a different topic, this kind of reminds me of the whiners who complain about online dating sites. "I'm obviously a more qualified bachelor than most of the losers who make profiles on this site, so if only the implementation of the site were based on somewhat different rules, then I would easily get replies from the women I'm interested in. I might have found a girlfriend long ago if it weren't for this damn dating site. Waaaah ... sniff!"
>The proposed rule would just create a tiny group which gets quite a lot more revenue than the rest, at the cost of slightly impoverishing every member of the remaining group, who then gets a slightly smaller fraction of a cent.
Nope, this rule would do the opposite. Currently, only a very small fraction are getting any "real" money at all. This would cut out some chunk of their revenue and distribute it slightly more evenly across all the artists. This is a more "fair for everyone" approach, in the sense that socialism is more "fair for everyone".
(Personally I like the idea a lot, but it sucks for the artists currently making a killing on Spotify. Perhaps for big labels as well, though since they have a ton of small artists typically it might be near neutral for them)
3.5$ per user(!, or should I say a fan ) is significantly more than just negligible compared with fractions of a cent for every user.
It is also more correct, your subscription is distributed to artists whose music you actually listened to. It repeat listens are accounted for, then it would be even more fair, since you usually listen more to your favorite artists.
Currently the distribution just isn't correct. This is probably because of technical reasons.
Is the description of Spotify's model to pay artists accurate? It sounds suspiciously simple, free of any special deals with labels to get artists on board etc... (which I had just assumed was a necessary evil)
And do total stream divisions take into account only premium accounts? Or do they also include free ones? Because ya, as a premium user, I really do want (and perhaps naively expected) my $9/mo split between the artists I listen to, which certainly seems the fairest.
I think the problem is that there is no distinction made between computer generated playlists (eg: Yoga Radio) and listener initiated streams.
Why not keep the existing royalty structure, but split the royalty pie based on user initiated streams and computer generated streams. If someone buys premium and only listens to Yoga Radio:
30% Spotify
70% Existing Yoga Radio Big Pool Royalty Structure
But if 50% of their listening is actual artists they have chosen (download to phone, click on artist/album or song/shared playlist from someone else/own playlist):
30% Spotify
35% Existing Yoga Radio Big Pool
35% Direct cut determined by per-listener chart
Or if Mom signs up and only listens to her kid:
30% Spotify
0% Yoga Radio
70% Direct cut determined by per-listener chart (all to one with love from Mom)
This not only rewards artists with loyal fanbases, but it also fairly compensates artists who compete in the mass market where people just listen to the radio and don't care.
> Terry is below average. In 2014 he averaged 350 streams per month. If his subscription money only went to artists he listened to, it would’ve been $0.02 per stream.
> Instead it was $0.00786.
This sounds like a much better way to do it. The artists should ask Spotify to change it. However I guess the big players don't really want it changed.
Old geezer here: Does anyone know how often the songs on a CD are played? If I spent $10 on a CD, what was that likely to generate per-play? (I'm old enough that I remember taping LPs and then listening to the tapes -- which was a near-universal practice amongst the folks I knew.)
My guess is that great albums got listened to a lot -- driving down the revenue "per play" but generating great word of mouth and lots of net record/cd sales. How much of that applies to Spotify?
Spotify's "all you can listen to" model inherently implies they're going to be used as background music.
Could be worse. They could have their own musicians record popular songs and classics, and just pay the statutory royalty to the composer. Seeburg did that in the 1950s.[1] They sold the Seeburg 1000 background music system, and rented out phonograph records of background music, all recorded by Seeburg musicians. Stores rented and serviced the simple record changer, which endlessly played a stack of 25 records (both sides), about 50 hours of music. It's not a jukebox; it's much simpler.
Instead of copyrighting the disks (back then you had to register a copyright and pay for renewals), they used a primitive form of DRM - the records are 16 2/3 RPM, 9 inch diameter, 2 inch center hole, 0.005" stylus width, mono. This is incompatible with everything except a Seeburg 1000, though it's not hard to adapt a turntable to play them.
Someone has digitized the available Seeburg 1000 records, and you can listen to about 6000 songs of '50s - 70s background music.
1. As soon as I'm playing more tracks than the number of tracks an average user pays I'm actually paying less than what Spotify currently pays.
2. People who do not play much music will probably not be exposed to much else than well know artists (Ie. Top 40). Or otherwise said: if I'm into music and spend time discovering not-so well known bands I'll probably play more tracks than the average user.
3. The number of people who will play less than the average number of tracks will be bigger than the number who play more.
The end result is that rich and well known artists will end up getting more money, and lesser known artists less.
This is an interesting proposition, and one which I'm sure has been thought about and considered by the labels. However, I think people who think this would be better for indie artists are misguided.
The reason this change would very likely not benefit indie artists is simple:
People who listen to more music are more likely to have a high proportion of their music listening being "indie" than those people listening to less.
Pdpi's example explains very nicely how this would benefit pop artists over indie.
Does this system have other benefits?
Yes, a wonderful inadvertent thing you get for free is eliminating fraud listening. People would be unable to create accounts to listen to one artist on repeat all month long and laugh six months later when the checks come in (see the Vulfpeck story for those unfamiliar)
Would some indie artists benefit from the change?
Yes, of course some artists wouldbenefit, that's pretty much inevitable under any calculation methodology change.
None of this addresses the issue of time spent listening. Classical and Jazz payouts will consistently under-index people's time spent listening simply because the track recordings are so much longer than the average recording length. A time spent listening payout system would be a huge improvement, but then you can imagine people trying to manipulate this (throwing 25 minutes of silence on the last track of the album anyone?). Smoke and mirrors...
It's incredible that there's no money in a thing that has been a need for the human being for centuries. Actually entertainment in general, has been a need since the origin of our species.
The indie music industry as a whole is already selling more than the 3 major record labels together in the US. Once that 20th century model is 100% over, we will see technology doing really cool things in collaboration with music.
The real truth here is music is becoming cheaper and cheaper to make. A few grand worth of equipment is all that is required to generate most of the stuff you probably listen to, and if that isn't the case now it will be in what 5? 10 years?
Also think about the talent pool. The only longer line at the job fair is probably for playboy photographer.
Tons of people wanting to make music + low barrier to entry = Cheap music
The only thing attempting to hold this dinosaur market afloat is monolithic record companies, and their stranglehold on the popular genre seems to give them enough leverage to arrange a deal in their favor. Hence what we observe here.
What will likely end up happening is the next cost of music will become zero to the end user and bands and artists will find new revenue streams. Such as live performances, or perhaps product placement. Or does economics not apply to art?*
*I'm the weird guy who doesn't like music so I may be entirely wrong.
There's some audio content that fits Spotify model better, since it's optimized for endless replays
* dance/electronic
* elevator music
* toddler songs (audience loves hearing that same song for 1,000th time)
On the other end of the spectrum you have audio content that is intended to be listened to once, with extremes being audio books and radio news.
An artist optimizing for endless replays would do well on Spotify: "E.D.M. artists like Avicii and David Guetta are seeing payouts in the millions. Avicii’s “Wake Me Up,” the most streamed song on Spotify, has more than three hundred million spins, which, using Spotify’s benchmark per-stream rate, would be worth about two million dollars to the rights holders." http://www.newyorker.com/magazine/2014/11/24/revenue-streams
But it's not perfect model for every artist out there.
[+] [-] mortenjorck|11 years ago|reply
Realistically, it would be both hard to change structurally and a hard sell for major labels to give up what is effectively a subsidy of popular music by indie fans. Let’s take the author’s thought experiment to its logical extreme:
Imagine “Terry” listened to just one obscure band for the entire month of February. $7 of his $10 subscription fee is going to artists, but let’s say he’s also the only fan of that band on Spotify. So that band has effectively zero percent of Spotify’s plays for the month, meaning that the band gets effectively zero percent of Spotify’s monthly revenue.
Terry thinks $7 went to his favorite band, but it actually got divided up among February’s top 40, with only a fraction of a fraction of a cent going to the band!
[+] [-] pdpi|11 years ago|reply
That's an interesting problem — this is only true if indie fans listen to less music than pop fans.
Imagine there are 10 users, 9 of whom only listen to pop, one only listens to indy, all of whom pay 10$. Now consider two scenarios: A. everybody listens to 100 tracks per month, or B. pop listeners stream 110 tracks per month, and the indy listener streams 10 track per month
Scenario A:
Scenario B: The argument remains that you'd expect your money to go to the artists you listen to, but the payment arrangements don't necessarily benefit mainstream artists over indies, unless indie fans listen to less music than mainstream music fans.EDIT: Now that I think of it, it probably benefits pop music over metal and progressive rock (or, worse still, classical music), because pop tends towards short songs, so more tracks played over the same period of time.
[+] [-] pjc50|11 years ago|reply
This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.
[+] [-] exelius|11 years ago|reply
The reason Spotify specifically works this way is because any other reimbursement model is untenable in the streaming world. Rev share works "off the top" because the overhead of managing reimbursement (specifically the audit overhead) at the subscriber level would wipe away too much margin. Pandora had an overly complicated revenue sharing scheme and it nearly bankrupted the company until they moved to a model closer to Spotify's.
But more specifically, revenue share works this way because that's how it's defined in the contracts that both the major label and the indie label signed. If the indie labels thought it was a terrible idea, they wouldn't have signed it. Most indie artists anymore simply expect to make next to nothing on distribution and playback of their music: they make their money on the live shows.
[+] [-] toby|11 years ago|reply
[+] [-] nissehulth|11 years ago|reply
Later the funds are being distributed after "market share", which means most of it will be sent to Taylor Swift or the Michael Jackson estate, even if the restaurant played nothing but epic fusion mathcore.
I'm guessing that the "big five" asked for a model similar to this when Spotify started, because it was a model they understood.
[+] [-] fragsworth|11 years ago|reply
Perhaps there is a simpler solution. Here's one idea: for accounting purposes, only count a limited number of plays per month, per user. It can be the first 100 plays, or if you want to prevent any biasing, it can be a random sample of 100 of each user's plays.
A random sampling can even be audited to prove that it was fair.
[+] [-] 6stringmerc|11 years ago|reply
My source is the following article over at Complete Music Update, which elaborates on the tactics employed by YouTube in their goal of competing with Spotify:
http://www.completemusicupdate.com/article/independent-label...
[+] [-] dlebech|11 years ago|reply
[+] [-] vacri|11 years ago|reply
As it currently stands, Terry's band also gets a small amount of money from people who aren't listening to it, which is something you didn't include in your argument. There's really not going to be much difference for the tiny artists, however you carve it up. $7 is 'effectively zero percent of Spotify's monthly revenue' as well.
[+] [-] 72deluxe|11 years ago|reply
[+] [-] thinkcontext|11 years ago|reply
http://help.grooveshark.com/customer/portal/articles/669416-...
[+] [-] 0x0|11 years ago|reply
[+] [-] x0x0|11 years ago|reply
[+] [-] genericuser|11 years ago|reply
It becomes very hard to ensure you are being paid properly in his proposed scenario, I would personally expect it would create even more controversy, or extremely long payment records every month for artists.
For instance say we have 500 paid users. Lets call them user1 through user500. Each user listens to the same number of songs a month as the value following the word user in their name. Then we have 500 different rates at which artists are paid for their song playing ranging from the entire monthly fee to 1/500th the monthly fee. Therefore providing a full accounting of each of those rates would be necessary for an artist to understand why they got paid more the month they had a single play than the month they had 400 plays.
To be fair assuming the minimum song length on Spotify is 30 seconds this record provided to artists would have a max length of (31 * 24 * 60 * 2)+1 = 89281 items for premium users plus items for add supported users if they did not overlap exactly in rate. Assuming all Premium users paid the same rate, which is not the case.
Edit: I ignored the 0 listen use case, as well as spotify's 30% cut to simplify an already complicated 'simple proposal'. I also forgot to account for daylight savings time in which a day can have 25 hours.
[+] [-] mkolodny|11 years ago|reply
Having said that, the accounting doesn't have to be that complex:
1. When paying out an artist, list out the (anonymous) users who listened to their music on Spotify.
2. For each user:
a) Show the what percent of the user's total listening was spent listening to that artist. (e.g. 40%)
b) Multiply the amount the user paid by the percentage from (a). (e.g. $10/month * 40% = $4)
3. Sum all of the amounts from #2. (e.g. $4 + $3 + ... = $total)
Also, accounting would only be a problem for Spotify. 99% of artists would prefer this model, even if it meant more complex accounting.
[+] [-] krschultz|11 years ago|reply
There are already a bunch of assumptions in the payment model, do you pay per track? (In which case, the artists could game it by sticking in 30 second intro tracks and things like that). Do you pay per minute? (In which case, artists can increase their revenue by putting in dead time in "bonus tracks").
It would be an interesting experiment for Spotify to calculate what the payouts would be given the proposed scheme, and compare the differences.
Anecdotally, the people I have met that work at Spotify are a lot more sympathetic to the indie artist and non-Top 40 music than the average person listening to Spotify. There is a reason they keep building ways to discover non-Top 40 music. I'm sure they are interested in making things better for these types of artists.
[+] [-] curun1r|11 years ago|reply
So the per play rate should be determined by taking 70% of the user's subscription, dividing that by the number of seconds of streaming that user streamed that month and then multiplying that by the number of seconds that user streamed the artist's song (since songs can be stopped mid-song).
Regardless of how they bill, it's likely that artists will have to, for the most part, just trust Spotify. There can, and should, be independent audits of the billing code. It seems an analogous situation to what the NGC does around computerized gaming systems. Users have to trust that the system is fair, but the NGC is very thorough about checking that code complies with applicable laws.
[+] [-] vlunkr|11 years ago|reply
[+] [-] genericuser|11 years ago|reply
I realize this the amount they are paying now per song is not too far above the $0.005 amount which rounds to 0, and therefore given changes in the market could potentially drop to an amount which would round to 0 for single play also. I also get that a single penny isn't what anyone is going to be upset about. Also that few artists will have a single play. I just find the low number of plays (1400 in a month isn't really that many) required by a person for an artist to potentially not get paid interesting.
[+] [-] thedufer|11 years ago|reply
Fortunately, the 25-hour day is in November, which is only a 30-day month. So you're okay on that front.
[+] [-] MichaelGG|11 years ago|reply
[+] [-] noamsml|11 years ago|reply
[+] [-] bobbles|11 years ago|reply
[+] [-] ianlevesque|11 years ago|reply
[+] [-] kfor|11 years ago|reply
[1] http://en.wikipedia.org/wiki/Sleepify
[+] [-] mod|11 years ago|reply
May as well ask people to play some more normal 30s songs and turn off their speakers, avoid being delisted as a non-album.
[+] [-] matthiasv|11 years ago|reply
[+] [-] sahara|11 years ago|reply
[1] http://vulf.bandcamp.com/
[+] [-] ssharp|11 years ago|reply
[+] [-] mbesto|11 years ago|reply
1) I think Ek is right - there isn't much money in the consumption of music. I do believe music is extremely effective at getting people's attention, but outside of that, it's value is much lower than we currently give it credit for.
2) I'm reminded of the TED Talk by Clay Shirky on institutions vs collaboration[0] where he explains power law distribution (watch from 6:01 onward specifically) with regard to photos of Iraq on Flickr. He says (paraphrased) "that figure at the bottom at 10 photos per photographer is a lie. it doesn't matter...the top 10% of the most prolific photographers account for almost 75% of the photos. 80% of the contributors are below the average amount of contributions" This is Spotify in a nutshell. People wan't access to all of the rap music in the world even if they are only going to actually consume 20% of it, so that in the rare chance they listen to one song of the other 80% that it's still made available. In other words, the overall utility of Spotify's system is only valid when it's whole, but the individuals who are necessary for it to be whole are unevenly distributed (in this case number of plays). So the argument then becomes who needs who more?
[0] - https://www.youtube.com/watch?v=sPQViNNOAkw&t=361
[+] [-] tpeaton|11 years ago|reply
That said, has there EVER been a business model in the US that was profitable for artists? I don't think there was ever money in music for artists from album sales.
The cost of distributing and promoting music is just more expensive than making an album.
[+] [-] ilamont|11 years ago|reply
Artists who don’t like it or aren’t getting enough value — either through payouts or marketing - should simply opt out of the system (if they can; in many cases control might rest with their record label or another rights holder). Some artists never opted in (the last time I checked, this included AC/DC) or withdrew part or all of their collections (Taylor Swift).
I’ve watched the Spotify model appear in the ebooks marketplace, through services such as Oyster and Scribd. They target readers, and ultimately seek to ensure large payouts to investors, platform owners, and large publishing partners. Authors have largely been treated as an afterthought. Kindle Unlimited is even worse, demanding exclusivity and lowering sales of many authors.(1)
I believe the time has come for recording artists, filmmakers, authors, and other media producers to band together to fight unfair or predatory platform practices. Subscription services may be great for consumers, but they don’t pay enough to the people who are creating the products that draw audiences in the first place.
1. http://www.kboards.com/index.php?topic=202571.0
[+] [-] Flimm|11 years ago|reply
However, he then makes the leap that that means that less popular artists are subsidising the popular ones, which has yet to be proved.
[+] [-] kazinator|11 years ago|reply
Jack Stratton's proposition is wagered on the proposition that the users who listen to his tracks are ones who don't listen to very much other stuff. His listeners pay $9.99 per months, but don't stream very much, and a big chunk of what they do stream is Stratton's material. He doesn't want most of that $9.99 going to those other damn artists, who are just random junk whose material isn't sought out by anyone, but streamed randomly in Yoga classes, elevators, supermarkets or wherever.
If there is some user who paid $9.99, 70% of which is $7 going to the artists, and half of what that user listened to was Stratton's tracks, Stratton wants $3.50 for that month, for that user alone. Add to that other similar users, and extrapolate to twelve months and you have some non-negligible cash at the end of the year: better than a fraction of a cent.
Problem is, no matter how you slice the pie, it is a zero-sum game. There is so much revenue and so many artists. Most artists, likely including Stratton, will lose this zero-sum game no matter how the pie is carved.
There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts. The proposed rule would just create a tiny group which gets quite a lot more revenue than the rest, at the cost of slightly impoverishing every member of the remaining group, who then gets a slightly smaller fraction of a cent.
It's actually a good rule from Spotify's POV because this tiny group would represent "success stories" which Spotify could use for promotion.
On a different topic, this kind of reminds me of the whiners who complain about online dating sites. "I'm obviously a more qualified bachelor than most of the losers who make profiles on this site, so if only the implementation of the site were based on somewhat different rules, then I would easily get replies from the women I'm interested in. I might have found a girlfriend long ago if it weren't for this damn dating site. Waaaah ... sniff!"
[+] [-] clay_to_n|11 years ago|reply
Nope, this rule would do the opposite. Currently, only a very small fraction are getting any "real" money at all. This would cut out some chunk of their revenue and distribute it slightly more evenly across all the artists. This is a more "fair for everyone" approach, in the sense that socialism is more "fair for everyone".
(Personally I like the idea a lot, but it sucks for the artists currently making a killing on Spotify. Perhaps for big labels as well, though since they have a ton of small artists typically it might be near neutral for them)
[+] [-] pqomdv|11 years ago|reply
It is also more correct, your subscription is distributed to artists whose music you actually listened to. It repeat listens are accounted for, then it would be even more fair, since you usually listen more to your favorite artists.
Currently the distribution just isn't correct. This is probably because of technical reasons.
[+] [-] Nemcue|11 years ago|reply
How on earth is it a "zero sum game" that they are paid their fair share of the cut?
> There is little difference between 99% of the artists getting peanuts, and 100% of the artists getting peanuts.
You just pulled those numbers out of your ass.
[+] [-] nicpottier|11 years ago|reply
And do total stream divisions take into account only premium accounts? Or do they also include free ones? Because ya, as a premium user, I really do want (and perhaps naively expected) my $9/mo split between the artists I listen to, which certainly seems the fairest.
[+] [-] weissadam|11 years ago|reply
Why not keep the existing royalty structure, but split the royalty pie based on user initiated streams and computer generated streams. If someone buys premium and only listens to Yoga Radio:
But if 50% of their listening is actual artists they have chosen (download to phone, click on artist/album or song/shared playlist from someone else/own playlist): Or if Mom signs up and only listens to her kid: This not only rewards artists with loyal fanbases, but it also fairly compensates artists who compete in the mass market where people just listen to the radio and don't care.Best of both worlds, no?
[+] [-] cordite|11 years ago|reply
I guess not.
It does seem more fair for the artist this way, though it probably means they need to do more crunching with map reduce or something.
[+] [-] thomasahle|11 years ago|reply
> Instead it was $0.00786.
This sounds like a much better way to do it. The artists should ask Spotify to change it. However I guess the big players don't really want it changed.
[+] [-] adamc|11 years ago|reply
My guess is that great albums got listened to a lot -- driving down the revenue "per play" but generating great word of mouth and lots of net record/cd sales. How much of that applies to Spotify?
[+] [-] Animats|11 years ago|reply
Could be worse. They could have their own musicians record popular songs and classics, and just pay the statutory royalty to the composer. Seeburg did that in the 1950s.[1] They sold the Seeburg 1000 background music system, and rented out phonograph records of background music, all recorded by Seeburg musicians. Stores rented and serviced the simple record changer, which endlessly played a stack of 25 records (both sides), about 50 hours of music. It's not a jukebox; it's much simpler.
Instead of copyrighting the disks (back then you had to register a copyright and pay for renewals), they used a primitive form of DRM - the records are 16 2/3 RPM, 9 inch diameter, 2 inch center hole, 0.005" stylus width, mono. This is incompatible with everything except a Seeburg 1000, though it's not hard to adapt a turntable to play them.
Someone has digitized the available Seeburg 1000 records, and you can listen to about 6000 songs of '50s - 70s background music.
[1] http://radiocoast.com/
[+] [-] breyten|11 years ago|reply
The end result is that rich and well known artists will end up getting more money, and lesser known artists less.
[+] [-] malloreon|11 years ago|reply
Would the users follow?
[+] [-] yermoshin|11 years ago|reply
The reason this change would very likely not benefit indie artists is simple:
People who listen to more music are more likely to have a high proportion of their music listening being "indie" than those people listening to less.
Pdpi's example explains very nicely how this would benefit pop artists over indie.
Does this system have other benefits?
Yes, a wonderful inadvertent thing you get for free is eliminating fraud listening. People would be unable to create accounts to listen to one artist on repeat all month long and laugh six months later when the checks come in (see the Vulfpeck story for those unfamiliar)
Would some indie artists benefit from the change?
Yes, of course some artists wouldbenefit, that's pretty much inevitable under any calculation methodology change.
None of this addresses the issue of time spent listening. Classical and Jazz payouts will consistently under-index people's time spent listening simply because the track recordings are so much longer than the average recording length. A time spent listening payout system would be a huge improvement, but then you can imagine people trying to manipulate this (throwing 25 minutes of silence on the last track of the album anyone?). Smoke and mirrors...
[+] [-] baristaGeek|11 years ago|reply
The indie music industry as a whole is already selling more than the 3 major record labels together in the US. Once that 20th century model is 100% over, we will see technology doing really cool things in collaboration with music.
[+] [-] cmdrfred|11 years ago|reply
Also think about the talent pool. The only longer line at the job fair is probably for playboy photographer.
Tons of people wanting to make music + low barrier to entry = Cheap music
The only thing attempting to hold this dinosaur market afloat is monolithic record companies, and their stranglehold on the popular genre seems to give them enough leverage to arrange a deal in their favor. Hence what we observe here.
What will likely end up happening is the next cost of music will become zero to the end user and bands and artists will find new revenue streams. Such as live performances, or perhaps product placement. Or does economics not apply to art?*
*I'm the weird guy who doesn't like music so I may be entirely wrong.
[+] [-] prostoalex|11 years ago|reply
* dance/electronic
* elevator music
* toddler songs (audience loves hearing that same song for 1,000th time)
On the other end of the spectrum you have audio content that is intended to be listened to once, with extremes being audio books and radio news.
An artist optimizing for endless replays would do well on Spotify: "E.D.M. artists like Avicii and David Guetta are seeing payouts in the millions. Avicii’s “Wake Me Up,” the most streamed song on Spotify, has more than three hundred million spins, which, using Spotify’s benchmark per-stream rate, would be worth about two million dollars to the rights holders." http://www.newyorker.com/magazine/2014/11/24/revenue-streams
But it's not perfect model for every artist out there.