200+ Labels Withdraw Their Music From Spotify: Are Its Fortunes Unravelling?

http://www.wired.com/epicenter/2011/11/200-labels-withdraw-their-music-from-spotify-are-its-fortunes-unravelling/

by glymor • 15 years ago

50 53 15 years ago

wired.com

AndrewDucker4• 15 years ago

I'd love to know whether Spotify was generally causing an increase or a decrease in the amount spent on music.

I'm currently spending £120/year on music that I wasn't spending before, but I'm aware that I might not be normal.

waterlesscloud3• 15 years ago

What matters is how much of that spending is making it back to the rights holders. Is that amount increased or decreased via spotify?

AndrewDucker4• 15 years ago

My understanding is that it pays a similar amount to airplay - and that if I want a band to make the same amount they would have made from me buying their album then I need to listen to it about 100 times.

Which, for albums I love, tends to happen. Rubbish albums full of fillers, on the other hand...

AndrewDucker4• 15 years ago

Some good figures here: http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-...

maxjaderberg• 15 years ago

This is a good infographic on that http://www.informationisbeautiful.net/2010/how-much-do-music...

gizzlon2• 15 years ago

"What matters is how much of that spending is making it back to the rights holders."

Rights holders or artists? It's not like the artists receive a lot for each CD sale.

I'm not saying the music industry can't provide a valuable service, but if there where any real competition they would be out of business a long time ago. IMHO, it might be better for "music" if they all went bust.

gizzlon2• 15 years ago

I have been a premium subscriber for about a year, and for me it has gone up.

I buy even less music now.. but I spend more on music.

matwood3• 15 years ago

I'm the same as you. I occasionally bought an album from the Amazon $5 deals, but even then I would often fill my cart, not feel it's worth it and then skip buying. With spotify $10/month feels like a good deal for a good product. If labels want to pull all their music then I'll go back to listening to my catalog of stuff I already own and not spending money at all.

freehunter2• 15 years ago

I don't use Spotify, I use Zune Pass (it was available in the US long before Spotify was), but when I got a Zune, I moved from pirating _everything_ to never pirating music. I've been a Zune Pass subscriber for three years now and have discovered tons of new music I hadn't heard before. On some artists I've found I'll go out and buy the album on vinyl so I have it at home but that's a very rare occurrence.

Just an anecdote from some random guy on the Internet, but when done right and with good integration, music subscriptions can be a great thing for the user _and_ the industry.

ticks• 15 years ago

Only music I have bought in recent years is bands that aren't on the streaming services, like RHCP or Metallica. As a user these streaming services are a nice free alternative to buying music, but if I were a band with a well known brand (i.e. lots of money has been pumped into it over years/decades), then I would avoid streaming services like the plague.

Services like emusic are better for labels because they at least treat the music as something special and limited.

waterlesscloud3• 15 years ago

I have a strong suspicion that these particular "labels" mostly have 1 artist on them.

JonnieCache5• 15 years ago

This is not the case. They are admittedly all UK-based underground electronic music labels, so perhaps not the end of the world for spotify, but it isn't something they can ignore. STholdings has been a successful distributer for many years, it underpins the UK scene. Others are sure to be watching.

jopt• 15 years ago

If anything, it's more worrying for Spotify that these labels are all closely related by genre. This leaves a gaping hole in that specific genre, which is harder to ignore than a few artists here or there.

JonnieCache5• 15 years ago

When I read this I was not expecting it to be STholdings! That's about half of my favorite new music right there. Glad I didn't buy a subscription now.

mvkel2• 15 years ago

Oof. The sole reason I have a Spotify subscription is for its vast dubstep catalog. Checking out my "favorites" playlist today, I hope I don't see half of them gone!

mvkel2• 15 years ago

Yep. Lots of stuff gone. Joker, Mount Kimbie, Luke Vibert, Distance. Huge names, gone.

This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can.

It has nothing to do with Spotify remaining solvent.

gcp2• 15 years ago

This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can.

Without a middleman, it's going to be a pain to subscribe to multiple labels. It would require vast improvements in protocols/infrastructure in an industry that's extremely slow moving.

matwood3• 15 years ago

Unless you are dealing with the artist directly, you are always dealing with a middle man. Make no mistake, the current distributors would love nothing more than the ability to cancel rights on any music you already think you own. There is some exec right now looking at video games that phone home before each play and thinking he wants to make that work with the music his company distributes.

philwelch• 15 years ago

"because it turns a service that has everything into a service that has “most stuff”"

Spotify already was a service that has "most stuff"--it was never a challenge to find holes in their catalog.

And judging from the ads that the free version of Spotify plays for me, either their entire userbase is really into country, or their advertising is more intended to badger me into buying a subscription so albums I actually like aren't interrupted by country music every 2-3 tracks.

nicwest• 15 years ago

... has “most stuff” — that’s a life-and-death difference to a hardcore music fan

as you say, spotify's lacking catalogue is not news.

I would be interested to know however if hardcore music fan's makes up the majority (or a significant minority) of spotify's user base. As such is this truely a life-and-death difference to spotify as a whole.

mbesto• 15 years ago

Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity.

Interesting quote. Is music production being exploited as a low value commodity, or is it in reality a low-value commodity? With the insane amount of music that is available I personally feel like it's the latter, and the reverse exploitation of publishers/distributors has gone on for too long.

JonnieCache5• 15 years ago

The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. This will strongly affect their decisions about selling/marketing it, in ways that will likely appear irrational in the light of cold economic analysis.

Those who manage to understand this "passion" factor and work it correctly into their business models are the ones that will make the post-piracy music industry work for them.

A simple example of this is the sale of super-deluxe limited edition box set versions of albums for $200 which we've been seeing over the last couple of years.

dpark• 15 years ago

>The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it.

Passion doesn't change the economic facts. Painters pour their hearts and souls into their works as well. That doesn't mean that they can realistically sell at a high price. Most painters are broke, and most of the art people own are cheap reproductions from places like Pier 1 or Art.com. And most people still own relatively few reproductions.

The question for musicians should be how can they maximize revenue, not price. Unless they want to live in a world where albums are purchased liked paintings: rarely and only by a small market.

Duff• 15 years ago

I think that you're right. Given the back catalog of millions of songs, the only music that isn't a low-value commodity is new/emerging stuff that happens to be a sub-genre of it's own.

Even quality independent bands with followings aren't really making money on music -- they are selling performances and swag.

freehunter2• 15 years ago

Popular music is on the radio to be listened to for free. Popular music is, by definition, a low value commodity. Progressive (maybe "independent") music can have a higher value, but will have a lower install base. If music is meant to be widely distributed, it IS a commodity. There is rare/special music that people are willing to pay a huge amount for, but not a huge amount of people would do so.

Wide distribution at a low cost, or high cost with a low install base. Those are the options. I think putting a record in Wal-Mart or on the radio causes it to lose its specialness. "Special" is not what popular music is about.

Fliko• 15 years ago

I think that if the music loses any of it's value to the consumer by being on Spotify, it is that a 'good' artist's music is just as available as a 'bad' artist's music, and all at a small flat fee. This is most likely debatable though as it's hard to measure things like this.

Don't get me wrong, I also think that music is a lower $$$ commodity than most people think but that is easily side stepped by bands having a wide variety of cheap products to offer (merch, live shows, dvds of live shows etc.). I think a large part of this is due to the economy of today but I don't have much basis for that.

I have mad respect for Sean Parker, but when he said "I don't think we're ever going to get it completely right, the world is changing so quickly that it's very hard to get anything right for long.", I think he was wrong. Him and Spotify focus too much on changing the whole music industry, and they focus too much on the music listener instead of the actual artist.

Spotify removes a lot of the personal ownership of music (not buying albums and owning them even if it is digitally), and that is an important bonding experience between an artist and their fans.

More importantly Spotify offers terrible royalty, Lady Gaga made $167 off 1m plays of Poker Face. Word on the street (aka indie label gossiping) is that Lady Gaga pulls in more money because she is on a major label. I don't think Spotify can afford to pay more royalty because of the large volume of artists they deal with, and that sets them into a huge bind.

Spotify has preached about how they care about the indie artist/label, but they are really just enforcing the major label and this is pushing against the huge movement with removing the middle man and getting your music out directly to the fans so you get 90% of the album sale instead of 5%.

Companies like Topspin Media, Bandcamp, and more recently TuneCore may become a much bigger player with their recent steps in becoming more appealing for the artist.

These other services are all convenient for the consumer and offer more for the artist then Spotify will ever offer. The reason you focus on the artist more than you focus on the consumer is because the consumer is willing to bend to the will of the artists as long as what they provide has a good price tag and is easy to obtain.

RyanMcGreal• 15 years ago

Good music is no longer a scarce commodity. If I was a working musician, I'd be working on honing my live performance, since a really good live show is still by its nature a scarce commodity and hence a source of value.

jamesbritt• 15 years ago

However, if you're a working composer who relies on a studio setup to build up a final product you don't really have that option.

gcp2• 15 years ago

This is a gamble that can turn both ways; what these labels/artists now risk is that they basically no longer exist, or are no longer discoverable, for a large portion of listeners.

rdtsc• 15 years ago

The could also be thinking of building an in-house product similar to Spotify.

Every label is probably thinking, "we can pay some web dev to build us this". Well, I hope they all do and see what happens.

waldr• 15 years ago

I wonder how many new fans those artists got from being on spotify, how many people then paid to see them live and recommended them to their friends. It's difficult to put a price on that.

cjstewart88• 15 years ago

IMO Spotify is overrated, www.tubalr.com is where its at.

bookwormAT• 15 years ago

If more gaps in Spotify's library really makes people purchase albums again?

I know it makes me switch to Grooveshark.

akmiller• 15 years ago

more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio.

Somewhat sensationalist headline trying to make it sound like it's Spotify that's losing these labels when in reality it's the labels opting out of ALL subscription based music services. Not to say that it's not a huge problem but there is no need to single out Spotify in the title.

betterth• 15 years ago

Also, it's a bunch of small time techno labels, and not a single major label is a part of the enormous sounding "200 labels".

eyko• 15 years ago

Scumbag STHoldings. Withdraws music from Spotify. Available in Soundcloud.

JonnieCache5• 15 years ago

They only publish clips to soundcloud.

Also, it's their music, they can do whatever they want with it.

ssharp• 15 years ago

If someone is going to solve the music problem, the business model should be as focused on addressing the concerns of labels and artists as it is on consumers. If the middleman is making customers happy, and artist/labels feel like their getting an equitable fee, lock-in will happen and it will become a strategic disadvantage to leave.

It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. If we only look at the consumer end, we're bound to end up with lots of models that don't interest labels and artists, and ultimately will not satisfy customers either. If the ultimate destination is a world where we largely marginalize labels (which seems to be something a lot of people advocate as it will push costs down), then does Spotify get us any closer to that goal? Not as it stands now.

JonLim• 15 years ago

> It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem.

I think the gaming industry is good proof that this DOES work. Steam (and Gabe Newell) basically came out to say that making it super easy and convenient for customers basically made it easier to purchase from Steam rather than pirate. (Myself included.)

The consumer end, especially for media like music or gaming, is probably the most important for business considerations, in my opinion.

fauldsh• 15 years ago

This is truly the big problem with Spotify. They're completely at the mercy of the big labels/distributors, who aren't receiving enough money for Spotify to matter to them that much. Whereas Spotify completely cannot afford for labels to pull their music.

The problem is beyond sheer numbers of subscribers as well, Spotify needs people to listen to less, so that the money generated per song play increases and makes them a more attractive distribution medium. Radio stations do this by having DJ's talk lots between songs and varying the popularity of the songs they play, so they don't play too many new and expensive songs. The only tool Spotify has to alter the revenue per song play is changing the subscription price.

200+ Labels Withdraw Their Music From Spotify: Are Its Fortunes Unravelling?

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