Spotify artists earn $167 per 1 million plays.

http://torrentfreak.com/lady-gaga-earns-slightly-more-from-spotify-than-piracy-091121/

by vaksel • 17 years ago

64 39 17 years ago

patio11• 17 years ago

Is this surprising to anyone? You cannot simultaneously have the price of a good be zero at the margin and yet pay producers non-zero renumeration at the margin.

There is no Internet Economic Fairy that makes it possible to increase consumption of music by a factor of dozens while simultaneously decreasing monthly expenditures on music (relative to CD sales) AND leaving all participants in the system better off.

tumult2• 17 years ago

The only money I've ever made off of music is doing live gigs. Give your music away for almost nothing (or dirt cheap) and then play your own shows.

Record sales as a way to profit probably should never have existed. I would not be surprised if music historians in the future look back on the 20th century record industry as an aberration that existed only in the time when live performances stopped being the singular way to hear music, but creation and distribution of recordings hadn't yet become trivial.

I have no problem with this model. For every musician that hit it big with a record deal and marketing promotion under the rule of the RIAA, a hundred or more went into debt after failing to sell enough records after signing their contract, and a thousand more never even got the contract. I'd much rather be able to work and see my effort pay off in a tangible way than play the lottery.

ewjordan• 17 years ago

The only money I've ever made off of music is doing live gigs. Give your music away for almost nothing (or dirt cheap) and then play your own shows.

This is The Problem for the record industry - there's an almost infinite supply of very talented musicians that are thrilled to do exactly what you suggest. That makes it extremely difficult to buy the argument that we won't have music anymore if people aren't willing to pay for records. It just not true, all we'd lose is heavily produced pop music, and everyone else would continue to play because they really love it. I don't see live gigs drying up as an income source for quite a while, and they are (just barely) enough to let plenty of people play for a living.

I'd add "teach lessons" to that list, too, that's how most of the musicians that I know actually make rent each month; gigs are just beer money if you've got a full roster of students. Learn a few extra instruments, you don't have to be very good to teach most students - I know drummers that teach piano, pianists that teach guitar, etc. To optimize for income, find yourself a nice rich suburb with some cheaper (but still pleasant) areas to live in around it, and teach lessons to the kids in the suburb (you can charge probably 2-3x what you'd get anywhere else, even if you're not one of the best) while living cheap a couple towns over and playing gigs in the city that you're near.

emmett• 17 years ago

The real problem is exactly what you say: decreasing monthly expenditures on music. Increasing usage will depress per-song revenue but per-song revenue is irrelevant; what matters is absolute revenue.

Artists don't (or shouldn't) care about getting non-zero remuneration at the margin; they should care about getting non-zero remuneration in absolute terms.

javery• 17 years ago

The question is what did those listeners do? Did they go buy her album? Did they go buy a concert ticket?

mdemare• 17 years ago

If people listen to twenty tracks a day, this rate amounts to $1 per person per year.

That seems lowish.

apexauk• 17 years ago

yes, but how much would have been paid for the right to broadcast 100 times on a radio station with 10,000 listeners?

it's easy to see artists don't get the same returns from radio as CD sales. spotify and the like are a new medium again - but with more similarities to radio than CDs imho.

Maascamp• 17 years ago

But the difference is that users have control over the music on Spotify. Even with the free version you can listen to a song when you want, as many times as you want. So as long as they're a Spotify member, a user essentially owns the content on there.

With radio it's more of a teaser. You might hear a song you like but you'll have to purchase it if you want to listen to it on repeat.

malloreon• 17 years ago

Can payment agreements like this be used in court during filesharing lawsuits to show that if RIAA members are willing to value music at $167 per million plays there's no reasonable way they can argue that each mp3 someone shares is worth the thousands of dollars they sue people for?

I recognize that these are apples to oranges, but there must be some reasonable conversion. Artist gets X amount per Y plays, and given standard artist % breakdowns that suggests a song has Z value. if Z < W, where W is how much one gets sued for sharing one mp3, then either the RIAA should pay their artists fair value, which would drive more users to pay for music, or they can't sue people for so much per song.

acangiano• 17 years ago

> then either the RIAA should pay their artists fair value, which would drive more users to pay for music, or they can't sue people for so much per song.

The former scares them much more than the latter.

DrJokepu3• 17 years ago

Typically, payment agreements such as this are blanket agreements. Spofiy agrees to give X% of its revenues to the musicians (indirectly) and in exchange it can use their music. This is not a fixed fee as it varies with Spotify's revenues. If Spotify can't get any revenue for a year, the musicians won't get paid at all for that year. RIAA is a recording industry association (dealing with mechanical rights) while the article is about paying composers (which is performing rights) so it's not like "RIAA members" valued these tracks to anything. Also RIAA is American where Spotify is not present at the moment.

tjogin• 17 years ago

Comparatively, if the same song were to be played in a radio show with a million listeners, she'd have earned not even half of what she got from Spotify.

Comparisons with the CD model are misguided, because the CD business model was an exception, made possible only because of technical limitations.

psranga• 17 years ago

"plays" is misleading. Number of listeners would be a better metric. I play songs MANY times.

Assuming each listener played the song 100 times in 5 months (slightly less than once per day), we have 10,000 listeners. $167 for 10K listeners is 1.6 cents per listener (quite low compared to the 10euro/mo Spotify charges). But the number of listeners could easily be lower, if people listen many times to their favourite songs (like me).

ramanujan• 17 years ago

This is only a problem if you think musicians need to be rich and famous.

That is, before feeling bad for artists, remember that the cost of producing and distributing music has also gone way down. A desktop computer with electronic instruments is sufficient to cut a professional quality song.

Artists who produce music will slowly become like bloggers. You will find them through the Internet and recommendation engines, not through MTV, just like you find bloggers through Google rather than the opinion column of the Washington Post or NYT. And just like with opinion, the best stuff will be done by talented amateurs for free (e.g. everyone here can name 100 bloggers better than Maureen Dowd).

Eventually, just like the NYT syndicates some top blogs, so too will the major record labels pick up some Internet artists (Soulja Boy being a leading albeit cacophonous example of said trend). But this is just a stopgap en route to a new future where Google (via search) and Apple (via iTunes) and Amazon (via reviews) are the middlemen and respectively replace the RIAA's promotion, distribution, and quality control functions.

...two other thoughts. First, the role of the composer looks set to return to importance once a database of every possible sond and voice is compiled. There's definitely room for software to produce a "perfect" song entirely from the sheet music + sound/voice synthesis + historical data, without any live voices or instruments at all. For all I know, this is how Trent Reznor already does it.

Second, the analysis above places little weight on the experience of listening to live music. I guess if you are a big fan of concerts, the Internet will kill the (music) video star.

ahlatimer3• 17 years ago

I'd say the internet has done more to support live music than to detract from it. If there was no internet, I may have gone to a few shows here and there when a big name artist came through town, but because of the internet, I listen to a much wider variety of bands and choose to support those artists by going to their concerts.

There's a totally different experience to actually being in a crowd listening to a band. I may have a (near) perfect recording on my computer or iPod, but there are many nuances that you miss out on when you listen to music at home.

From the artist's perspective, there's nothing like playing live. Playing in a studio is worlds apart from playing with your fans right in front of you. I know quite a few artists that love that, myself included.

alex_c2• 17 years ago

To put that in perspective, $167 for 1 million plays is the equivalent of a CPM of $0.16 for an ad-supported web site. A bit on the low side, but $0.16 is in the right ballpark for a site with low-quality traffic.

I think the question is: is there any reason to expect music to be "worth" more than other types of online content?

SapphireSun• 17 years ago

I guess it would depend (like the advertising) on what kind of demographics the population consists of. Pop music, because it is specifically designed to appeal to a broad spectrum of people, would have terribly nonspecific demographics. The weirder the genera, the more specific the audiance (usually), and thus higher "CPM".

Where's the sweet spot? Serving music has got to cost much more than serving a jpg ad, but maybe less than or equal to a flash ad (depending on the song and ad of course). I could very well be wrong about that though.

biznerd• 17 years ago

Flashing "You're the 1,000,000 visitor to this site!" and fake "You have 1 message waiting" 468x60 banner ads pay more than $.16 CPM. Many of these ads appear on low-quality sites where the visitor spends less than a minute on.

Meanwhile, the typical song is longer than 3 minutes. The user also must actively find the artist and seek out the song (rather than say mindlessly clicking a link from Digg because they're bored.)

Comparing a pageview to a song play is not a good analogy.

On a side note, I'm starting to get tired of all the anti-media view on YC. Group-think is very dangerous. There are a lot of insightful comments here but I make myself take everything with a grain of salt because of the social dynamics of the community.

The article mentions that the top artist was Lady Gaga. Why didn't Lady Gaga start self-publishing on Lulu.com? She would have been able to keep ALL her CD and concert revenue. Information wants to be free!

Contrary to the popular belief here, record companies DO add value. Gaga signed with Def Jam at the age of 19 after L.A. Reid heard her (who is responsible for building the careers of Mariah Carey, TLC, OutKast amongst others). She cut her teeth on writing and producing music for established artists before going out on her own.

alex_c2• 17 years ago

I wasn't talking about low-quality sites, I was talking about low-quality (e.g. unfocused, or hard to monetize) traffic.

I don't want to split hairs - yes, obviously, a song is not identical to a page view - but at a very basic level, both songs and web sites are content. They both cost money to produce, promote, and distribute.

My point is that while $0.16 CPM is low, it's the same order of magnitude as other online content. I don't think $1 CPM would be unreasonable, and that's not a huge difference.

Contrary to the popular belief here, record companies DO add value.

I never said they don't. I'm not really sure what that has to do with what I'm saying.

arnorhs• 17 years ago

I can't believe people are still using these terms, like 'making 0 dollars off of pirate bay' -- That's like saying a free newspaper doesn't earn any money from giving the paper away.

It's a argument people often make that are so entwined in the thinking of "selling music" like it was a physical thing...

This kind of thinking needs to stop.

Artists have more ways of making money today then they ever did, because they can do it themselves (and/or hire somebody to do it) - Selling live shows, selling merchendise, selling music in a form that makes it a "collectable", even music for films etc... The possibilities are there, but you need more omph than just standing in the garage bad-mouthing the downloaders while nobody will sign you up...

NikkiA• 17 years ago

selling music in a form that makes it a "collectable"

That's the big one for me. Much of the music I listen to (in the IDM, ambient and electronica genres) is sold in limited run printings now. It's not unheard of for a run of CDs or Vinyl to only amount to <100 physical copies.

Ironically, that seems to make me feel more guilty about pirating the music when it's not available, although I suspect, as you say, it increases the value of owning a physical copy while decreasing the 'damage' done by piracy - I should feel less guilty that I had to download it.

Tichy2• 17 years ago

"Selling live shows, selling merchendise, selling music in a form that makes it a "collectable", even music for films etc..."

Many of which are not really making music, though. What if you simply want to make music? You might as well say "musicians can get paid for doing TV commercials for facial creams" - maybe they can, but I doubt it is what they had in mind when they went into music.

In fact, if I was looking for a cleaning lady, and Bjork as well as some unknown woman would apply, I would probably prefer Bjork. So in that sense "musicians can make money by becoming room cleaners".

ABrandt2• 17 years ago

As much as I would like to not put this so bluntly--that's the free market for you.

"Simply making music" is fine, but that has never exactly put food on the table. The internet isn't destroying the value of music itself, its just altering the industry's viable business model. This is the same line of thinking that we are constantly applying to web apps here on HN. Sure you can make a neat little functional application, and it will take you time and effort to do so, but that doesn't just automatically mean it should pay the bills for you.

Quarrelsome• 17 years ago

^^ downloaded a Tim Minchin show the other day. It was brilliant so I went to see him live the following week.

The ticket cost most than £0.00

ahlatimer3• 17 years ago

I believe they got their numbers wrong for the investments in Spotify from the record labels. I seriously doubt Spotify is valued at around 50,000 euros.

Artists are generally short changed when it comes to this sort of thing, whether it be selling music or streaming it. Artists make the bulk of their money in ticket and merchandise sales. It would be far more interesting to see how much the record companies are making per 1 million plays. It might also be shockingly low, but I somehow doubt that the record companies would sign a deal where they made little more than a few hundred bucks per 1 million plays.

des• 17 years ago

re:their numbers, Spotify's valuation is closer to $1bn. But wired implies the labels got ownership in exchange for advances on future royalties: http://www.wired.com/epicenter/2009/08/ka-shing-spotify-inve...

And I can't find a primary source, but the consensus seems to be that Sony paid 30,000 kroner in cash for their share of Spotify, which jibes with the figures in the OP: http://www.p2pnet.net/story/26736

ahlatimer3• 17 years ago

So it seems that the record labels are more to blame for the low amount that artists are making, which isn't particularly surprising. If the labels did get some amount of ownership for advances on future royalties, the artist would be making significantly less due to the labels not collecting said royalties.

ErrantX• 17 years ago

It'd be interesting to see how much money Spotify earned for those million plays.

I know that's probably a tough number to come up with but if it is $200 or $2000 then we can start to consider things in perspective.

I think everyone here will agree that it is complete FUD the amount of damages the record industry claim from illegal downloads - and that it is apparent some (though again I suspect not as many as people tend to claim) publicity and additional sales is created from illegal downloads.

In this sense perhaps Spotify is almost a loss leader; barely scraping a living on the idea that it's users are more likely to go out and buy an album or go to a concert. If that's the case they need to be more up front about it; otherwise fall outs like this will happen.

Of course it could well be that they are just ripping off artists. who knows.

DrJokepu3• 17 years ago

Let me clear up a few misconceptions here. Is that one million plays worldwide or one million plays in Sweden? The population of Sweden is about 10 million people, I really doubt that a single track accumulated as much as one million plays so quickly.

And if the number is worldwide, why do they expect STIM (Swedish Performing Rights society) to pay for it? Of course they won't, STIM only collects royalties for performances in Sweden! Every country in the world has its own performing rights collection society. For music played in the United Kingdom, she gets paid by PRS, in France it's SACEM etc.

Artists usually don't have the "performing rights" for a music. The person who gets the performing rights royalty payments after a music is the composer. Lady GaGa received that paycheck not as an artist/performer but as the composer of that track (along with Nadir Khayat). She is not the only composer of the track so she only gets her share of the payments. The article has huge factual mistakes.

jasonlbaptiste• 17 years ago

This is an important point and fact that needs to be looked into more. If she only received $167 for her portion of Sweden's 1 million plays, the article is way off. OR does Sweden;s STIM cut the check for the aggregate plays for all nation's since that's spotify's home base?

DrJokepu3• 17 years ago

Well I'd looked it up and apparently international royalty payments for performing rights are collected by the collection society of the composer's home country. So if you reside in the UK and someone listens to your music in Sweden, ultimately you will get your cheque from PRS UK. As far as I know Stefani Germanotta (known as Lady GaGa) resides in the United States which means she must be a member of ASCAP, so I don't really understand how could she get a cheque from STIM at all.

notphilatall• 17 years ago

Did anyone else do a double take on "Sony BMG bought 5.8% of Spotify for 2,935 Euros"? What else did they receive from Sony BMG?

CSunday• 17 years ago

Spotify certainly sounds like a good deal for users and The Labels, but not much for the Artist(s).

let's keep in mind that Spotify is still Europe-only for now, But...

If someone with as much world-wide fame as Lady Gaga could get this much for a million plays, then what about the less known artist(s)?

And who actually gets to see and keep this $167?...RIAA bosses, Label Bosses, or Lady Gaga

Great post BTW!

ABrandt2• 17 years ago

What if you look at those 1 million song plays as advertising. She (or who ever Spotify's agreement is with) actually was paid to advertise her music to 1 million people worldwide.

The article mentions that she sold 4 million records and 20 million paid downloads. Would those numbers be nearly as high if countless people didn't get to try her out through streaming services first?

mattmaroon• 17 years ago

"Douglas Léon, better known as Swedish rapper Dogge Doggelito"

Ah Sweden. Do a Google Images search for Dogge Doggelito and try not to laugh at what passes as a rapper there. That guy makes '90s Vanilla Ice look like Suge Knight.

dsingleton• 17 years ago

Honest question, not addressed by the TF article (and unfortunately I don't speak Swedish for the original);

Is $167 for all Spotify Lady Gaga plays, or those plays made in Sweeden (and thus under the remit of STIM)?

As I understand music licensing Spotify would be required to pay royalties to the collection society relative to the location of the play.

Spotify artists earn $167 per 1 million plays.

Related Stories