In the last two months Thom Yorke, David Byrne and many others have gone public about Spotify's poor payments. Led Zeppelin and the Beatles are largely absent from the site, arguing there's more to be made from back catalogue sales of their bodies of work than the site's streaming royalties.
It's hard to disagree when you look at the numbers. But: we're not in 1985 anymore; in 2013 there’s a new, harsher, musicbiz reality. I don't think there's ever been a fair and equitable payment system for musos. But now? Clear winners, clear losers, and way too many barriers between the two...
1 The old model was broken.Good riddance: it ripped off artists AND buyers something rotten. For well over a century (Columbia was founded in 1888), record companies have given lousy deals to artists
(read this Don Fardon post, for example). Until their hands were forced, they happily pushed CD prices to £15 or more. They routinely manipulated the charts to gain airplay and generate sales. I could give you dozens of examples, but you only have to look hard at some of the inexplicably awful stuff that made it to number 1 back in the day to see a few obvious patterns. That manipulation’s still going on, but it’s subtler now.
When did you last buy an album? Many’s the time I’ve gone in to a shop – except now it’s more likely to be Amazon - and forked out for a shiny new CD. Took it home, listened… and found maybe three tracks I liked. The album model was based on trust in the artist and after too many fillers, that trust has been eroded. By the record companies.
2 Spotify didn’t destroy the record industry. Piracy did.Everyone says it's the likes of Spotify that's killing the industry, but Spotify is an improvement in many ways. Napster,
3 Spotify is really convenient. That doesn't help everyone.
Spotify got traction because their delivery is quick, easy and convenient, and comes on any platform you like. We’re used to free fast stuff on the web. Spotify is fast, virtually free, and portable. Even the paid-for mobile phone model is vastly cheaper than buying albums. And you can cherry-pick.
The other day I watched a club DJ firing in stuff from Spotify on his laptop. It saved him carting the world’s largest record library along. Convenience is great: you can check out a new album, you can play that song you really like.
But that only works for stuff that's had tons of publicity. Here's a fresh screengrab. It's what I saw when I opened Spotify: The Cure, the Vamps (hey, at least one of them is new, young and local), the Stones and Jason Derulo. Big names.
4 Streaming royalty rates are low. Really low.
In a scorching Guardian piece, David Byrne says
"The amounts (streaming) services pay per stream is miniscule – their idea being that if enough people use the service those tiny grains of sand will pile up. Domination and ubiquity are therefore to be encouraged. We should readjust our values because in the web-based world we are told that monopoly is good for us. The major record labels usually siphon off most of this income, and then they dribble about 15-20% of what's left down to their artists. "No punches pulled there. This is compounded by this amazing graphic – which tells you
that Spotify might just pay you $0.00029 (that’s about 1/35th of a cent) for each play. And note too that your record company gets $0.0016 per play – 1/6th of a cent. Note that this isn't comparable to sales royalties.
5 Spotify doesn’t help you find new stuff. Not really.
No, the only way to get around their gazillion song database to find new music is to let
yourself be led. I’ve never gone for following other playlists – and I’m sure I’m not alone.
6 The model works great for established artists.Spotify is a great model for the likes of U2, who get money for their daily quarter of a million streams. That’s long-term earning power. In fact, it’s really good for them, because it's extra money: many people will own albums - making U2 big money - but simply can’t be bothered to dig them out, and so will stream them instead. Hello, secondary revenue stream.
7 So is there any way it can help you become an established artist?
8 If you’re not established, Spotify exposure will COST you.Spotify say:
“Having new music from independent artists is important to us, so we work with artist-aggregators to get their content uploaded.”Lovely! Actually, not it’s not. They post a list of third-part aggregators, who will market your stuff through their sites, Amazon and the like. Some offer very limited low-cost or free options to get your music up; most don’t.
CDBaby are one of the most reputable sites. Their deal is:
Now, that’s not impossible, but if you were capable of getting that many plays, I suggest you’d
already be a long way further down the road. If you sold seven or eight CDs at a gig, you’d have made more than you paid out for a CDBaby upload.
Commerce on the web is brutal. It’s a seller's market that's killed bookshops, record shops and independent retailers. It’s cut income across a whole swathe of freelance areas. Spotify and their ilk may be the main game in town, but looking at it from a revenue-earning perspective, it's bleak. The model works for the big boys, and the big boys only.If you’re smaller, it really looks like you need to go the direct route. Play a gig, be great, and if you’re lucky, make extra money from CD sales.
I’ve written recently about Urban Folk Quartet, and less recently about George Barnett, who have both achieved much by going directly to their fan base, live and online. That’s – maybe - a sustainable model providing you can keep a handle on it all. I'm going to try to explore this in the coming months. What I’d really like to know next is – how do you jump from here to there, without giving it all away? Of course, if I knew that, I wouldn't be writing this blog.
Thom Yorke calls Spotify 'the last desperate fart of a dying corpse'
David Byrne: 'the internet will suck all creative content out of the world':
Information is beautiful: how much do artists earn online?
More music business posts on Radio To Go
Subscribe to the mailing list!
* required field
* required field