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Working for a living: to Spotify, or not to Spotify?

July 18, 2011

So it looks as if we finally need to make the decision about whether to jump at the “opportunity” to become “early adaptors” in response to Spotify’s long-awaited arrival in the US.

From a listener’s point of view, it looks like a no-brainer.  For a nominal fee (or less!), you get access to a ginormous selection of music – along with the warm, fuzzy feeling that Spotify is compensating the artists by paying royalties for each stream.

The whole truth, however, is that Spotify pays artists according to a convoluted formula that would bring a wry smile of satisfaction to the face of PT Barnum. Our music has been distributed by Spotify in European countries for over a year and, despite what appears to be an encouraging number of streams, we are still waiting to break that ten-dollar mark.  What we make, based on Spotify’s overly complicated formula, is in the hundredths of cents per stream, and we won’t make ten dollars from them for several years to come.

It’s been reported that Lady Gaga earned just £108 ($167 US) from one million plays of her hit “Poker Face” last year.  Bob Dylan has pulled his catalog from Spotify entirely.  And obviously Lady Gaga and Bob Dylan are at the top of the heap in Spotify’s compensation formula.

Don’t get us wrong – we’re not tarring all digital distribution with the same brush.  We love digital distribution for its effectiveness in helping us reach a larger audience.  Our 8 CDs are available to stream or download from dozens of sources, including Naxos, iTunes, Amazon, Pandora, Rhapsody, Napster, and yes, the European version of Spotify.   We are astonished and delighted to see statistics in the many tens of thousands – from countries we’ve never heard of.

But the occasional income we make from other, more musician-friendly distributors like iTunes and CD Baby actually puts food on the table.  The occasional cumulative penny that trickles in from Spotify makes us question whether the exposure is worth the exploitation.  They’re not technically stealing our music, but they’re certainly not adding any beans to the rice.

Of course, the focus of a streaming service like Spotify is to make music available to a listening audience, and we appreciate that.  But what is not apparent in the ‘brave new world’ of digital distribution of music is that compensation of artists who create the music is factored in even less than previously.  From the perspective of recording artists, Spotify is a con and another nail in the coffin for real working musicians.

  1. If you haven’t followed the link to the article from The Independent (Wednesday, 14 April 2010), the quote below tells all:

    It has been claimed that Lady Gaga, who continues to dominate the streaming charts much as she does the conventional Top 40, earned just $167 (£108) from one million plays of her hit “Poker Face” last year. Others have calculated that for a solo artist to reach the minimum US monthly wage of $1,160 they must have one of their tracks streamed up to 4.5 million times a month, with performers pocketing little more than a tenth of a penny per play.

    And here is more background in another quote from The Guardian 01 February 2011

    Spotify is a great music service for its users and I’m sure most musicians would prefer to be featured on the site. What they don’t want is to be treated as second class. A popular track is a popular track and should be rewarded equally whether it has had the powerful PR machinery of a major label or not. The internet was supposed to liberate artists, giving unsigned artists the same chance of succeeding by cutting out the middleman.

    This is not only a Spotify issue: it is a growing problem for smaller labels and unsigned artists with most new digital music services. In addition, the major labels tend to get upfront payments from new services, which is rarely the case for independent labels.

    If in the future, as many predict, almost all royalties will be distributed not on a set rate per stream or download but on a share of subscription revenue – a share divided according to usage reports from the music services – what are the chances that smaller labels and independent artists will be remunerated correctly?

    If the bigger labels are shareholders in the service, I must say I’m sceptical. Even major-label artists could be shortchanged, as they’re not allowed to know on what basis or what rate they’re paid due to NDAs. Is this really the price music creators must pay for free enterprise?

  2. Another addendum: Isn’t it interesting that Daniel Ek sort of resembles PT Barnum in this photo?

  3. 17 January 2012

    By way of an update, we just received a report indicating that we are now being paid an average of a half-penny per play on Spotify. We must be coming up in the world.

    Ron & Donna

Trackbacks & Pingbacks

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