Streaming, royalties and the question of political intervention

[Airfix]

I think this issue deserves it's own distinct thread.

First off, Tamsin Little OBE, made £12.34 on Spotify over 6 months.

Quote:

It was £12.34 for 6 months, in other words for around 5-6 million streams

https://twitter.com/tasminlittle/sta...23181228036097

Jon Hopkins:

Quote:

Got paid £8 for 90,000 plays. **** spotify.

https://twitter.com/jon_hopkins_/sta...646336?lang=en

Is it fair for musicians to receive so little via streaming ?

[Darat]

Well is it fair for musicians to receive so little via streaming ?

[Airfix]

I don't think it is, I think it's outrageous.

[Darat]

Originally Posted by Airfix

I don't think it is, I think it's outrageous.

Glad we got that answered.

[Lplus]

Originally Posted by Airfix

I think this issue deserves it's own distinct thread.

First off, Tamsin Little OBE, made £12.34 on Spotify over 6 months.

https://twitter.com/tasminlittle/sta...23181228036097

Jon Hopkins:

https://twitter.com/jon_hopkins_/sta...646336?lang=en

Is it fair for musicians to receive so little via streaming ?

Does this contravene the agreement they made when putting their music on the spotify streaming services?

And where does political intervention come into it? Are you suggesting the government should dictate the payment for a stream? Or maybe a Nationalised Music Streaming service?

[3point14]

Originally Posted by Lplus

Does this contravene the agreement they made when putting their music on the spotify streaming services?

And where does political intervention come into it? Are you suggesting the government should dictate the payment for a stream? Or maybe a Nationalised Music Streaming service?

The government dictate the minimum payment for work done in other circumstances. Very different ones, I acknowledge.

As for the agreement they signed, I don't think there are too many other options, all streaming services still charge musicians like the costs of printing discs are still in play.

[Airfix]

Originally Posted by Lplus

Are you suggesting the government should dictate the payment for a stream?

Yes, I am.

[zooterkin]

I've heard some musicians complain about the low returns, others (generally more successful ones) are happy enough. A lot is going to depend on the actual numbers; I don't know the full story behind the tweet linked to in the OP. The other question is, if it weren't for Spotify, would the artists be getting any revenue at all? Are some artists getting a following, and selling CDs, merchandise, and tickets (when concerts are allowed again) because they are getting heard on Spotify when they wouldn't have been heard at all before?

There are other platforms, such as Bandcamp, where more money goes to the artists, but that seems to be mainly a way of selling to an existing audience, not reaching new listeners.

[Brainster]

Are the musicians the original composers of the music or are they "just" the performers? Because musicians historically have never gotten paid when their music plays on the radio or a jukebox, just the composers.

This system may have made sense back in the day, when the performers themselves could make big money selling albums. But that disappeared with MP3 and so they shifted to making it via live concerts until last year.

[Airfix]

Both types exist.

[Darat]

Originally Posted by 3point14

…snip…

As for the agreement they signed, I don't think there are too many other options, all streaming services still charge musicians like the costs of printing discs are still in play.

I well remember a select committee looking into the costs of the music industry and this was when album CDs were 9.99 - 12.99. Couple of “industry” types were answering about costs of CDs. The were claiming it was in the region of £1.00 -£1.50 and then costs of printing inlays etc. At the time I was paying 23p per CD including a single colour inset and jewel case…..

Creative industry - well the costs certainly are!

[Matthew Best]

Originally Posted by Airfix

I think this issue deserves it's own distinct thread.

First off, Tamsin Little OBE, made £12.34 on Spotify over 6 months.

For 5 million streams Spotify would have paid out much more than that - it's just that not much of what they did pay out trickled down to her. It seems unfair to blame Spotify for this. What we don't know from this tweet is what kind of recordings they were, what was her royalty rate from her record company, did they recoup an advance she got paid, was this for performance or publishing, all sorts of information that would make a difference to how outraged I should feel.

[Darat]

Originally Posted by Matthew Best

For 5 million streams Spotify would have paid out much more than that - it's just that not much of what they did pay out trickled down to her. It seems unfair to blame Spotify for this. What we don't know from this tweet is what kind of recordings they were, what was her royalty rate from her record company, did they recoup an advance she got paid, was this for performance or publishing, all sorts of information that would make a difference to how outraged I should feel.

It’s the same as it ever was - “recoup” contracts still abound. The likes of George Micheal and Prince had very public spats over their contracts in later years. (Not saying it’s suspicious - but both are dead now…)

[xjx388]

What is a fair price per stream?

Let's take Drake, who had something like 43 million streams per month in 2019. What should Spotify have to pay per stream to the Drakeholders in the music industry (labels, publishers, writers, performers and Drake himself)?

Obviously, it can't be much more than pennies. Let's start with ten pennies. That's $4.3 million per month just to the Drakeholders? That ain't happening. Turns out it's less than a penny. Spotify pays an average of about .003 cents per stream. At that rate, the Drakeholders would get about $129,000/month or $1,548,00/year.

Keep in mind that the actual rate paid will vary depending on the listener subscription, individual contracts, etc. Drake may get more than .003 cents per stream. He may get a little less from Spotify Free listeners than Spotify Premium listeners.
https://soundcharts.com/blog/music-s...-rates-payouts

You have to remember: This is taking the place of the physical media sales. Spotify, Apple Music, etc are the Sam Goody/Musicland replacement. You can also buy full albums digitally and that revenue stream must be taken into account as well. I do think artists did better financially under the physical media model but the internet broke that model. Touring and merch is where the real money is at, always has been.

As for legislation . . . I think there are much bigger things for legislators to worry about than whether or not artists can make as much money as they used to.

[3point14]

Originally Posted by xjx388

What is a fair price per stream?

Let's take Drake, who had something like 43 million streams per month in 2019. What should Spotify have to pay per stream to the Drakeholders in the music industry (labels, publishers, writers, performers and Drake himself)?

Obviously, it can't be much more than pennies. Let's start with ten pennies. That's $4.3 million per month just to the Drakeholders? That ain't happening. Turns out it's less than a penny. Spotify pays an average of about .003 cents per stream. At that rate, the Drakeholders would get about $129,000/month or $1,548,00/year.

You've picked an artist with some massive numbers there. And there's no reference to how much Spotify are making off the streams, which I think is relevant to the conversation. That's unless we're in 'you get what you grab' territory.

Quote:

Keep in mind that the actual rate paid will vary depending on the listener subscription, individual contracts, etc. Drake may get more than .003 cents per stream. He may get a little less from Spotify Free listeners than Spotify Premium listeners.
https://soundcharts.com/blog/music-s...-rates-payouts

You have to remember: This is taking the place of the physical media sales. Spotify, Apple Music, etc are the Sam Goody/Musicland replacement. You can also buy full albums digitally and that revenue stream must be taken into account as well. I do think artists did better financially under the physical media model but the internet broke that model. Touring and merch is where the real money is at, always has been.

As for legislation . . . I think there are much bigger things for legislators to worry about than whether or not artists can make as much money as they used to.

That would seem to imply that legislators can work on the most important thing and only the most important thing. Barring a few vital issues, the 'there are bigger things than this to worry about' could be applied to anything. It's a very weak argument.

[xjx388]

Originally Posted by 3point14

You've picked an artist with some massive numbers there. And there's no reference to how much Spotify are making off the streams, which I think is relevant to the conversation. That's unless we're in 'you get what you grab' territory.

Impossible to know. What we do know is that Spotify itself hasn’t ever turned a profit.

In any case, I picked Drake precisely because he’s a big artist. And because I could use “Drakeholders.” If the Drakeholders get $129k per month for 43 million streams (I have no idea what Drake himself gets), it puts into perspective the numbers for the much smaller artists. They are getting their cut of the relatively paltry 700k streams they generate per month.

That’s all down to deals with the labels or distribution channels.

Quote:

That would seem to imply that legislators can work on the most important thing and only the most important thing. Barring a few vital issues, the 'there are bigger things than this to worry about' could be applied to anything. It's a very weak argument.

No. What I’m really saying is that whether or not artists should be paid X is not a government issue. Naming streets is literally more important than that.

[Airfix]

Originally Posted by xjx388

Impossible to know. What we do know is that Spotify itself hasn’t ever turned a profit.

https://www.rollingstone.com/music/m...happen-910456/

https://www.theverge.com/2019/2/6/18...eaming-podcast

https://www.theverge.com/2019/10/28/...ble-costs-cuts

https://investors.spotify.com/financ...0/default.aspx

Not true.

Have a read.

Gross profit €575 million

[xjx388]

Originally Posted by Airfix

https://www.rollingstone.com/music/m...happen-910456/

https://www.theverge.com/2019/2/6/18...eaming-podcast

https://www.theverge.com/2019/10/28/...ble-costs-cuts

https://investors.spotify.com/financ...0/default.aspx

Not true.

Have a read.

Gross profit €575 million

Gross Profit is not Net Profit. They’ve had profitable quarters, but not profitable years.

[rdwight]

I mean, it could be worse. Facebook literally charges you to reach your own fans..

[zooterkin]

Conversely, a musician of my acquaintance posted this not long ago:

Quote:

Publishing royalties day today, not big bucks at all but helpful at this time. Germany finally paying up, they do take their time but they get there...
Checked my account at CDBaby.com and quietly impressed by my downloads and streaming! Before CDBaby I had never had a penny from any distributor. The digital age seems to have transformed this kind of accountability

He's a full-time musician, playing somewhat esoteric instruments (mostly mediaeval).

[Matthew Best]

Originally Posted by rdwight

I mean, it could be worse. Facebook literally charges you to reach your own fans..

Well how dare they? Surely you ought to be able to advertise for free?

[3point14]

Originally Posted by Matthew Best

Well how dare they? Surely you ought to be able to advertise for free?

Is it advertising for free? Or distribution for free? Or both? (I honestly don't know)

Either way your point stands. Of course, Facbook do get advertising revenue, so they're not getting nothing from the deal, so are they playing both sides?

[Matthew Best]

Originally Posted by Airfix

https://investors.spotify.com/financ...0/default.aspx

This link shows operating losses of 293 and 73 million Euro in 2020 and 2019 respectively. That's before you take into account finance costs and tax - after those there were net losses of 581 and 186 million Euro.

[Dr. Keith]

Originally Posted by Matthew Best

This link shows operating losses of 293 and 73 million Euro in 2020 and 2019 respectively. That's before you take into account finance costs and tax - after those there were net losses of 581 and 186 million Euro.

Wow, their "profit" really was gross.

[Airfix]

Originally Posted by xjx388

Gross Profit is not Net Profit. They’ve had profitable quarters, but not profitable years.

But what you said was:

Quote:

What we do know is that Spotify itself hasn’t ever turned a profit.

Implying not even a quarter.
Implying not even gross profit.

[rdwight]

Originally Posted by Matthew Best

Well how dare they? Surely you ought to be able to advertise for free?

Well, the content that keeps people interacting on facebook beyond birthdays and casual conversation is what increases time on site, page views and obviously ad views. Setting up a system where people subscribe to content generated, then charging content producers to reach those same subscribers is the way facebook went. Since growing fan bases costs money, it's hard to give up an already established base. At the same time, it's pretty ****** direction. Assume their revenue hasn't taken a hit overall, so I guess good call? Although from a content creator perspective, not exactly the best case scenario.

[xjx388]

Originally Posted by Airfix

But what you said was:

Implying not even a quarter.
Implying not even gross profit.

I meant no such implication. Perhaps I want clear that I meant net profit.

Gross profit is meaningless. Quarterly profit is nice, but essentially meaningless. What’s important, in business, is net profit at the end of the fiscal year.

[Airfix]

Fair enough.

[Wudang]

In the UK there is governement regulation though to what degree this covers money is thus far unclear to me.
https://www.gov.uk/licence-to-play-l...recorded-music

Then drill down through the PRS website
https://www.prsformusic.com/what-we-do

[Delvo]

Originally Posted by xjx388

What is a fair price per stream?

Originally Posted by 3point14

there's no reference to how much Spotify are making off the streams, which I think is relevant to the conversation.

Originally Posted by xjx388

Spotify itself hasn’t ever turned a profit.

Originally Posted by 3point14

The government dictate the minimum payment for work done in other circumstances.

Yes, circumstances in which there is money being made to pay them with.

I've watched this subject be discussed a few times on YouTube as well. There are some people who live on money from their videos and no other job, but the consensus seems to be that it requires a number of subscribers at least in the 6-digit range and diversification into merchandise and Patreon, because of how little YT pays (and YT's last few changes have been toward paying less). And they tend to make around a video per week on average, which keeps the views coming. With a few hundred-thousand subscribers presumably mostly watching each video and a bunch of non-subscribers watching as well, we're talking about people who probably have dozens of millions of views per week. And that wouldn't cut it without Patreon, a separate website where they offer special bonuses for customers who pay them directly for making videos & interacting with their fans, plus channel-brand merchandise. To make it on YT alone, without those side gigs, would require millions of subscribers.

Compare that viewing rate to 90 thousand and 5-6 million of the people complaining in the original post. Of course it's going to make them a fraction of the income; they're getting a fraction of the traffic, on a platform that's smaller and likely to be even farther from profitable. (And YT also, last I heard, had still never profited, but it's supposed to be a business not video philanthropy, so if it's ever going to profit, it needs to start making its terms even worse for the "content creators", which it has been gradually adjusting toward for the last several years.)

Bottom line: free-to-the-audience streaming just isn't a good money source for the creators, because it isn't for the host either. Running the service costs money, and ads annoy audience without bringing in much money for the host because advertizers get so little business from them because people ignore them. Minimum-wage laws would just mean shutting the services down because the money to pay people just isn't there. Creators can resort to Patreon, where patrons can pay them directly regardless of how little money flows through the streaming-&-ads system, but that also has limited money involved because even people who like the idea of directly paying their favorite creators will only pay them so much for so long.

[Brainster]

Originally Posted by Airfix

But what you said was:

Implying not even a quarter.
Implying not even gross profit.

Actually the gross profit shows us something quite interesting. Gross profit is total revenues less cost of goods sold. COGS is the price someone pays for their actual product--essentially the wholesale cost of the item. Note that this does not include any other costs--not the overhead, not the payroll or rent, not the utilities, just the actual price you paid for the item you're selling. Well what is Spotify's actual COGS made up of? Quite obviously it is the payments to the artists/composers, etc. Again, all the other costs come after gross profit.

Spotify had Revenue of $2.168 billion in the 4th quarter, and gross profit of $575 million, meaning their cost of goods sold--payments to artists and composers, remember, were just a hair under $1.6 billion. Put another way, Spotify kept about 26 cents of very dollar of revenue, and paid the other 74 cents to the talent.

[Darat]

“… and paid the other 74 cents to the talent.…”

Doubtful, it will be to the publisher and/or the rights holder - the talent tends to be at the back end of the queue when money starts to be passed along.

[Matthew Best]

But that is hardly Spotify's fault.

And I think more and more the talent, especially the smaller, less successful ones we're mainly talking about, will bypass publishers and record companies and go direct to Spotify, and thus get 90-95% of whatever Spotify pays out, rather than 10% or whatever it currently is.

[theprestige]

Originally Posted by Airfix

Yes, I am.

That sounds obviously fascist.

[theprestige]

Originally Posted by 3point14

You've picked an artist with some massive numbers there. And there's no reference to how much Spotify are making off the streams, which I think is relevant to the conversation. That's unless we're in 'you get what you grab' territory.



That would seem to imply that legislators can work on the most important thing and only the most important thing. Barring a few vital issues, the 'there are bigger things than this to worry about' could be applied to anything. It's a very weak argument.

Exactly. The continuance of mutually profitable economy and commerce is probably the most important thing legislators should be thinking about.

[Lplus]

Originally Posted by theprestige

That sounds obviously fascist.

I was thinking it sounded far more Socialist than Fascist. Note that Airfix snipped my comment about a Nationalised Streaming Service.

That said, if you travel far enough down the socialist trail you end up returning via the fascist route.

It is not the role of government to ensure that an artist can make a living from their art. That said, if the artist cannot make a living from their art and are incapable of doing something by which they can make a living, it behoves the government to ensure they don't starve. The mechanism for ensuring that is welfare, not interfering in the relationship between artist and audience.

[Darat]

Originally Posted by Matthew Best

But that is hardly Spotify's fault.

And I think more and more the talent, especially the smaller, less successful ones we're mainly talking about, will bypass publishers and record companies and go direct to Spotify, and thus get 90-95% of whatever Spotify pays out, rather than 10% or whatever it currently is.

Oh I agree, and it’s always been the case. That is why even hugely successful artists have had to go on strike to get out of their terrible-to-them-contracts they signed whilst they were trying to make it.

Spotify’s funding is the real issue.

[Airfix]

Originally Posted by Lplus

I was thinking it sounded far more Socialist than Fascist.

That was the point, socialism...

And the whole point of my position is to invite debate.

I am not saying I am right.
This is just how I feel.

Originally Posted by Lplus

Note that Airfix snipped my comment about a Nationalised Streaming Service.

I am not in favour of a nationalised streaming service.

Originally Posted by Lplus

It is not the role of government to ensure that an artist can make a living from their art. That said, if the artist cannot make a living from their art and are incapable of doing something by which they can make a living, it behoves the government to ensure they don't starve. The mechanism for ensuring that is welfare, not interfering in the relationship between artist and audience.

Damn right.

[Matthew Best]

Originally Posted by Darat

Spotify’s funding is the real issue.

Since it's the real issue, perhaps you could expand?

[Matthew Best]

Spotify have tried to answer some of their critics, and reveal and explain some of their figures:

https://loudandclear.byspotify.com/

One interesting stat - if your song has 1 million streams, all that means is that it has made it into the top 550,000 songs on Spotify. So although 1 million streams sounds like a lot, it's really not. There may well be literally hundreds of thousands of songs with that many streams that you or I have never heard, or heard OF.