Billy Bragg: “Blaming Spotify Is Like Blaming the Walkman In the 80s…”

Spotify = Walkman.  Problem = Major Labels.  Any Questions?

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52 Responses

  1. GGG

    Kind of a dumb comparison, but I thought the notion of labels hoarding an incongruent amount of streaming income was pretty obvious. See: Daft Punk (allegedly) getting $13K from 100M+ streams of Get Lucky.

    Reply
    • Guile

      The comparison is a little off base, however his point about the industry not adjusting it’s infrastructure or deals to accommodate new platforms and media is spot on. Contracts literally had breakage fees for DIGITAL built into them…many still do, and they will remain hoping that someone’s lawyer will not pick that up…or they won’t have a lawyer look over it.

      Until streaming eclipses Downloads as the prominent delivery medium, the Majors will always be able to hold spotify hostage by simply increasing licensing fees, Spotify is an interactive service with no statutory rate (outside of their radio service). The labels will likely have both ways though, because this is not a race towards sustainability, this is a race towards IPO, and the cashing out after said IPO.

      Unlike Daniel EK who will be more or less tied to his stock options for years to stay the course, the labels will be able to cash out their equity stake much sooner. We need only look at so many people’s dumping of Live Nation stock…both on the internal side and upper tier hedge funds to see what a potential future may look like.

      Reply
    • With Respect To Billy Bragg

      No one is against Spotify or streaming music in the larger sense Billy… they are FOR FAIR COMPENSATION to artists without whom Spotify could not exist. To marginalize artists need to be fairly compensated seems silly, sorry. Love you Billy, but you’re wrong or misinformed on this one.

      Reply
    • GGG

      What point is that? How much should an artist get for a stream, in your opinion? Realistically, that is. Obviously I’d love to see like a quarter a play, too, but let’s be real here.

      I don’t think it’s unreasonable we’ll see a penny+ per stream once (if) subscribers hit a certain high level. But even if streamers paid out 10 cents a stream, labels are still going to take a huge chunk. Major labels must be loving how Spotify has redirected people’s anger.

      Reply
      • Erik P

        Do you really believe that if it weren’t for those pesky major labels, who pump millions into their roster btw, Spotify & the like would be paying artists more? Streaming is an unsustainable business. We’re dealing w/ pennies here. The only reason the major labels like streaming services is because they have regained control of their catalog (sort of), because they don’t make all that much from streaming either; at least according to everything I’ve seen.

        Reply
        • GGG

          His, and my, point isn’t that Spotify would be paying more, it’s that labels are still calculating royalties for streaming monies with the same ideas they calculate mechanicals with. It’s also no secret majors have money tied into Spotify. I’m sure they did, and continue to do, their due diligence. From things I’ve seen, including on this site, majors are already getting close to a penny a play. So yes, it is pennies, but we’re already seeing major label artists hitting 100M+ listens with at most 40M active subscribers. Imagine if that was 40M paid. Imagine if it was 100M paid. Hit tracks would be hitting a billion plays. The point Billy is making, that I agree with, is that the industry is only hurting itself keeping people away from a paying service. I have no problem with people complaining about the rates, but the idea is that as users go up, payouts go up. And if they don’t go up or don’t go up as much as we think they should, we continue to fight. But keeping people away from the service is not helping anything.

          Reply
          • Erik P

            And my point is that it’s unsustainable. There’s not enough pennies to go around. As far as monetization goes, digital is a waste of time.

          • MY CAPS KEY IS STUCK SORRY

            NO SHIT. MAKING MONEY FROM MUSIC HAS ALWAYS BEEN GENERALLY UNSUSTAINABLE. IT’S A FUCKING LOTTO, NOT A CAREER FIELD. FOR EVERY MILLIONAIRE ROCKSTAR THERE ARE TENS OF THOUSANDS OF BROKE FUCKERS WHO CAN’T BEAT MINIMUM WAGE. IT’S ALWAYS BEEN LIKE THIS, DIGITAL JUST MADE IT SOMEWHAT WORSE. THAT’S WHY YOUR PARENTS WANTED YOU TO GO TO COLLEGE INSTEAD OF ROCKING IT OUT WITH YOUR BUDDIES.

  2. TuneHUnter

    I totally agree with Billy – there is nothing wrong with streaming.

    The problem is in free discovery and in free avalanche of similar tunes you get as a user of any streaming service. Just those two events prevent any normal monetization and make streamers better to consumer than Napster ever been.

    Conversion of all discovery services and tune suggest services to cash registers is our only route to profits.

    It will make streamers, radio stations (both internet and terrestrial) and any public broadcaster (even elevator music supplier) profitable music merchant. They will find the best tunes on YouTube or directly from musicians and serve them anywhere they can THEN Shazam will transfer them to music lover and collect cash.

    All we need is custom and translucent license plate for each tune in the air for Shazam boy to know where to send the cash with monthly statement.
    I mean cash to artist, the writer, the label (if there is one) and radio! (YES, RADIO) …and Mc Donald …and Starbucks!

    If we implement it, Starbucks can actually become micro-label profiting on global success of the tune together with artist they have promoted.

    Time for Discovery Moment Monetization.

    Reply
  3. Locke

    Im not usually this harsh, but Im sorry Mr. Bragg, you’ve got your head up your ass. Just because people keep signing up, does NOT ever fucking mean it must be good. Amway still has people signing up hourly. Cheap piece of shit plastic things keep selling even though they break on contact. Dead people still file tax returns, more and more zombies everyday are utilizing our wonderful system right? Every day I watch people eat trans fat after trans fat with their fries, so it must be good right? If the fucking herd jumps off a bridge, the fact still fucking stands, why are more and more sheep jumping off the bridge? It must be working!

    The labels taking such a big cut has always been a problem, this isn’t news on any leg. Miles Davis never saw a penny from “Kind of Blue”, he signed all the rights away and just wanted the cash upfront. The service that Spotify provides IS NOT NEEDED FOR ANY MUSICIAN! It does not magically give you more fans or listeners. It makes you accessible to your already established fanbase. Why the fuck does anyone think an artist is entitled to less than 10% of a cut for music they wrote, performed, recorded, and produced all on their own? No label involvement still gives you a shitty payout, considering I can stream my own music on my own website, then host one ad, and get the 10 cents a stream for hosting an ad, all WITHOUT giving any of my cut to Spotify.

    Reply
    • Radio and Records Vet

      Sounds to me by your statement “…considering I can stream my own music on my own website, then host one ad, and get the 10 cents a stream for hosting an ad, all WITHOUT giving any of my cut to Spotify.” that you don’t understand the game. Seriously. I’m not being mean or trying to pick on you.

      I encourage every single artist I consult – none of whom are national or international – to sign up and put their music in every available nook and cranny they can find.

      What we call a conversion rate in this business we called a closing ratio in sales. The premise is simple 100 presentations = 10 sales = 10% closing or conversion factor. I’ve studied DIY artist accounting records for the past 13 years now (well, those who maintain such things). The money in the game is not online – it’s offline IMO.

      Radio royalties go to songwriters. So sign up for BMI. Digital streaming royalties from ALL sources, including terrestrial radio that streams go to the songwriter, the owner of the recording, and the players on the record – by SoundExchange – so sign up. This will provide nickles and dimes. The dollars are in the “tickets.”

      Billy Bragg is quite right in his comparison. It’s not relevant to some of our younger folk here, but for those of us old enough to remember the drama over cassettes – it’s more or less the same.

      If you’re not making money – don’t blame the cards or the game.

      Reply
      • Locke

        About the game I “don’t understand”:
        A typical rate for ad hosting is about 0.50-$1 per 1000 page views
        At 1000 Spotify listens you’ve made a total of 0.29 cents.

        Explain to me about the conversion rate again, about how Spotify somehow gives me presentations so I can make 10% of those a sale. last I checked, they HOST your music not PROMOTE it.
        If I want those 100 presentations, Spotify doesn’t help acquire them, they host them on a website that isn’t even recognized statistically as one of the ways people listen to music (Youtube and FM Radio topped in at the top platforms for music hosting). The best part is that ads are a major source of income for Spotify, they know it and that’s why they host ads. Hosting music is what gives them the traffic.

        Spotify just makes you accessible to your ALREADY ESTABLISHED FANBASE. You are letting your fanbase give Spotify traffic to listen to your music. A band that can build it’s own fanbase does not and will not ever need Spotify, it’s pointless, it’s a medium that does something you can already do.

        Here’s a great way to look at your notion of hosting music everywhere you can. Let’s say it take’s you about 30min to put your music up on a webpage. After 1 year you’ve gotten about $30 total in royalties from that site (Arbitrary number). To me, that says, your hourly pay rate is 60 dollars an hour. BUT and here it is BUT you have to constantly maintain and promote those sites as well. So lets say you update it quarterly, at 30min each time. Now you’ve spent 2 hours (all year) to make that 30 bucks, which puts you at 12/hr (Dont forget the initial time spent putting it up there).
        Here’s where it starts to become not worth it. To make 30 bucks on Spotify, you need 103,448 plays.
        How much time do I have to spend advertising Spotify to my fans to reach 103,448 listens? Well if I have to spend more than hours all year advertising Spotify to my fans, heres where the time and dollar go:

        0.5 hours to launch on Spotify
        2 hours to maintain (Updated info, pictures, artist page, etc.)
        x hours to promote
        Im going to set the ideal hourly wage at 8, thats a fair living wage.

        30/(2.5+X)=8
        30=20+8X
        10=8X
        1.25=X

        This means you have 1.25 hours to promote (outside of upkeep and launch) your music to get 103,448 listens before you start to work for less than $8/hr. Even if you divide that by ten (average songs per album) you still need 10k hits per every 4 hours of labor. Even more simply put: For every one hour you spend advertising, you need to reach a minimum of 2,500 listeners.

        Reply
          • jw

            In no world will you ever get 10 cents per stream for hosting your own music. In reality, you’d be lucky to make back your hosting fees each month.

        • TuneHUnter

          You are absolutely correct, Spotify and streaming in general (iRadios too) is a massive race to monetization desert if not Death Valley.
          500 millions streamers (and it will never happen) cannot deliver more than 40 billion a year.
          Inflation adjusted 1999 sales would be today 56 billions – with many more creators and entities to share in new digital pot we are percolating at 16 and taking off to max 25 – 30 billion streaming Eldorado by 2025.

          Digital music has to and is capable to deliver 100 billions! – providing that we monetize at discovery moment.

          Again, we are on the wrong track and the industry is taken over by wrong folks! Now it is up to artists to regain the ownership and real value of their personal property.

          Reply
        • Jay

          Actually, for the rights holder to make 30 bucks on Spotify, it takes about about 6-7000 streams – not 103,448.

          Rerun the math that way and see what happens.

          Reply
          • TuneHunter

            $30 or 3000 cents /6000 gives 1/2 penny per stream.
            I do not think Spotify pays that much and to be fair it should be as follows: no subscription service and 6 streams @ 7 cents each converting you to tune owner @ $.42 or take the ownership outright at $.39.
            Technology is here and it is the only way to deliver adequate cash flow and distribute money to all parties based on actual involvement in creation and distribution.

            As it is we are using and abusing someones property, drifting to unproductive to all industrial swamp and practicing communism!

          • GGG

            Half a penny is pretty common and often on the low end for payouts. Zoe Keating’s post back in the summer showed this and I can corroborate. From artists I work with they have ranged from 3/10ths to 8/10ths. I do certainly agree it should be more uniform toward the higher end, so you won’t get a defense from me there, but at this point half a penny is probably closer to the average than anything. More users and there’s no reason a penny or more can’t happen.

  4. Emily

    Always nice to hear someone talk a bit of sense! The whole argument is so silly to me. One side just so clearly wants for things to go back in time which is so impossible. I do hope musicians smarten up and demand better contracts. I’d prefer to know that when I stream songs through spotify or torch music that the revenue is going to them and not their parasite record labels.

    Reply
  5. jw

    From my math, if you’re signed to a major label getting ~15% per $12 cd, that’s the equivalent of a fan listening to your music for about an hour per day on average for a year on Spotify. 17 streams per day times 365 days at a payout rate of $.00029 is ~$1.80. If you’re getting a lower cut (8%) & your cds are selling at bargain prices ($8), it’s the equivalent of a user streaming to your album every other day for a year. 6 streams per day times 365 days at a payout rate of $.00029 nets ~$.64.

    Of course when you extend the shelf life of an album beyond 1 year, the amount of streams required starts to look a lot more realistic. For instance, if a music fan buys 1 new cd per year on average, at year 8 he or she he has 8 cds, & over the course of year 8 he only needs to listen to any one of those cds between a half hour & an hour (depending on the cost of the cd & the artist’s royalty rates), which is totally realistic. To me, this math indicates that, even with the freemium model, Spotify is not devaluing music at all. In fact, it’s paying out at a relatively fair rate.

    A lawsuit like this could drastically change payout rates, & could potentially make a stream worth much more than the average track listen.

    Stuff like damages need to be corrected for, but I’m much more concerned about clauses that forfeit artists’ rights to revenue generated on the basis of the entire catalog. Labels should have no right to demand up front payments that do not trickle down to artists, or equity in services like Spotify whose profits are inextricably linked to artists’ songs.

    Reply
    • Yves Villeneuve

      Average listens per song ever listened to is 75. Go from there. True market value of a song purchase is roughly $1. Therefore true value of a stream is closer to a penny. Label and artist each take their cut from that penny. Not everyone is a music nerd reaching into their music library every day or second day. Spotify’s average rate per stream devalues music, period.

      Reply
        • jw

          Look, Yves. Here’s the reality of the situation.

          Packaged & even individual track sales have particular value to artists of your stature (which is to say artists with very little if any popularity). One way to look at it is that when a consumer pays, say, $.99 for an individual track, they’re paying for a certain # of plays up front. A lot of songs will never “recoup,” to which the artist is the beneficiary. Based on Spotify’s payout, I’m estimating a recoup at ~350 plays (using medium parameters… 11.5% per record sale (based on a scale of 8-15%), $10 per sale (based on a scale of $8-12), 12 tracks per record, $0.00029 payout rate), or about once per day over the course of a year. A thousand hobbyists could be recording shitty albums right now (for all I know you could be tracking at this very moment), who may release potentially 12,000 shitty songs onto the market tomorrow, all of which might be downloaded & listened to once & never again, dramatically skewing your average listens statistic. With streaming, all of the sudden a track’s true value is exposed, & those tracks that aren’t going to “recoup” are going to pay out accordingly.

          For artists whose songs will never “recoup,” their songs aren’t devalued, their value is simply corrected. You’re wrong to assume the value of a song is $1 & work backwards from there. The truth is that your song may be worth $.12 & a Coldplay song may be worth $3. There are pros & cons to this system, but historically when the revenue generated by superstar acts goes up, that trickles down to smaller acts in the form of recording advances, & a&r guys get a little more leeway in which acts they can sign, which is a good thing. Yes, it eliminates the up front revenue for younger acts, but the availability of the music acts as a lubrication for growing their fanbase.

          I’m going to go out on a limb & guess that your figure also accounts for songs that were downloaded & were never paid for. You’re wrong there, also. The value of a play has to be accounted for relative to dollars spent or revenue generated (by advertisements).

          The phenomenon here is that artists whose fans pay more, but listen less (i.e. songs that don’t recoup) are better off focusing on downloads or cd sales, but they ultimately don’t belong in this conversation. So you’re completely right to stay off of Spotify, Pandora, etc. But for artists with a real fanbase who have fans who listen to their records a few times per week, whose songs have or are going to recoup over time… my method of calculating the value of a listen only applies to these acts. Of course this is further offset in favor of Spotify by discovery plays, & plays by consumers who don’t regularly purchase cds or digital downloads.

          Now, the catch is that Spotify listeners are more apt discover new music… that’s the major appeal of the service. So a music fan is less likely to listen to an artist’s songs repetitively on Spotify. So while the payout per play is fair, the total payout is going to be lower because these plays are spread out over many more artists. Since a given artist is going to be listened to less frequently, the total will be lower relative to the reduced frequency of plays for that particular artist. This means that for recoup rates to match CD or iTunes recoup rates, Spotify’s listenership must grow in proportion to the total number of active music purchasers relative to the amount of discovery that Spotify is enabling, offset, of course, by any changes in payout rate (which will likely only reduce the need for growth, not increase it). Of course at that point the revenue Spotify is generating for the music industry will be increased according to the discovery variable.

          And that is probably the best explanation of the streaming economy that you’re ever going to hear.

          I can break this down into specific scenarios if that will make it easier for you to understand. Just ask.

          Reply
          • DUDE

            I never thought about it that way, but that actually makes a lot of sense

        • jw

          To more clearly address your figures, the number of songs a given track has been played is irrelevant to the value of a play.

          The value of a play is money spent by the consumer divided by all tracks played over a given period of time. If you want to find the value to a particular artist, you factor in his or her percentage of the money spent. For instance, if a consumer spends $12 in a given year & listens to purchased music for 1 hour per day, at 15% the value of each of those plays is $.00029, which happens to be the supposed Spotify payout rate. You can also derive this over a longer period of time… if a consumer spends $12 per year over 8 years, & continues to listen to purchased music at a rate of 1 hour per day, the value per play remains the same, even if he or she is listening to one particular artist more than another.

          Any other determination of the value of a play is flawed.

          Reply
          • jw

            Whoops… the number of times a given track has been played.

            Also, when I say “1 hour per day,” I’m assuming that the average track length is 3.5 minutes, so ~17 tracks per hour.

          • GGG

            Wait, you talk about the average person not being a music nerd then support a listening argument with stats from a small music site almost exclusively used by musicians uploading their own music? Somehow you never cease to amaze me, Yves.

          • Yves Villeneuve

            You shouldn’t assume musicians are music nerds. I would expect most if not all post-secondary trained musicians to be music nerds though.

          • GGG

            Pretty sure a person that takes the time to make music is infinitely more into music than some rando. Your definition of what a music nerd is changes every day. Once again, you are hilarious.

          • Yves Villeneuve

            Music Nerd almost always and very frequently seeks an in-depth listening experience; very selective playlist.

            The casual listener can listen to hours of radio per day and will mostly appear as background music to them; very random playlist.

          • GGG

            Also, I find your digs at educated musicians hilarious. Whatever makes you feel better about your lack of talent, though…

    • Jay

      The $0.00029 per stream figure is just a bogus number. That may be a publishing rate, but it is not what Spotify pays to rights holders. Those rates vary, for paid v. free streams, and vary from country to county. For the rights holder statements I see, the current rates average $0.0053 per stream. Or, rather than just below 3/100ths of a penny per stream, slightly more than 1/2 a penny per stream.

      That’s a pretty significant difference. If folks are going to do math, they should at least use figures that aren’t made of whole cloth.

      Reply
      • jw

        True.

        Payouts vary from artist to artist, I used $.00029 because it’s the most conservative figure thrown around in articles (you’re right that it may be a publishing payout). The parameters are interchangeable, & a more accurate figure skews the #s significantly in Spotify’s favor. Which means a song “recoups” at just 18 plays. Check my math…

        $10 cd times 11.5% artist cut divided by 12 tracks = $0.09583 artist royalty per track.
        $0.09583 divided by a payout rate of $0.0053 per play = 18 plays.

        Reply
        • Yves Villeneuve

          Your math is faulty. The artist would receive 11.5% of 0.0053 assuming that’s his cut. The Spotify rate the label and artist receive combined is 0.0053

          Reply
          • jw

            You’re right, I was wrong to just plug in the new number. If $.0053 is the payout for an independent artist, their cut would be closer to 70% than 11.5%, making the “recoup” number 110 plays, which sounds closer to reality to me.

            Good catch, Yves.

          • Yves Villeneuve

            Actually, 0.0053 or 70% is the label/artist total after Spotify takes its 30% cut.

          • Yves Villeneuve

            Just to be clear, labels sell their CDs for $10 wholesale. If you see a major label CD on a store shelf for $10, the retailer makes zero profit… All the retail money goes to the label/artist.

  6. Radio and Records Vet

    I think my point folks was to focus on where the money is. There’s nickles and dimes in online – there’s dollars offline. If you’re not working 5 or 6 days a week you’re not working. I have clients earning nice average incomes of $28,000 to $40,000 a year by actually working and not worrying about the nickles and dimes.

    Reply
    • GGG

      I think this sort of hits the nail on the head. People don’t want to work 5-6 days a week. They want to record 12 songs, sell 100K copies at $15 and not have to do anything else for two years until they record the next 12 songs.

      Reply
      • TuneHunter

        You are both drifting to proletariat zone!
        Great staff should be rewarded – and is not subject to $14 -$20 hourly wage.
        Unless you want to have North Korean or Iranian style entertainment!

        Reply
        • GGG

          What? I don’t even know what you’re trying to say, but if you mean “great stuff” should be rewarded, yes I 100% agree. That also means medicare/bad stuff shouldn’t, which is why I feel no sympathy for shitty artists not making money. Creating something is not a rare human trait. Cavemen did it. If the simple act of creating art entitled you to money, everyone would be an “artist.”

          Reply
          • TuneHunter

            Great musician cannot be a subject to $14 wage.
            We have to implement Discovery Moment Monetization which will provide speedy flow of good and best staff to the top. Money flow rewarding best folks has to determine what is good.

  7. Denise

    I just think that Spotify isn’t charging enough to the consumer. In the past, we would pay $14.95 for an entire album of our favorite artist. Now for just $9.99 you can stream basically any song you want- hundreds of them–and “share” them with your friends. How is this much different than what Napster did in the past? I think the music selections should be more limiting, similar to the way Netflix has limitations on its programming you can stream for movies. Consumers of today are just getting spoiled to keep listening to music for free (myself included by the way as I use YouTube for my daughter to hear the latest Katy Perry song).

    Charge consumers what the music is really worth and then yes, pay the artists a fairshare.

    Reply
  8. R.P.

    Stop your bitching and create your own spotify as an artist so that whoever wants to listen to your music can stream it and pay you directly… oh wait, CD’s were made for that before, no?

    Ok, ok. So sell your singles and albums online… Oh wait, you already do… Get the idea? No single artist is that interesting by themselves, no matter how much or big of a fanatic you are.

    and, Spotify is going to die when again? Because I put money on it that it will still be here 11/11/14. Anyone wanna bet?

    Reply
  9. Radio and Records Vet

    Charge consumers what the music is really worth and then yes, pay the artists a fair share.

    How much is a single track, listened to one time really worth? And how much is a “fair share?”

    Reply
    • TuneHunter

      Subscribtion at $(zero)
      Then 7 cents per stream with stream number six of the same tune making you an owner @ just $.42
      If you got “chills” on the first encounter convert it to ownership outright @ $.39

      Reply
  10. Ted

    Billy is right. Artists need to look at their labels and existing contracts.
    I would also argue that the plays of a track over a lifetime through Spotify are close to what an artist would receive from a one off download, of not better. Maybe artists need to adjust their expectations.

    Reply
  11. George Johnson

    I’ve never heard of Billy Bragg and now that I know he’s a devout Marxist, nobody cares what he thinks anymore. He lives in a collectivist bubble and he’s probably friends with Sean Parker. Billy Bragg is all about pushing Marxism and he could care less about the rights of the individual songwriters. Like every other music organization, it’s all about progressive politics first and music is just an afterthought. Time to put Spotify and Pandora and all streamers OUT OF BUSINESS till they start paying songwriters and music publishers. To blame a democratic socialist UK music model for heritage artists and not Spotify shows why socialists like Bragg are delusion and dangerous. He can hold all the concerts to feed kids he wants but it’s Billy’s bankrupt collectivist philosophy that he and the rest of Europe has embraced, IS the reason the kids are starving! Every evil dictator in the world was a hardcore collectivist just like Billy Bragg. I’ll side with the supporters of freedom and individual liberty for songwriters, not a nut-job murderer like Karl Marx, which Billy Bragg thinks is a God, unfortunately.

    Reply

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