Ed Sheeran Defends Spotify…

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From Ed Sheeran’s recent appearance at the Amazon London offices, while promoting his new album ‘X’. Transcribed by The Guardian.

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This album was streamed 26 million times in the first week on Spotify, and that means 26 million people have heard my album… That means a tenth of them might consider buying a ticket or going to a festival, and that’s enough for me to tour very comfortably…

I know a lot of artists are a bit iffy about it, and to be honest, I did get a royalty cheque from Spotify that was about £4… It’s one of those things, but for me, the more iPods, phones and computers that I’m on, the better, because I just want to play. That’s what I enjoy.
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53 Responses

  1. Anonymous

    “I did get a royalty cheque from Spotify that was about £4”

    For 26 million streams? And you enjoyed that? 🙂

    So, I guess it’s some fancy new sexual fetish, right? Does it have a name yet?

    Reply
    • Good for you Ed

      Good for you Ed, you don’t mind being taken advantage of – other people do.

      Reply
    • GGG

      Please tell me you’re smart enough to know that Spotify didn’t pay £4 for 26M streams. Please, or may god have mercy on your soul…

      Reply
      • Anonymous

        I just respond to the information provided in the story, I don’t make it up.

        I also don’t mock him for his sexuality. Whatever floats your boat. I’m just puzzled: Was it something in his childhood? Father issues? Abuse?

        We’ll never know…

        Reply
  2. Sam Page

    26 million Spotify streams at half a cent per stream (roughly the average) is $130,000. And he got 4 pounds. #supwitdat?

    Reply
    • Stu

      I think the chronology is more like:

      – Ed once got a £4 cheque for Spotify streams very early on in his career

      – Ed’s two albums have since done more than 868m streams on Spotify – that’s later in the original story – which would be a payout of more than $6.2m to his label and publisher (insert speculation here about what percentage makes its way through to him)

      – He has sold shitloads of albums, and he’s playing arenas, with a show that’s just him and a guitar.

      I suspect he’s not worrying about possible missed sales from streaming…

      Reply
  3. GGG

    You should probably also mention that his album, which was released the same time as it was put on Spotify, debuted at number 1 in the US with 210K sales.

    Reply
    • Anonymous

      Guess he won’t miss the couple of million sales he missed because of streaming, then.

      Reply
      • The Truth

        Yes! GGG says that artists should take what’s given them and shut up! How dare they question their overlords?! No one would care about any musician without Spotify!! I stand with you, GGG!

        Reply
          • Lynch

            Don’t even engage some of these comments man. For the last couple years that I’ve been lurking the comment section here, I can safely say you’re one of the few who actually “get it”. Keep on keeping on, just make sure to come back and say “I told you so” to these guys in another few years.

      • GGG

        Beyonce, who utilized this the best, sold a million by staying off. So at the absolute most he lost out of 800K sales. But looking at Facebook as an arbitrary metric, he’s got 8M fans to Beyonces 65M. So there’s no way in hell he was going to match even a quarter of that. Even Coldplay, who has 37M only old 100K more first week.

        Basically, you are severely overestimating how many records he was going to sell.

        Reply
        • Anonymous

          Let’s face it, GGG: Nobody knows how much money Mr. Sheeran lost because of streaming. And he doesn’t seem to care, so it’s not an issue.

          But he’s not like most people. Most people want to make as much money as possible. And you don’t do that by giving your music away during release.

          Like I said: Streaming revenues from release week 1 and 2 — the most critical period — are almost non-existent. Even pro-streamers accept that. It’s all about the long tail, they say.

          So what do you have to lose from windowing during week 1 and 2?

          Nothing. You can get tons of free, non-cannibalizing exposure elsewhere. But you have a lot to gain…

          Reply
          • GGG

            Yes, we’ve had this conversation and are more or less on the same page.

            What I dislike is that we can’t have a rational discussion about streaming because people exaggerate everything for no reason other than to shit on streaming. Or they are just ill informed. That anonymous probably legitimately thinks streaming led to “the couple of million sales he missed…” when simply looking at other artists for 10 seconds can all but prove that wouldn’t be the case.

  4. yep

    If an artist sees 868m streams on Spotify, then they generally have the backing of a label so they end up with about $800 K, assuming Ed has what is considered a normal deal with his label.

    The Aphex Twin record has already done over 3m streams in a couple of weeks (on ‘Warp’, an independent label) So, if the streaming continues at that rate (I cannot think why it wouldn’t…it may increase?) In the first 12 months this release will generate something $ 700 and 800 K

    Now, that is just his new release, he has another 8 albums on Spotify, so they are sure to see increased streaming activity.

    I know, he (maybe) only gets 10-15% but still, that is a tidy sum, from this service alone.

    Now, are people still saying Spotify doesn’t pay out…what the f*&^k are you on about?

    Reply
    • Anonymous

      “are people still saying Spotify doesn’t pay out”

      Um, yes — because it’s true.

      But that doesn’t mean Spotify is evil. It isn’t. It just failed: It loses money by the hour; nobody knows or uses it though it has been around for years; it doesn’t pay artists, and windowing turned it into a museum.

      If you don’t know what windowing is, I’ll explain it here:

      Most acts sell most of their music during the first weeks and months after release.

      Now, if you give your songs away during this critical period, you will suffer a certain amount of cannibalization (people don’t buy your music because they can get it for free without breaking any laws). Nobody knows the exact ratio, but you would lose money even if it were as low as 1 to 100 (it takes 100-140 Spotify streams to balance the loss of 1 sold song). And nobody claims it’s that low.

      So a lot of smart people thought about this for a while and the smartest among them — people like Adele, Coldplay, Black Keys, Taylor Swift, Beyoncé and their teams — realized that windowing was the way to go:

      Windowing comes in all shapes and sizes, but it generally means that you keep your property away from Spotify, or similar services, during the most critical period in the lifespan of a record — and that you make it available on these services as soon as sales begin to drop.

      Reply
      • Yep

        I know what windowing is:) It is (was) the result of the evolution of digital music from ‘a la carte downloads’ to ‘streaming’

        We’re now a little past that critical point where downloads were slipping and streaming wasn’t quite bringing in enough money.

        Downloads are now crashing and streaming is booming. The offset for a lot of labels RIGHT NOW is in the ‘positive’ i.e. the streaming revenue is filling the gap left by downloads and more, in some cases.

        For may label, it’s actually moving a little quicker than we expected Streaming is now the main revenue source. But, we have been focusing on our streaming strategy for over 12 months. Labels would be well advised to shift a lot more focus onto streaming marketing strategies.

        Streaming is a very different way to consume music. The big 1/2 week release date push has gone. The very slow regular marketing of product, over a very long period of time is the way forward.

        Windowing is history.

        Reply
        • Anonymous

          “Windowing is history”

          because Spotify is history when Google launches YouTube Music Key.

          YouTube Music Key offers UMG/Sony/Warner’s entire catalogs — on release day — including all music videos, concert footage, interviews and behind-the-scenes.

          Compare that to Spotify’s old-fashioned audio-only, often delivered weeks or months after release, and tell me you still believe in Mr. Ek’s fantasies…

          Reply
          • There is something...

            Man, you’re so obsessed with Youtube ! Maybe you should seek the help of a professional here, to help you go past your obsession.

          • Anonymous

            “you’re so obsessed with Youtube”

            You’ll soon understand why…

          • There is something...

            Damn I hope it’s soon. Tired to wait !

            Catalog is something, but we still don’t know how all this will be handled: library, playlists, sync with several devices, integration to different kind of OS and Apps… And price. For now, Youtube music is just a chimera.

          • Anonymous

            “For now, Youtube music is just a chimera”

            Because you can’t see it yet?

            You know it’s there — you’ve seen the screen-shots, you’ve seen the contract, and you know it’s going to screw artists like we’ve never been screwed before.

          • There is something...

            Stop speaking like you’re an artist. You’re just an anonymous. And screenshots tells you nothing on how will behave the final product, so until it’s actually here for everyone to use, you have no idea what the service will do.

          • Anonymous

            Here are the facts:

            You will never sell a song again if you sign Google’s new YouTube contract! Your entire catalogue will be available not only as streaming, but as free download as well on YouTube on release day!

            From Google’s infamous YouTube contract:

            “Catalogue Commitment and Monetization. It is understood that as of the Effective Date and throughout the Term, Provider’s entire catalogue of Provider Sound Recordings and Provider Music Videos (including Provider Music Videos delivered via a third party) will be available for the Premium and Free Services for use in connection with each type of Relevant Content, (excluding AudioSwap Recordings, which will be at Provider’s option) and set to a default policy of Monetize for both the Premium and Free Services, except as otherwise set forth in this Agreement. Further, Provider will provide Google with the same Provider Sound Recordings and Provider Music Videos on the same day as it provides such content to any other similarly situated partners. The foregoing will be subject to reasonable quantity of limited-time exclusive promotional offers (in each case, with a single third party partner) (“Limited Exclusives”), as long as a) Provider provides Google with comparable exclusive promotional offers and b) the quantity and duration of such Limited Exclusives do not frustrate the intent of this Agreement.”

            Also, you shouldn’t look up to artists like that, there are tons of us around here and most of us are pretty ordinary…

      • Stu

        Windowing is fascinating, but I don’t think it’s as cut-and-dried as you suggest. For every Beyoncé, there’s an Ed Sheeran, for every Adele there’s a One Direction, for every Taylor Swift there’s a Bruno Mars… And on and on.

        I don’t think anyone has yet been able to accurately quantify how many less albums the windowers would have sold if they’d been available to stream from day one, or how many more albums the non-windowers would have sold if they’d windowed. It’s unprovable without a parallel reality 😉

        And so everyone brings their pre-formed opinion to the argument, and has a go at any artist (from whichever side) who disagrees with them.

        And we drag sales figures into this: if Ed Sheeran outsells Coldplay (for example) is that a sign that non-windowing is better than windowing? Or just a sign that more people wanted to buy the Sheeran album than the Coldplay one, on musical grounds?

        Anyway, I don’t think the important argument here is whether big, popular artists sell a million more or less albums. It’s about the impact streaming has on smaller, emerging artists as well as established-but-niche artists.

        Reply
        • Anonymous

          Stu, I don’t suggest it’s cut-and-dry: I explicitely said that nobody knows the exact cannibalization ratio.

          But we know it’s there. And the beauty of windowing is that it’s a safe way to avoid it. Think about it for a moment:

          Streaming revenues from release week 1 and 2 — the most critical period — are almost non-existent. Even pro-streamers accept that. It’s all about the long tail, they say.

          So what do you have to lose from windowing during week 1 and 2?

          Nothing. But you have a lot to gain…

          Reply
  5. adolf

    “This album was streamed 26 million times in the first week on Spotify, and that means 26 million people have heard my album”

    No, they just heard 26 million tracks, not the whole album.

    That means a tenth of them might consider buying a ticket or going to a festival

    Every tenth? Lol! Is he really so naive?

    Reply
    • GGG

      Dude sold out multiple nights at MSG. Literally stood on stage by himself. He’s doing well bringing people to shows.

      Reply
  6. furtherlane

    The greater problem with Ed’s (and U2’s) endorsement of Spotify, is that it assumes that touring is the end game for all artists (i.e. “That means a tenth of them might consider buying a ticket or going to a festival, and that’s enough for me to tour very comfortably…”). Touring has become the only reliable way for musicians to make any money. However, there are many artists that do not enjoy or excel at performing (e.g. Van Morrison, Sia, off the top of my head). By accepting streaming’s argument–“Yes, we’re paying you pennies, but now your market is larger!”–these musicians are also tacitly agreeing to a paradigm shift in which they must tour. Video killed the radio star, streaming killed the studio star.

    Reply
    • Stu

      The problem is that this assumes Ed is talking about all artists. His comments seem to be very specifically rooted in his own ambitions / experience: ‘this is why it works for me’ not ‘this is why it works for everybody’. He’s not evangelising, I think.

      Not sure Sia is the best example of an artist laid low by lack of touring income. I suspect she’s doing pretty well for herself with the songwriting credits.

      Reply
  7. Noidea

    Chase that Carrot. If it works out for you, great, otherwise, you are being horribly taken advantage of and I feel bad for you.

    Reply
  8. Justin Mayer (wearing the Business Hat)

    Does Ed own his Masters anymore?

    As a corporate Employee of Atlantic who is owned by Warner Music Group, who owns his Masters and who has a decent equity stake in Spotify, it would make business sense for him to say so, as well it would be a good PR move. Whether or not it is his duty and obligation to do so as dictated by the Corporation he is under contract with, is anyone’s guess. It’s much better for his brand and fan acquisition to push that angle anyways, so it’s a win-win for him and his employers.

    And ultimately as a Pop tweener artist, Spotify and all the social media/tech stuff is huge for where his demographic seems to consume music and convene and interact and seeing as he likely doesn’t own his Masters his live performances are where his bread and butter most likely is and his employers have a huge stake in Spotify so for them to build the hype and help contribute to a high IPO is in their benefit.

    It helps to keep him and the business interests separated from the public image and perception which helps to keep his fan-base believing he is whatever they built it up to be. This is where that’s still such a huge benefit and i think can be where the independents can struggle, having to be too close to their business decisions which ultimately can hurt fans and sales and public perception. He ultimately doesn’t have to look bad to the people that matter the most to him and his employers, and he doesn’t have to risk losing fans by bantering on about music sales and poor streaming rates and he encourages as many people to acquire his music for as cheap as possible in hopes of converting them to a few hundred dollar ticket sale where once ushered through the gates perhaps his team can reel in some Merchandise and Product sales to boot.

    His sponsors like Beats will also be happy as the more people he can put his face and music in front of the more product sales will likely convert.

    Whether or not this helps or hurts anyone else in the music business really isn’t his or his employers concern. They are looking out for their best interests, bottom line!

    MAYER

    Reply
  9. Remi Swierczek

    He is one of the few who have shattered glass celling and are now on the spectator side of the music HUNGER GAMES!

    Spotify to prosper and to be part of fair and prosperous music industry has to convert to MUSIC STORE!

    It’s so SIMPLE!

    Reply
    • john

      not sure how you maintain this high of a level of psychopathy but hats off to you.

      Reply
  10. MNLAKER

    Ed Sheeran is Officially an Idiot and overrated like someone had mentioned above!

    Reply
  11. Ian C

    26 million streams adds up to about 200,000 in royalties. His new album X has sold 634,000 in the UK, about 1/2 a million in the US. Then there are the singles, 8 of which were in the iTunes 100 simultaneously. When you add in the fact he plays solo acoustic shows in arenas (3 nights at MSG) our boy is making enough money to not worry about spotify’s royalty rate.

    Reply
  12. MGMuzik

    After reading all these comments I am very convinced that all OF YOU are the problem with the music industry. You aren’t fans… You’re critics who think your opinion of every article you read means something. You’re the same people who criticize artists and records because in some alternate universe they didn’t find your high standards. You’ll read this and feel the need to name call me b/c you have entitlement issues. You call artists like Ed Sheeran overrated. Overrated to whom? To you? To you whose opinion should be the supreme understanding of the music business.

    Yes the streaming payout for Spotify is ridiculously low and should be re-negotiated. Yes the industry is still in a phase that we don’t know what the future holds; but your criticisms of artists on a DMN blog isn’t productive by any means.

    I am a fan first and an artist second. Spotify is one of the most incredible innovation for music in our time. I’ve discovered more artists since being a premium subscriber to Spotify in the past 2 years than the amount of artists I discovered in my entire life before then.

    I read these articles and hope to find some sense of logical discussion in the comments that follow up and I’m again reminded of where the problem lies in the industry and its in the hands of the consumers who take zero responsibility for their pirating and bad-mouthing. They’re given a blanket of anonymity and think one day my opinion will matter. Well it doesn’t, and until you learn to appreciate this gift that’s been bestowed upon us you’ll forever be a strain on this industry, typing your woes on every thread, in hopes that someone will give you praise so you can stroke your ego and pat yourself on the back for the day.

    Reply
  13. Michael Garvin

    Guys please listen to what I have to say because this is extremely important…….If you are a professional songwriter , not a recording artist as Mr Sheeran is , Then this low payout is devastating……..This isnt about what a recording artist can make playing live………Lets quit making the assumption that all songwriters are touring artists, its simply not the case. Songwriters deserve pay per play that allows them to make a living….

    Reply
    • Patricia Shannon

      Very true, Michael. People say I write good songs, and that I should keep writing songs, but all it has done for me is cost me money. And now that I’m retired and living on social security, I can’t even afford to have demos made. I can’t do it myself because I’m not a very good singer. But people like some of my songs enough they will ask me to sing them. Just like everything in our country, people want things but don’t want to pay, then they complain of the low quality.

      Reply
  14. iamthegif

    We can’t get upset with Spotify for what they pay artists because in reality, they’re paying us what the music is worth on the market. It’s simple supply and demand. If supply far outweighs demand value drops. We live in a time where people are constantly bombarded with music they don’t even want. I see artists practically begging people to download their albums FOR FREE! In Hip Hop we have sites like Datpiff, Audiomack, etc. that rake in a lot of money from ads placed on their sites where they provide free downloads of artists’ mixtapes without paying artists a dime. Datpiff in fact charges artists to make it easier for people to download their FREE music. It’s not even something that’s exclusive to musicians. A lot of industries are feeling it. Photographers can no longer make a living because now everyone with a DSLR camera is a photographer and willing to take photos for free or close to it. As a web designer I compete with free and super low cost templates people can use to get online. At the end of the day, what we have to do is adapt. As an artist you have to find what works for you and work it. Whether Spotify is a benefit to you isn’t a one size fits all type of deal. It comes down to your rate of sale to streams – your conversion rate. Out of the number of streams of your music, how often do people buy? If you sell at a rate where streaming is less valuable than sales, focus on sales. If you sell at a rate were streaming is more valuable than sales, focus on streaming. For anyone curious to know how streaming could possibly make more money than sales, I suggest you read this article on Spotify: Can you make more from streaming than sales?

    Reply
  15. wem

    My music is played on Spotify… I just checked and for one spin I got .00130039…then .00882427 …then .00956…for the same song. I have no idea why the amounts are different. Added all together and I am getting between 4 and 5 cents a day from Spotify…I swing between amusement and horror.

    There is zero indication that this has increased my song sales.

    thought the numbers might interest y’all.
    wem

    Reply
  16. PurpleToneMedia

    The problem is more about how spotify and these other services are getting rich off your music. I don’t know about you, but I like to get paid my cut when someone makes money off my music.

    Reply
    • Patricia Shannon

      The last I heard, Spotify is not making money.

      http://www.ibtimes.com/spotify-reaches-10-million-paid-subscribers-raising-questions-about-when-it-will-become-1588056

      on May 21 2014

      Spotify’s announcement on Wednesday that it now has 10 million paying subscribers highlights the growing popularity of streaming music services, but it raises questions about whether the company can make money since it also spends millions on licensing fees for the songs in its library.
      According to Crunchbase, Spotify has received at least $537.8 million in venture capital funding over seven rounds. Yet, the music streaming service has posted losses of approximately $200 million since it was founded, according to a report published by PrivCo, a firm that specializes in private company financial data. In addition to facing ever-increasing competition from services such as Apple Inc.’s (NASDAQ:AAPL) iTunes Radio, Pandora Media Inc. (NYSE:P), Amazon.com Inc. (NASDAQ:AMZN) and several smaller Internet music streaming services, Spotify’s biggest obstacle on its path to profitability may be its royalty payments.

      Of all the revenue Spotify generates, approximately 70 percent of it is paid out as royalties to rights holders, with other expenditures covered by the remaining 30 percent. According to Spotify, it has paid out more than $1 billion in royalties, with $500 million of those royalty payments in 2013 alone.

      Reply

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