I’m Spotify CEO Daniel Ek. And These Are the Facts…

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Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it.  We started Spotify because we love music and piracy was killing it.  So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time.

Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work.

Quincy Jones posted on Facebook that “Spotify is not the enemy; piracy is the enemy”.

You know why?  Two numbers: Zero and Two Billion.  Piracy doesn’t pay artists a penny – nothing, zilch, zero.  Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists.

A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then.  And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away.

When I hear stories about artists and songwriters who say they’ve seen little or no money from streaming and are naturally angry and frustrated, I’m really frustrated too.  The music industry is changing – and we’re proud of our part in that change – but lots of problems that have plagued the industry since its inception continue to exist.  As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem.

We will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as a leader in this industry; and it’s the right thing to do.

We’re trying to build a new music economy that works for artists in a way the music industry never has before.  And it is working – Spotify is the single biggest driver of growth in the music industry, the number one source of increasing revenue, and the first or second biggest source of overall music revenue in many places.

Those are facts.  But there are at least three big misconceptions out there about how we work, how much we pay, and what we mean for the future of music and the artists who create it. Let’s take a look at them.

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Myth number one: free music for fans means artists don’t get paid.

On Spotify, nothing could be further from the truth. Not all free music is created equal – on Spotify, free music is supported by ads, and we pay for every play.  Until we launched Spotify, there were two economic models for streaming services: all free or all paid, never together, and both models had a fatal flaw.  The paid-only services never took off (despite spending hundreds of millions of dollars on marketing), because users were being asked to pay for something that they were already getting for free on piracy sites.  The free services, which scaled massively, paid next to nothing back to artists and labels, and were often just a step away from piracy, implemented without regard to licensing, and they offered no path to convert all their free users into paying customers.

Paid provided monetization without scale, free reached scale without monetization, and neither produced anywhere near enough money to replace the ongoing decline in music industry revenue.

We had a different idea.  We believed that a blended option – or ‘freemium’ model – would build scale and monetization together, ultimately creating a new music economy that gives fans access to the music they love and pays artists fairly for their amazing work.  Why link free and paid?  Because the hardest thing about selling a music subscription is that most of our competition comes from the tons of free music available just about everywhere.

Today, people listen to music in a wide variety of ways, but by far the three most popular ways are radio, YouTube, and piracy – all free.

Here’s the overwhelming, undeniable, inescapable bottom line: the vast majority of music listening is unpaid. If we want to drive people to pay for music, we have to compete with free to get their attention in the first place.

So our theory was simple – offer a terrific free tier, supported by advertising, as a starting point to attract fans and get them in the door.  And unlike other free music options – from piracy to YouTube to SoundCloud – we pay artists and rights holders every time a song is played on our free service.  But it’s not as flexible or uninterrupted as Premium. If you’ve ever used Spotify’s free service on mobile, you know what I mean – just like radio, you can pick the kind of music you want to hear but can’t control the specific song that’s being played, or what gets played next, and you have to listen to ads.  We believed that as fans invested in Spotify with time, listening to their favorite music, discovering new music and sharing it with their friends, they would eventually want the full freedom offered by our premium tier, and they’d be willing to pay for it.

We were right.  Our free service drives our paid service.  Today we have more than 50 million active users of whom 12.5 million are subscribers each paying $120 per year.  That’s three times more than the average paying music consumer spent in the past.  What’s more, the majority of these paying users are under the age of 27, fans who grew up with piracy and never expected to pay for music.

But here’s the key fact: more than 80% of our subscribers started as free users.  If you take away only one thing, it should be this: No free, no paid, no two billion dollars.

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Myth number two: Spotify pays, but it pays so little per play nobody could ever earn a living from it.

First of all, let’s be clear about what a single stream – or listen – is: it’s one person playing one song one time. So people throw around a lot of stream counts that seem big and then tell you they’re associated with payouts that sound small. But let’s look at what those counts really represent. If a song has been listened to 500 thousand times on Spotify, that’s the same as it having been played one time on a U.S. radio station with a moderate sized audience of 500 thousand people. Which would pay the recording artist precisely … nothing at all. But the equivalent of that one play and it’s 500 thousand listens on Spotify would pay out between three and four thousand dollars.

The Spotify equivalent of ten plays on that radio station – once a day for a week and a half – would be worth thirty to forty thousand dollars.

Now, let’s look at a hit single, say Hozier’s ‘Take Me To Church’. In the months since that song was released, it’s been listened to enough times to generate hundreds of thousands of dollars for his label and publisher. At our current size, payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that’s only growing – we expect that number to double again in a year.

Any way you cut it, one thing is clear – we’re paying an enormous amount of money to labels and publishers for distribution to artists and songwriters, and significantly more than any other streaming service.

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Myth number three: Spotify hurts sales, both download and physical.

This is classic correlation without causation – people see that downloads are down and streaming is up, so they assume the latter is causing the former. Except the whole correlation falls apart when you realize a simple fact: downloads are dropping just as quickly in markets where Spotify doesn’t exist.

Canada is a great example, because it has a mature music market very similar to the US.   Spotify launched in Canada a few weeks ago.  In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else.

If Spotify is cannibalising downloads, who’s cannibalising Canada?

By the same token, we’ve got a great list of artists who promoted their new releases on Spotify and had terrific sales and lots of streaming too – like Ed Sheeran, Ariana Grande, Lana Del Rey and alt-J. Artists from Daft Punk to Calvin Harris to Eminem had number ones and were on Spotify at the same time too.

Which brings us back to Taylor Swift.  She sold more than 1.2 million copies of 1989 in the US in its first week, and that’s awesome.  We hope she sells a lot more because she’s an exceptional artist producing great music.  In the old days, multiple artists sold multiple millions every year.  That just doesn’t happen any more; people’s listening habits have changed – and they’re not going to change back.

You can’t look at Spotify in isolation – even though Taylor can pull her music off Spotify (where we license and pay for every song we’ve ever played), her songs are all over services and sites like YouTube and Soundcloud, where people can listen all they want for free. To say nothing of the fans who will just turn back to pirate services like Grooveshark.

And sure enough, if you looked at the top spot on The Pirate Bay last week, there was 1989…

Here’s the thing I really want artists to understand: Our interests are totally aligned with yours.  Even if you don’t believe that’s our goal, look at our business.  Our whole business is to maximize the value of your music.   We don’t use music to drive sales of hardware or software.  We use music to get people to pay for music.  The more we grow, the more we’ll pay you.  We’re going to be transparent about it all the way through.  And we have a big team of your fellow artists here because if you think we haven’t done well enough, we want to know, and we want to do better.  None of that is ever going to change.

We’re getting fans to pay for music again. We’re connecting artists to fans they would never have otherwise found, and we’re paying them for every single listen.

We’re not just streaming, we’re mainstreaming now, and that’s good for music makers and music lovers around the world.

 

 

Image by Magnus Höij, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).

153 Responses

  1. Anonymous

    I wonder how much would have been considered fair value if $6 million from a secondary income source isn’t enough

    Reply
      • Remi Swierczek

        If he converts his mainstreaming and all Radio to simple discovery based music store his numbers will add-up.

        Actually, the numbers will be awesome, and he can have his $5B IPO.

        Let’s do it Mr. Ek!

        Reply
        • FarePlay

          “We’re not just streaming, we’re mainstreaming now, and that’s good for music makers and music lovers around the world.”

          The ego on this sucker and his handlers. Reminds me of the confidence of the engineers who designed the Titanic. What’s your plan B, Mr. Ek?

          I don’t want what you have, so don’t ask me to follow you. I doubt I’m alone.

          Reply
          • Musicservices4less

            Doesn’t anyone question the business model of Spotify and many other music websites? I actually review and attempt to negotiate the agreements of Spotify, etc. all the time. I’ve said this before, every business should use the Spotify, etc. business model as you can never go broke no matter what your overhead is. If Spotify, etc. had one subscriber, they would stay in business. Doesn’t that sound strange to anyone? If my label had one sale it would be out of business. Why is Spotify, etc. so special? Does anyone want to take this question on?

            If you need it explained another way, I get to pay myself pretty much anything I want using investor money but if my business generates no money but still gives away millions upon millions of inventory (songs, masters) I get my salary and don’t have to pay the third party suppliers.

            Has anyone ever worked in a different industry and this was an acceptable way of doing business? Why didn’t Spotify use the investor money to pay the third party suppliers what they really wanted? Isn’t it their products? The balls on this company, etc. is unbelievable maybe even criminal.

          • Anonymous

            The ego on this sucker and his handlers. Reminds me of the confidence of the engineers who designed the Titanic.

            Funny, kind of reminds me of Steve Jobs….

          • Anonymous

            “What’s your plan B, Mr. Ek?”

            Lie.

            Like when he claimed that Swift would have earned $6,000,000 from Spotify in 2014.

            Big Machine says that Swift earned just $500,000 from Spotify in the last year, according to International Business Times.

          • GGG

            Bullshit. Even at the low indie rate of a .004/stream rate, getting $500K would take 125M streams. The number 1 on a top list I just looked at was Hozier. That song has 50M+ plays. If you don’t think TS had well over 125M plays across all her music, you’ve never look at Spotify. Hell, the single probably had that many alone.

          • Anonymous

            “Bullshit”

            Let’s see, who should we trust — Big Machine, or the anonymous ‘GGG’?

            Decisions, decisions…

          • HHH

            You might check her Soundscan for the past 12 months. Not a stretch at all to assume at least 10 streams for every purchase. I’d suggest a ratio of 10x that. Look at her track sales off just Red alone for the past 12 months, close to 2m. Not at all a stretch to assume 125m plays.

          • zed

            You forget where’s the difference between 6 million and 500 thousand and that both figures can be correct: 6 millions is what Spotify pays related to TS. 500 thousands is what TS gets. Why? Isn’t it obvious? 6 millions is paid to music industry, from which it pays 500 thousands to TS. Whay Mr. Ek avoids to mention is that in the whole deal only a smaller portion of money gets its way to artist, which he praises. Majority is taken by business. His (Spotify) and music industry (labels).

          • FarePlay

            We’ve been talking about the damage created by free streaming offers that are open ended both from a revenue and expiration standpoint. If you think about it, Spotify, with no experience in the record business, aside from Napster and Bit Torrent, marched into town with a fully baked business plan that was going to transform the music business.

            Had they come into the market with an attitude of we have what we think is a great idea help us make it happen. Things might be very different today. Now, they are going to have to back-peddle Spotify as a service with a lot of music, but not everything; very different from their plan of ending all other forms of music consumption.

            Streaming is part of our music future, it is not the future.

      • John Matarazzo

        Mr. EK seems to be saying that we should be happy with WHATEVER he wants to give us because the alternative is piracy. And be greatfull. So my questions is: which is better to die from cancer or the palgue

        Reply
    • R1AA

      Straight from RIAA first 6 months of 2014

      2014 first 6 months—- download: $1.3 billion (down 12%)
      2014 first 6 months —-streaming: $859 mil (up 28%)
      2014 first 6 months —- physical: $898 (down 14%)

      2014 full year prediction —-download: $2.444 billion (down 12%)
      2014 full year prediction —-streaming: $1.959 billion (up 28%)
      2014 full year prediction —-physical $1.670 billion (down 14%)

      At the current 28% growth rate, streaming will be KING in 2015

      #1 Streaming: $2.5 billion (up 28%)
      #2 Download: $2.1 billion (down 12%)
      #3 Physical: $1.5 billion (down 14%)

      Reply
  2. David

    Congrats to Ek for proving the point I have made repeatedly: that the existence of piracy is fundamental to his business model. Which is why he will never do anything to act against it.

    Reply
    • Me

      This is probably one of the top 10 dumbest comments I’ve read on this site. Spotify gives music fans a LEGAL alternative to piracy, which does in fact pay the rights holders.

      Reply
      • David

        You forgot the last word: ‘peanuts’. From the ‘free’ tier, that is, where the average payout is only about a tenth of a cent per stream. If Spotify took measures to drive users from free to paid, as Ek claims, that wouldn’t matter so much, but the reality is that they don’t. The ratio of free to paid users remains stubbornly low. Of course, Ek’s ‘key fact’, that 80% of paid subscribers started out as free users may well be true, but it doesn’t follow that a high proportion of free users convert to paid, and I don’t see any evidence that the proportion is increasing. Ironically, one obvious way to drive users from free to paid would be precisely what Spotify refuses to do, that is, to give paid users preferential access to popular works, for example by making new albums available to paid users only.

        As for piracy, if you can’t see the vital role of piracy in Spotify’s business model, you can’t have read Ek’s post with much care. He refers to piracy about a dozen times, always with the underlying message: take whatever Spotify offers you, because it is better than piracy. It is the continued existence of piracy that gives Spotify its leverage over record labels and artists, just as the continued existence of burglary gives the sellers of burglar alarms the leverage to sell their product. Do you think the burglar alarm business wants burglary eliminated? Of course Ek *says* ‘We started Spotify because we love music and piracy was killing it’, but how can we take that seriously when one of his chief partners in Spotify is Sean Parker of Napster, and Ek himself spent his pre-Spotify career developing P2P technologies used mainly by pirates? If Spotify were sincere in their opposition to piracy, they would be lobbying legislators and law enforcement agencies to take more effective action against it, but as far as I recall the sum total of their public action against piracy is: ‘Nothing, zilch, zero’.

        Reply
      • Anonymous

        David is referring to the fact that piracy is Mr. Ek’s primary selling point.

        Reply
          • GGG

            I get it, you don’t like streaming, but continuing to conflate it with piracy is just stupid. Even you know better.

          • Anonymous

            So you think Spotify will exist if we eradicate mainstream piracy?

            Care to explain why?

          • GGG

            Way to change the meaning of what I said. First of all, read through other music blogs, read reddit (a hive of pirates), talk to younger people, Spotify has absolutely caused thousands and thousands of people to stop stealing, because it’s about convenience just as much as it’s about not wanting to pay. If you want to complain about streaming pay rates, great, I’ll be right behind you. The concept is infinitely better than streaming, though.

            Second, sure, in a fairytale world where you eradicate piracy and shut down YouTube and shut down the dark web and shut down any dropbox-like set where you can still share files and shut down email where you can just send shit to a friend and…you know what, let’s just shut down the ability to connect with other human beings online, that’ll stop piracy.

            Then sure, Spotify won’t be necessary. Except that music blogs will still exist, enticing people to want to hear more music than they can afford, so maybe we should shut those down as well. Let’s just go back to where people just hear the same 20 songs on the radio. Then Taylor Swift will be happy, so we can all rest easy!

          • Anonymous

            “Spotify has absolutely caused thousands and thousands of people to stop stealing”

            Good for them. But here’s the truth:

            Only large labels and huge acts make any decent amounts of money from Spotify — and they do so at the expense of considerably more profitable iTunes sales.

            eradicate piracy and shut down YouTube and shut down the dark web

            It should be pretty clear by now that I don’t want to shut down the current version of YouTube, for reasons I’m sure you don’t want me to repeat ever again.

            But the dark web? Really? Do you need bombs, heroin, hired killers, pirates, child porn, identity theft and violent stalkers?

            No, you don’t. Neither do I. Freedom of speech? Totally! Subversion? Absolutely. Pot? Sure. But the world will go on just fine without these Dread Pirate Robert f***ers, and very recent events show you can take them down.

            Mr. Ek will always be on the wrong side in that fight, though. That’s why he’s so rich.

          • Anonymous

            EDIT:

            Forgot quotes around: “eradicate piracy and shut down YouTube and shut down the dark web”

          • Anonymous

            Technology has past the point of no return when it comes to copying and sharing music. If there was any real way to stop piracy, they’re would have been a solution to it when important industries where only starting to hemorrhage money 16 years ago. At the minimum we’d at least have an example, a success story, somewhere in a world of an anti-piracy measure.

          • Anonymous

            “If there was any real way to stop piracy, they’re would have been a solution to it”

            Wrong. It’s very easy stop mainstream piracy — if you want to.

            Content providers want to.

            And they’re going to merge with ISPs and search engines in the near future.

          • GGG

            Not even saying this in a trying-to-win-an-argument sort of way, but I think you severely underestimate some basement-dwelling nerd’s ability to figure out how to share files no matter the circumstances, and the rest of the web’s ability to follow suit.

            You can’t even begin to stop shit like that completely unless you enact some insanely totalitarian gov’t oversight and punishment. And that will not fly in the western world. You can take searches of Google and feel good about yourself, but if you think that will stop filesharing, you’re incredibly naive.

          • Anonymous

            The basement-dwelling nerds are probably bored because the content industry still hasn’t been able to subvert technology like BitTorrent they developed more than a decade ago.

          • Anonymous

            you know what, let’s just shut down the ability to connect with other human beings online, that’ll stop piracy.

            That won’t stop piracy either, because people will just share shit offline. There is no way to back to how things are without getting rid of flash drives and blank CDs too, both things mind you didn’t really exist in the mainstream in the 90s. Actually nevermind “blank CDs”, that’s old skool shit. A blank Blu-Ray disc can hold 400 hours of music and costs 50 cents. How is that for a mix tape.

            People who think there is any hope of stopping piracy have no idea what modern technology is capable of.

          • Anonymous

            “people will just share shit offline”

            Not a problem.

            “People who think there is any hope of stopping piracy have no idea what modern technology is capable of.”

            Criminals have no idea what modern technology is capable of — all the dark net shut-downs this month prove that. 🙂

          • Just to Understand the Cosmic-like Scale

            If someone listened to three hours a day of purely unique music, it would take that person over four months to start repeating music tracks from that one disc. All this music in a medium that costs half a doughnut, or 1/10 the cost of a fancy drink at Starbucks, and can be produced by a modern computer in 11 1/2 minutes.

            Modern technology is really, really, really, really really, really, really really good at copying data.

          • Anonymous

            Not a problem.

            Uh, yes it is. You are fucking delusional. Remember “home taping was killing music”? That was a technology that was labor intensive and limited. The way many kids get free music today is simply by sharing it friend to friend, completely bypassing the Internet. Maybe you are anti-social and never witnessed this happening.

          • Anonymous

            “The way many kids get free music today is simply by sharing it friend to friend, completely bypassing the Internet”

            There’ll always be shoplifters, they’re not the problem.

            The problem is industrial piracy: You need to look at Google, ISPs and companies like the Pirate Bay, μTorrent (Mr. Ek’s old company), etc.

          • Anonymous

            F2F piracy is still a huge problem and by itself enough to keep revenues down for the foreseeable future.

    • Anonymous

      “the existence of piracy is fundamental to his business model”

      Spot(ify) on, David!!!

      Reply
    • FarePlay

      I think David has a point. At the very least piracy has pretty much gone unchecked for 15 years thanks to faulty legislation. It is hard to believe that our legislators allowed a law to stay on the books for so long that Grooveshark and Pirate Bay are still syphoning off money from artists. You know when you have a company operating in your own country for so long, Grooveshark, that has been able to game the system for so long that you have a serious problem.

      The point. Without piracy, Spotify would never have been able to make the deal happen.

      We finally have a Congressional Subcommittee that understands the sadistic cruelty of ineffective take-down notices and perhaps, sometime in the future, we can finally slow down the bleeding. The question; what’s left to save?

      Reply
      • Paul Resnikoff
        Paul Resnikoff

        There’s a theory, which I’m paying attention to, that future disrupted industries will have the muscle to seriously reduce piracy. Who’s the next giant on the horizon? Television, sure, but more importantly Hollywood, which is already using its far greater legislative and financial muscle to take action against piracy hubs and practices by Google. We’re already seeing the effects of this: a Dotcom raid in New Zealand, some early, meager offerings by Google to control tendency to massively abet piracy.

        Remember, the music industry has its billionaires, but this is a tiny industry in comparison. It’s not Hollywood, it’s much smaller than television, games, and pornography. It has less influence over legislation; its interests are subsumed in the grand legislative and enforcement picture.

        Now, consider what happens when 3D printing technology begins to nip at massive industries like firearms and weaponry, automobiles, and computer hardware? It’s difficult to say how this emerges, but when those industries feel the pressure, the piracy landscape could begin to dramatically alter.

        We may be old men and women by the time that truly takes root, or perhaps, just a little more advanced in age. Let’s see.

        Reply
        • Anonymous

          The ability to 3D print anything you want will be such a massive technological revolution that no quorum of billionaires past or present would be powerful enough to stop it.

          Reply
      • Anonymous

        Silly American. You fucked up your chances at copyright reform when you voted in Republican majorities in Congress. Enjoy your global warming too.

        Reply
        • mo

          You clearly cant be a musician our you’d now that we have been f*cked from the beginning. Spotify is simply a disease worse than the one we had.

          Reply
  3. Versus

    Again, the comparison to piracy – the “competing against free” argument – is in bad faith.

    First stop piracy. Spotify should be doing all in its power to lobby and press for proper anti-piracy enforcement. Then Spotify and other legal services could price accordingly, and pay out accordingly. Right now, the pricing of all such music models is distorted by the thievery/piracy/illegality, including much content on sites like Vevo, YouTube, and SoundCloud.

    Once there is no more illegal alternative, music prices can be naturally corrected via a combination of normal market practices and fair legal negotiation.

    Spotify is capitalizing on the exploitation of musicians through piracy, in contrast to which they portray themselves as the hero.

    Mr. Ek, show us you care about piracy by using your influence to truly combat piracy. Then all can win: Spotify can have a better business model with higher income, and rights-holders can be reasonably paid.

    Reply
    • Anonymous

      “Spotify should be doing all in its power to lobby and press for proper anti-piracy enforcement”

      Why? Spotify would be dead without piracy.

      Reply
    • Foster Hagey

      What you are talking about is price fixing, and it is also illegal.

      Piracy doesn’t negatively effect music revenue. If someone is going to steal, they never had any intension of paying, so it isn’t going to effect sales. It really doesn’t.

      What does negatively effect music revenue is a decrease in demand due to the increase in supply of available music and other cheaper forms of entertainment made available via the internet.

      The Internet made communication easier and cheaper. Music is a form of communication, thus it got cheaper and easier with the internet., but it isn’t because of music piracy. All that piracy was going on before the internet. You just couldn’t see it.

      Reply
      • Anonymous

        “Piracy doesn’t negatively effect music revenue”

        Perhaps not, but it sure as hell affects it negatively.

        Reply
      • Paul Resnikoff
        Paul Resnikoff

        Piracy doesn’t negatively effect music revenue. If someone is going to steal, they never had any intension of paying, so it isn’t going to effect sales. It really doesn’t.

        I once sat down with Harvard professor and researcher Felix Oberholzer-Gee, who argued years ago that file-sharing had no negative impact on music sales. The widely-cited research had one problem: it was obviously wrong. What I think we forget is that if the average person could get a Mercedes for free, with near-zero ramifications, they’d take it. The only little problem is that Mercedes are controlled quantities with scarcity: you can’t 3D print a Mercedes (yet), and if you steal one there are potentially very serious consequences (and lots of enforcement mechanisms to get you caught).

        Music used to have many of the same controls, all of which ended at some point in the 90s. In some fantasy version of the future, sales and recording revenues would surge despite free access everywhere, because there’s more listening and consumption than ever and more exploration and music-loving fans! In reality, people are people, they’ll take things if they can, if they’re even aware of the issues (or care if they are aware).

        And that’s why we’re where we are with the music recording, and the music industry at large. Sorry, piracy has not only affected music sales, it has crushed them.

        Reply
      • Verus

        “Piracy doesn’t negatively effect music revenue. If someone is going to steal, they never had any intension of paying, so it isn’t going to effect sales. It really doesn’t.”

        Not true. If a listener could not obtain music for free/stolen/pirated, then unless they didn’t care very much for music, they would pay.

        Reply
      • Verus

        “What you are talking about is price fixing, and it is also illegal.”

        Where did I mention price fixing?
        I referred to negotiations. There are negotiations going on, like the deals Merlin makes, or the different deals that iTunes apparently makes with the major labels etc.

        Reply
      • Antinet

        Thanks for the delusional comment. Whether or not a young potential music consumer perceives he/she has to buy a band’s work song by song, or album by album, or just gets their ENTIRE CATALOG in one folder from BitTorrent or a friend most DEFINITELY affects whether or not they will try to obtain pirated music.
        This answer has already been obtained since the peak of sales in the late 90s. Everyone can kvetch about how much cds cost and how many good songs you got, and how corrupt the industry was, but things swung a bit too far in the other direction, clearly.

        You can say it can’t be stopped technologically, which is also nonsense, but your statement is patently ridiculous, and to me, indicative of the cluelessness of the current over-mommied generation, and its willingness to inflict pain on themselves, much like the Stockholm Syndrome, where the kidnapped start to love their oppressors.

        Obtain nuts some day, generation eunuch.

        Reply
  4. Industry Manager

    The problem isn’t the payout to artist (that’s an issue that needs to be taken up with the major labels).

    The problem is SONGWRITERS make almost NOTHING, even if they were a co-writer on one of Swift’s songs.

    Of course, Ek will liken 500,000 plays on Spotify to one single play on radio, because he knows he can spin it to make it sound good to those who’ve never actually had a hit song as a songwriter only to see that song on a streaming service and see a statement that says the payout from that service is essentially nothing. I am one of the songwriters who can point to a #1 Billboard record and say “Hey I’ve received next to nothing from Spotify and Youtube is not even worth discussing because they themselves pay less than nothing”. Btw I have a HUGE issue with youtube, even more so than Spotify. I can say this because I have hard numbers to point to from my statements. As a songwriter, we make more per play on the radio than millions of plays on Spotify and that IS A FACT.

    For those who complain about songwriters being paid from radio spins, yet the artists aren’t..well guess what? We songwriters don’t receive a check from Sound Exchange like artists and labels do. We also don’t receive checks when the artist perform a song we’ve written, sold merchandise that people now want to buy because of said song we’ve written etc etc etc.

    Majority of artist today don’t write their own songs. What they do is come in the 9th hour and say hey I want to cut this record, then if it makes the album/ep they will say …ok, we’ll put it on here if I get X amount of publishing on the song and then their publicist bandies about making it appear as though they’ve WRITTEN the song when in fact they had no clue it even existed before it was played for them.

    Anyway, what we believe needs to happen around streaming (as I believe in it’s future, however not its present)…..

    1) Spotify- needs to allow artists/labels to release music only on the PREMIUM paid service (however I doubt they will because the free users drive the service and they use their overall numbers to set ad rates etc)

    2) Major Labels – need to be more transparent in regards to streaming, cease their shady accounting practices and share the licensing fee they are paid up front by services. They also need to pay out streaming royalties to artist, most do not receive a penny.

    3) DOJ – needs to revise the consent decrees and allow us the right to say NO to Pandora or anyone else of our choosing and this includes COVER SONGS as companies like power music have made a fortune off the backs of songwriters while we see pennies. There is absolutely no reason our music should be sold while we have no idea as the NOI is a joke to say the least and there’s no justification for us to receive the same statutory rate as if we wrote it specifically for their company or whomever may decide to sell a cover.

    4) DMCA – needs a major overhaul and we need to do away with safe harbor provisions. If someone sends a notice once and you are aware of such notice, if the content pops up again, I believe said company should be fined…of which some of the fine goes to the content owner and the rest to the oversight committee (which is what we need).

    Thanks for reading

    Reply
    • RemixRotation

      I do not get it — why would a songwriter write a hit song for some band / popstar, and give it to them for free, knowing that they will make millions off their work?

      Reply
    • GGG

      Good points.

      Also, you can register for BMI Live if you want to get paid for public performances. Not sure how well it works, but I know it exists.

      Reply
    • dude

      The problem is SONGWRITERS make almost NOTHING

      Spotify is paying 70% of revenue which is fair in my mind – you make a fair point but I think your beef is (or should be) with how the 70% Spotify pays out gets split between the publisher/writer and label/recording artist

      Also, keep in mind the publisher/writers only get $0.09 for an iTunes track download, the other $0.61 goes to the owner of the master – thats only about 13% of the total for the publisher. Im not sure how Spotify actually does its publishing payments, but Id be interested to know if the split is about the same there or if its out of alignment

      Reply
      • jj

        “Spotify pays 70%…”

        Songwriters receive only 7% of Spottyfry’d revenue.
        And who cares what percentage they pay? Their business model is unsustainable if it puts their suppliers out of business… This isn’t about artists being greedy, this is about a sham Wall-Street-IPO financial instrument masquerading as a music business solution.

        IF THEY CAN’T PAY, THEY NEED TO GO AWAY!!!

        Reply
  5. MaD LibS!

    Fill in the blanks!

    Our whole reason for existence is to help ___________ find _________ and help _______ connect with ______ .

    Reply
  6. well

    Well that solves it. The Record Companies are silently watching the chaos while they secretly fill their pockets with everyone else’s money. Record Companies are not nearly as vital as they were before the digital age. They can be replaced by other specific services which are transparent.

    Reply
  7. GGG

    Paul, I’m assuming the answer is no, but will Ek be responding to questions/comments on this post, or was it just sent to you?

    Reply
      • GGG

        Well, I’ll just stick this here just in case:

        Mr Ek,

        If you were to read through this website, I’m one of the few vocal supporters of streaming/Spotify on here, so you can take this question as more than just someone attempting to call you out. As an artist manager working with developing acts, I support streaming, and more or less Spotify.

        Anyway, one of the major concerns that relates to just about every problem anyone has with Spotify is control over what’s released on the service, which right now is all or nothing. At this point in time, while digital sales are still big enough to bring in real money, windowing is still a very real way for artists to maximize income, at a certain level of success.

        So I’m wondering what the reasoning is behind not allowing new releases to be windowed within Spotify? Only available to Premium subscribers for whatever period of time, as Swift’s team has said they want. It seems like it’d be a win for everyone. Since Spotify doesn’t have a massive number of subscribers yet, it won’t hurt artists too much regarding windowing sales. But it will also give the subscribers access to the album, plus higher rates for those streams. From your perspective, it seems like it’d be a legitimate conversion tool for users. Sitting through an ad every couple of songs is one thing, but having an album right at your fingertips but blocked is sure to make plenty say “fuck it, I’ll pay,” especially if that happens a number of times. And it can certainly be up to the artist. Plenty will want it available on release day, so it’s not like you’d have a service full of blocked records.

        A response would be great, thanks

        Reply
        • hippydog

          Quote “So I’m wondering what the reasoning is behind not allowing new releases to be windowed within Spotify? ”
          .

          I can think of a few of them.. (and i am sure you can too)..
          but
          I do believe what ever possible “losses” spotify thinks might happen (IE: losing free users) would be easily outweighed by the uptick in paid users and the reward of “good vibes” that would be received by the top 10 artists..

          streaming can not follow the CD and Itunes/download model of “everything is the same price”..
          Music pricing needs to start moving to tiered pricing.. So it can maximize the returns..

          so ya..
          I’m also interested on why Spotify is unwilling to even negotiate this idea..

          Reply
      • Name2

        Still, isn’t this a Spotify blog post you just lifted and made look like he was addressing DMN readers? Or did I miss your answer to that question?

        Reply
          • Fact Checkin' Cuz

            Wow, so it is.

            I love this blog, it’s like the Daily Mail (UK toiletpaper) of the Music Industry.

            And reading it continually reminds me how many two-faced bunch of shits are involved in that industry, right down to this reportage.

            Enjoy your pool of faeces, folks.

          • GGG

            Paul getting page views by passing off an article from another site as one written for his own.

            What a joke. Between your commenters having 100 times the knowledge and/or doing 100 times the research, how do you honestly have the gall to pass yourself off as a journalist? This is just ridiculous. You’re a fraud.

          • Anonymous

            …btw, Ari takes it a step further today in ‘his’ article A Brief History of the Record Industry, 1890-2005 (see DMNs front page)…

            I’ve honestly never seen a site like this.

          • Anonymous

            …and it gets better by the minute, you really need to see that story…

  8. George Johnson

    These conmen should be sued for serial copyright infringement and somebody should make sure Sean Parker and Mini-Me never get near a music copyright ever again.

    The reason why Taylor Swift left Spotify is because EKwanted to give her music away on the free tier and you morons at Spotify refused Taylor. Spotify wanted to play hardball with Taylor Swift, so blame yourself Mini-Me.

    Then Ek preaches “we value art”, then why even have a free tier?

    Daniel Ek, Parker and other streamers are part of the “New Music Reich” very similar to the true story of the “Monuments Men” – Daniel Ek and Sean Parker want to steal every piece of music that has ever existed, put it in one place, not pay for it, use force to get it, and it’s all perfectly “legal”. Seems pretty “Reich Like” to me, especially when Ek and Parker only pay songwriters and music publishers .00000012 cents per play, yet they steal billions, all subsidized by music creators not receiving their lawful royalty.

    Spotify and Ek and others abuse the American copyright system and it’s time American Music Creators stand up for copyright or lose it to these criminals forever. That goes for you too Quincy – give me a break.

    I really hope the Department of Justice and Congress start doing something for American copyright owners and protecting them instead of these foreign “Music Licensees”.

    That goes for the Copyright Office too. It’s called the Copyright Office, not the Music Licensing Office.

    To the DOJ, please get rid of the consent decrees for ASCAP and BMI and issue a temporary injunction against Spotify here in the United States. Then, Congress needs to pass a Copyright Protection Act this coming session and start protecting American copyright owners, not foreign “pump and dump” ponzi schemes so a bunch of hackers like Ek when he was at Utorrent can make billions again off virtual piracy.

    Spotify pays songwriters and music publishers .00000012 per play that we SPLIT. Daniel Ek should start taking .00000012 for his yearly salary, but this is just a charade to Ek and Parker while they laugh and party all the way to the bank.

    Good times!

    Reply
    • mmm

      Agree – Totally. How much exactly are this guy, his lawyers, and his 1500 staff getting paid to lose half a Billion dollars?

      I think a good plan would be to start streaming Spotify for free 24 / 7 (not kidding – I have an old computer I would gladly dedicate solely to this)… “we” could collectively help bankrupt them before they successfully lobby to pay and fat even 0 for in royalties.

      Reply
  9. Anonymous

    “if you looked at the top spot on The Pirate Bay last week, there was 1989”

    Newsflash for you:

    Your lame extortion strategy doesn’t work anymore!

    Taylor Swift, Beyoncé, Coldplay, AC/DC, Beatles, Black Keys, Adele, etc. prove that millions of fans go straight to iTunes and buy the music they love when they can’t get it for free on your service.

    1989 had the best release week since 2002 because it wasn’t available on Spotify, Beyoncé’s latest album was the fastest-selling album in iTunes Store’s history because it wasn’t available on Spotify, and your service is the fastest-sinking streaming service on the planet because we really, really don’t like you, your service, your sexism or your pathetic mafia-style piracy threats.

    Reply
  10. Anonymous

    So tired of the same old tired speak from this guy, the labels, and their proponents. Transparency really isn’t that hard.

    Look Danny boy, most artists know you have ZERO interest in actually helping them. We also know it ain’t your job to help us. Just don’t sit there an pretend your on our side or that your doing ANYTHING that is actually good for musicians. You probably could if you wanted to but that would be a lot harder than what you are doing and would not put nearly as much money in your personal bank account.

    Your ONLY real interest is that artists keep their content on Spoofify so you can keep drawing a nice fat salary while figuring out how to cash out for the maximum.

    I don’t fault you for trying to run a profitable business, or for trying to make money for your investors, just don’t piss on my head and try to tell me it’s raining. Your no savior from piracy and your certainly no friend to the content creator.

    If a streaming service ever does come online that actually puts the content creator FIRST and actually is transparent in their payouts and accounting they will have the most valuable resource of all, the SUPPORT of the creators themselves.

    Focus more on the artists themselves and less on the majors catalogs. Even the biggest artists will be going “DYI” more and more. Be in it for the long run, build that grass roots support from the artist community by being fair and open with them and they will go to bat for you.

    Reply
  11. Georges Imbert

    Although very skeptical about Spotify’s good will and generousity towards music makers and rightholders, I think his arguments are pretty strong here.

    Still, I agree with the comments about how the piracy argument is an easy way for Ek to justify his model. They do better than any other web music service post napster it’s true, but I sincerely doubt they do good enough or ever will. I am 24 and the magic of internet (and piracy) enabled me to discover and listen to so much music it made me love it and pay for it a lot of money over time (paying for concerts and parties, paying for vinyls, for merchandized products etc.). How would I ever want to access to 30 millions of tracks if I didn’t know anything else but The Beatles or Michael Jackson?

    No, the real issue for me – an issue that doesn’t seem to have been addressed here yet – is about the remuneration of smaller artists through such a platform. Most of these 30 million tracks aren’t made by Taylor Swifts or Justin Biebers. Most of it is created by far less known (and MUCH BETTER) artists and record companies worldwide! These underground artists are the ones pushing boundaries, reinventing music each day and making it evolve through time! They are the ones creating cultural value, creating the codes that shame the music thats gonna be popular in the coming years. This is what they call the “long tail” business wise. It’s no secret that from the 30+ millions of tracks of these platforms, people only listen to about 2 million titles. But Spotify, Deezer, Google Play Music All Access, Xbox music, Rdio etc. don’t advertize 2 but 30 millions of tracks. So what goes to these people ? Almost nothing. Here we have the most worthy, honest, hard-working and passionned musicians being and staying poor while helping the big ones fill their pockets.

    What solution does Ek have for these people? Why wouldn’t they encourage and support the hundreds of thousands of artists that make their catalogue worth anything by paying them back more than that? What’s the point giving millions to pop artists and only a few pennies to true music producers? If Spotify imposes itself as the main model, what’s gonna happen to these guys? Are we gonna be left with only the Top 50 artists in the world listened to by under 18 y o girls and boys of developed countries?? Come on, tell us you have a better answer than this.

    Reply
  12. Industry Manager

    I support the notion of streaming, I’m simply against the current “freemium” model. It simply does not work. Spotify et al are more concerned with ‘hyper growth’ as opposed to profitability. I believe what should be done is a 30 day trial across the board and then after that everyone pays.

    Also, I’d like to say that as a songwriter it does not matter if you own your publishing as I do (having turned down UMPG, Ultra-International and others), streaming doesn’t add up to much. When Spotify says they’ve paid out 70% of their revenue, I believe them. However, if they really want to be transparent as they claim, show us a breakdown of what’s been paid to the labels and whats been paid to songwriters/publishers. There is a huge discrepancy there.

    I’m also against Pandora as well and the current consent decree. 168 million streams equaled 12.5K on their service for Aloe Blacc, Mike Enzinger and Avicii on the songwriter side of the equation (per Aloe Blacc’s op-ed).

    Labels are at fault, so too is the government but so too are streaming services. I’ve seen Mr. Ek say that basically we shouldn’t focus on “per stream rates” but I’d say there should be a set per stream rate across the board. Transparency is setting a rate and making it public for everyone to know (at launch), even if you are a privately held company. Spotify decided not to release any info until they realized the public outcry was beginning to drown out their big publicity spend.

    Whoever stated transparency isn’t that difficult is absolutely right…It’s not, however, this industry has a long history of keeping artists, songwriters, managers etc in the dark for as long as possible.

    I’d love to see Spoofy as I call them transition to the 30 day trial, then everyone pays and address the discrepancy in the payout between labels and songwriters/publishers.

    Finally, in regards to BMI Live etc we’re all well aware of how to collect our money. The problem isn’t public performance it’s streaming is making it damn near impossible for top of the line songwriters, let alone the smaller guys to earn ANY sort of living. We’re the ones writing your favorite records 9/10, not your favorite artist. YES, we are also well aware that a lot of ‘standard industry practices’ need to be overhauled as well. Government regulation of this industry is absurd in my opinion.

    Reply
    • GGG

      The BMI Live comment was simply referring to this comment you made: “We also don’t receive checks when the artist perform a song we’ve written.”

      Reply
  13. Name2

    Piracy is awesome.

    That said, wake me up with your outrage when the labels finally open their books. Somebody (Spotify) says that they are writing the majors big checks. The majors? Shrugging.

    Same as it ever was.

    Reply
  14. derby

    “Right wingers and stuffy fuddy duddies have always hated the arts…”

    Jesus Christ I hate this type of nonsense. So ignorant. I bet you think MSNBC rules and is always correct and Fox News is the devil and so on and so on.

    Yep, some conservatives/right-wingers/etc… hate the arts and hate everything fun, but NOT ALL.

    Your awful generalization is insulting. I love the arts, and I hate Obama. How’s that? Does that work for you? I despise Hillary Clinton, but I enjoy opera. How can that be? How can someone not be a left-wing buffoon and still enjoy classical music, or Broadway? It’s crazy!

    Reply
    • Anonymous

      “I love the arts, and I hate Obama. How’s that? Does that work for you? I despise Hillary Clinton, but I enjoy opera.”

      Excellent point.

      I’m another anonymous, and I happen to disagree on Obama and Clinton — but I’m totally with you the rest of the way.

      Art brings us all together and that’s friggin’ awesome.

      Reply
    • Eurosmart

      Fox “News” is not the devil but is definitely aimed at the class of intellect that appreciates cheap fast food, assault weapons and nurtures a permanent dislike for anyone not “quite like them” This in turn makes you anti art. Get used to it.

      Reply
    • Quill Repubs

      The dissection of the laws that controlled ownership of the media, and prevented monopolies, and gave us the megamedia monsters we fight with today were begun under Reagan. Last I heard he was a Republican. Republican right-wingers are by nature proto-fascists, believing that government serves corporations, not the other way around. I’ve heard from not a few Republicans that common people need to be kept down with an iron fist in the interest of general order, that this is the ‘order of things’ or God’s will. Yeah, those ideals gel well with our Constitution. Who was on deck under the Patriot Act? Liberals and progressives? Please. RIght-wingers get all misty about freedom until they elect another fascist leader, and then they go on a binge of oppression that gets worse each time.

      Music from people like John Lennon, Bob Marley, even Kurt Cobain, was at its essence populist, not pro-elites, and that’s why it became so popular, because it attacked oppressors of the general population.

      You can get your panties in a bunch, but the fact is that Republicans are at core anti-freedom in the arts, though they may be pro-freedom when it comes to guns, which of course they manufacture and sell by and large.

      I can also eviscerate your pathetic defense just by noting how much the Republicans have attacked (and won) against the National Endowment for the Arts, and now PBS and NPR. The major networks are NOT liberal outlets. Wow, you mention ONE major cable network, MSNBC, that doesn’t have an outright right-wing or stealth right-wing bias, as ALL three major networks do. Tell me how left wing Clear Channel and Live Nation are, while you’re at it.

      You’re so tired. I’m so tired of Republicans destroying this country with your bottomless greed, and desire to block what people express and create for each other. Look in the mirror when you want to get exasperated. You’re the problem.

      Reply
  15. Lyle David Pierce, III

    A comment I posted on Spotify.com in response to this statement of Daniel Ek:

    Mr. Daniel Ek, I would never authorize either you, or your organization to use my creations, and I am going to explain why – again.

    “Myth number three: Spotify hurts sales, both download and physical. This is classic correlation without causation – people see that downloads are down and streaming is up, so they assume the latter is causing the former.”

    RESPONSE: In the article attached in the first comment, you can find the following quotations which strongly suggest that Spotify not only hurts both download and physical sales, but also “the artist’s” ability to generate future streaming revenue.

    “Downloads: Rdio Unlimited (their premium service) and Spotify Premium users can DOWNLOAD MUSIC to their mobile device and listen offline, while Songza relies on streaming.” [Emphasis supplied.]
    “Accessibility: All three have mobile apps for listening on the go as well as a web browser-based player. (Spotify ENCOURAGES users to download its standalone desktop program.)” [Emphasis supplied.]

    These quotations clearly state that “Spotify users can DOWNLOAD MUSIC to their mobile device”, as well as their home computers by way of Spotify’s “standalone desktop program” – in fact, Spotify “encourages” this activity. [Emphasis supplied.]

    Spotify offers “[o]ver 20 million” licensed tracks globally at a cost of $9.99 a month for the ad-free experience which permits Premium users to legally download digital copies to both their mobile device, as well as their home computer.

    Thus, it appears that for the cost of one digital album offered through Google Play or iTunes, a Spotify Premium user can access and legally download over 20,000,000 licensed tracks on Spotify and, theoretically, let the account expire at the end of the month – if I were a pirate and had legal access to 20,000,000 licensed songs for only one easy payment of $9.99, I would give up piracy too.

    A number of questions arise in view of the foregoing Mr. Ek.

    (1) When a Spotify Premium user downloads, let’s say, 100,000 licensed tracks to both their mobile device and computer for $9.99, does advertisement still play when those tracks are played offline?

    (2) When a Spotify Premium user plays those 100,000 downloaded licensed tracks, are those plays counted as streams so that “the artist” and “other rights holders” can thereby receive royalty payments?

    (3) If a Spotify Premium user has downloaded 100,000 licensed tracks from “the artist,” how many digital downloads would they reasonably be expected to purchase thereafter from digital download services such as Google Play or iTunes?

    (4) If a Spotify Premium user shares those 100,000 downloaded tracks with a friend, does Spotify still pay royalties to “the artist” and “other rights holders” for those tracks?

    (5) After answering those questions, ask yourself this question: Who is cannibalising the music industry Mr. Ek?

    I had intended on responding to each and every statement made in the attached article, but as I was writing it became clear that it was not necessary to do so as I believe that what has already been written sufficiently dispels the Spotify myth – I shudder to think about how many tracks have been downloaded thus far, and how many more tracks are being downloaded at that at this very moment – $2 billion and counting?

    Reply
    • Name2

      You know those “20,000,000 downloaded in one month” tracks don’t play unless you either crack the Spotify DRM or keep paying your monthly subscription, right?

      Drugs are bad, mmkay?

      Reply
      • Lyle David Pierce, III

        Be that as it may, you have yet to share your wisdom as to the underlying questions – please know that I am waiting ever so patiently for you to do so, mmkay?

        Before sharing your thoughts however, in fairness, I will add a further touch of clarity. Given that you have offered your insight by way of comment, I presume that you are aware of the previous posted article by Paul Resnicoff, namely, “How Streaming Services are Screwing Lady Gaga (and Every Other Artist).”

        That article revealed, among other things, the way by which artist management (if a contracting party), as well as artists are excluded from benefitting from any “royalties and other monies” due to a boilerplate contractual clause set out in many, if not all, contracts between artist management (if a contracting party), artists and their record labels.

        That article features a photocopy of the 2007 contract between artist management “Team Love Child, LLC”, “Lady Gaga” and Interscope Records (a division of Universal Music Group) which showed that artist management “Team Love Child, LLC”, as well as artist “Lady Gaga” are not entitled to “royalties and other monies…IN CONNECTION WITH any payments received by Interscope Records pursuant to any blanket licenses under which the Licensee is granted access to all or a significant portion of Interscope’s catalogue…” which Paul Resnicoff explained is “exactly how licensing deals are arranged between streaming services.”

        Paul Resnicoff further showed in the article “Artists Will Receive Nothing from the $3 Billion Beats Acquisition, Sources Say…” that this particular clause is one of the reasons why, if not THE REASON why, record labels received about “$200 million from the Apple sale” yet “artists on those labels will receive nothing at all from the roughly $3 billion acquisition by Apple.” For the sake of brevity, I will not offer any further thoughts at this time concerning the content of the above cited articles, but I wanted to be certain that you were aware of such before further sharing your wisdom and insight as to the underlying questions.

        The underlying questions:

        Question 1 asks whether or not “advertisement[s] still play when those [downloaded] tracks [are] play[ed] offline.” You may think that I am foolish for stating the question as the answer to that question is glaringly obvious, however, given the fact that Spotify’s “financial statements show that the company’s cumulative losses now exceed $200 million”, a particular number which in and of itself displays a certain sense of irony, not only would allowing downloads to be played offline be counterintuitive to an effective business model, it raises interesting questions as to who is ultimately responsible for paying for those offline plays if they are not paid for by advertising.

        See: http://www.marketwired.com/press-release/privco-spotify-posts-80m-loss-on-600m-revenue-the-more-they-grow-the-more-they-lose-1846204.htm

        Question 2 asks: When a Spotify Premium user plays those 100,000 downloaded licensed tracks [offline], are those plays counted as streams so that “the artist” and “other rights holders” can thereby receive royalty payments?

        This is a particularly apt question because if the answer to that question is “no.” That would mean that such plays are, at the very least, depriving “the artist” of the number of streams which “the artist” would have received if the tracks had been streamed online rather than downloaded to a Premium user’s mobile device and computer and played offline. Indeed, at the very least, such plays would deprive “the artist” of popularity, as well as “market share” – Spotify undoubtably encourages such activity.

        If you are in any way confused as to what I am saying, you need only attend the “Spotify I Artists” website at http://www.spotifyartists.com/spotify-explained/ to garner a better understanding of that to which I speak. If you were to quickly peruse the site, you will find a statement whereby Spotify acknowledges that “[e]very time somebody listens to a song ON SPOTIFY it generates payments.” [Emphasis supplied.] If you look further still at the “[r]oyalities: in detail” section, particularly, part 2 thereof, you will find the following:

        “This calculates an artist’s popularity on the service, their ‘market share.’ Dividing an artist’s streams by the total streams on Spotify determines the percentage of our total pay-outs that should be paid for that artist’s rights.”

        Among other things, Mr. Ek stated in his November 11th, 2014 blog that “[w]hen [he] hear[s] stories about artists and songwriters who say they’ve seen little or no money from streaming and are naturally angry and frustrated” that “[he is] really frustrated too.”

        If Mr. Ek and Spotify were genuinely sympathetic with the fact that artists and songwriters receive little or no money from streaming, why would Mr. Ek and Spotify further exacerbate that situation by allowing its Premium users to download music to their mobile device and home computers to play to those tracks offline rather than stream the licensed tracks online?

        See: https://support.spotify.com/us/learn-more/guides/#!/article/Listen-offline (Listen offline…[r]emember to disable offline mode the next time you want to stream. You can sync a maximum of 3,333 songs per device and stay offline for up to 30 days. Enjoy!)

        See: http://www.quepublishing.com/articles/article.aspx?p=2170174 (Listen To Music Offline…Spotify downloads these songs to your computer. Once the music is downloaded, a green arrow appears next to the playlist that’s available offline.)

        I note that my example of downloading, let’s say, “100,000…tracks” was perhaps a bit extreme, nevertheless, in my defence, I will simply state that sometimes using an extreme example helps to illustrate the point.

        Realistically speaking, however, I am aware that Spotify allows its 12.5 million paying subscribers to download up to 3,333 tracks per device for offline listening for up to 30 days before RE-CONNECTING to the internet (i.e., Spotify) and, in fact, encourages such activity. It is noteworthy that Spotify offers the following advice in that regard: “Remember to disable offline mode the next time you want to stream.”

        Yes, I am aware that Mr. Ek stated many things in his November 11, 2014 blog, as well as that “[they] pay artists and rights holders every time a song is played on [their] free service,” and that “[they] license and pay for every song [they’ve] ever played,” but the question that begs to be asked, and I do ask: Who pays for all of the unstreamed offline plays of the tracks downloaded by their 12.5 million paid subscribers?

        At the risk of belabouring the point, Spotify’s royalty formula is as follows:

        “2. Artist’s Spotify streams divided by total Spotify streams

        This calculates an artist’s popularity on the service, their “market share.” Dividing an artist’s streams by the total [number of] streams on Spotify determines the percentage of our total pay-outs that should be paid for that artist’s rights.”

        In view of the Spotify pay-out formula, if all of the offline plays are not accounted for as they have not been streamed on Spotify because they have been played offline by Spotify’s 12.5 million paid subscribers instead so that an accurate determination can be made, it appears that there is a serious problem.

        I would appreciate an answer to question 3 as well if you would be so kind. I have not noted it again as it is a pretty straightforward question.

        Question number 4 asks a question which I think can be more succinctly stated as follows: If sharing of the downloaded tracks with a friend are permitted, is sharing of the downloaded tracks with a friend restricted to only those friends who are also Premium users, and does Spotify still pay royalties to “the artist” and “other rights holders” for those tracks?

        I would appreciate an answer to question 5 as well if you would be so kind. I have not noted it again as it is a pretty straightforward question.

        At this point in time, I will simply say: Please use your imagination as to where this is all going – I am looking forward to your reply!!!

        Reply
    • Hippydog

      I take it you have never used a streaming service? Nor it seems do you understand that a ‘download’ does not always mean MP3?

      What some streaming services do is allow users to “cache” the music on the device.. Yes it is essentially ‘downloaded’
      but the big difference is you CAN NOT play that song on another device by copying or moving that ‘music file’ ..
      It is encrypted and will only play using the streaming services player..

      since it is a controlled file (and can only be played via their player) they can also keep track on how many times that song was played (even when that person is offline)

      ergo it doesnt matter if the song is ‘cached’ or ‘streamed’ the artist gets paid everyone time the song is played..

      Reply
      • Lyle David Pierce, III

        That is correct, I have never used a streaming service such as Spotify.

        You are also correct that I did not know that a “download” does not always mean mp3.

        I was interested in the part of your reply wherein you stated that: “[w]hat some streaming services do is allow users to “cache” the music on the device.. Yes it is essentially ‘downloaded’ but the big difference is you CAN NOT play that song on another device by copying or moving that ‘music file’.. It is encrypted and will only play using the streaming services player..”

        Is Spotify one of those streaming services? I ask because I have not read any material on the Spotify sites that specifically states that, or otherwise explains that, could you please provide me with a link to that specific information? Given the number of complaints of low streaming payouts, I thought I should make the inquiries – in the spirit of transparency if nothing else.

        I also thought downloaded content could be shared, but I did note that you said it is encrypted and will only play using the streaming services player, so did you mean that downloaded content can be shared but only played through the streaming services player? If so, can it be shared offline?

        http://community.spotify.com/t5/Music-Chat/Share-your-playlist/m-p/2119?_ga=1.3954928.1774095782.1415394321#M3383

        Thanks for your reply, much appreciated.

        Reply
        • Anonymous

          Downloading and streaming are definitions of how the music is designed to be used, and how it is monetized (per play instead of per sale). The difference is in business model, not in engineering of how the music is transferred or stored. It has nothing to do with the physical ways the bits flow across the wire. In streaming or even non-interactive radio, the full music track has to somehow make it to the client if it is to be played. This should be easy to conceptualize.

          Reply
          • Lyle David+Pierce+III

            Thank you for replying, your comment was somewhat helpful, but I am trying to ascertain whether or not Spotify kept an accurate count of all of the offline plays, much to my dismay, I still do not no the answer.

            At first blush, it seemed that the comment of Hippydog provided an answer and scenario for one of the issues I raised in my initial comment, however, I had doubts as to whether or not that answer and scenario in fact applied to Spotify. Indeed, all of the information that I was able to acquire on the subject strongly suggested otherwise. For ease of reference, I have set out the quote to which refer below:

            “What some streaming services do is allow users to “cache” the music on the device.. Yes it is essentially ‘downloaded’ but the big difference is you CAN NOT play that song on another device by copying or moving that ‘music file’ .. It is encrypted and will only play using the streaming services player.. since it is a controlled file (and can only be played via their player) they can also keep track on how many times that song was played (even when that person is offline)”

            One of the articles I consulted in order to get a better understanding of how the Spotify streaming service operates, namely, “10 Spotify Tips and Tricks” by Sam Costello, which explains some of the lesser known modes of operation of the service, cast doubt (see link below).

            10 Spotify Tips and Tricks: http://www.quepublishing.com/articles/article.aspx?p=2170174

            Conspicuously absent on the Spotify Premium player was a “Plays” counter such as that found on an iTunes player (compare links below)

            Spotify Premium player: http://community.spotify.com/t5/image/serverpage/image-id/4312i63AD880EEA43FF4B?v=mpbl-1

            iTunes player: http://i47.tinypic.com/2nsykxj.jpg

            The value of ensuring that an accurate count of the number of times each and every track has been played offline (as well as streamed online) on a device and/or computer so that “the artist” and “other rights holders” receive their just entitlements cannot be emphasized enough. Especially in view of the fact that Spotify allows its 12.5 million paying subscribers to download up to 3,333 tracks per device for offline listening (and sharing) for up to 30 days before reconnecting to the internet, i.e., Spotify.

            It is noteworthy that Spotify’s Free tier and Premium tier users do not own the tracks that have been played offline which raises the further question as to whether or not such offline plays are covered by the terms of a blanket license “under which the Licensee is granted access to all or a significant portion of [a record label’s] catalogue….” If the offline plays are not covered by a blanket license “under which the Licensee is granted access to all or a significant portion of [a record label’s] catalogue….” because they are being played offline instead of being streamed, it appears that the clause which prevents artist management (if a contractual party), and an artist from receiving “royalties and other monies” as shown in the article “How Streaming Services are Screwing Lady Gaga (and Every Other Artist)” might not be applicable. If such be the case, it would seem that artist management (if a contracting party), and an artist would be entitled to further “royalties and other monies.” I am not a lawyer, and I am not purporting to give legal advice, but it certainly seems worth looking into as the record labels may owe artist management (if a contracting party), and an artist a significant amount of “royalties and other monies.” If is is found that the contractual clause still prevents artist management (if a contracting party), and an artist from receiving any “royalties and other monies”, nevertheless, a record company may be entitled to further “royalties and other monies” from Spotify for the offline plays if such plays have not been accounted for.

            On the other hand, in view of Spotify’s Royalty platform and, in particular, part 2 thereof which provides:

            2. Artist’s Spotify streams divided by total Spotify streams

            This calculates an artist’s popularity on the service, their “market share.” Dividing an artist’s streams by the total streams on Spotify determines the percentage of our total pay-outs that should be paid for that artist’s rights.

            An accurate accounting of the number of streams (and offline plays) is essential in order to determine the percentage of total payouts unless, of course, Spotify does not pay an artist for any of the offline plays of their 12.5 million paying subscribers who download up to 3,333 tracks per device for offline listening for up to 30 days before reconnecting to Spotify. Perhaps this is another reason why artist streaming payouts are so low.

            All of which brings me to the matter of an effective business model. If Spotify does not pay an artist for offline plays, who do they pay? The answer to that question will be necessary in order to, among other things, determine whether or not the Spotify platform is an effective business model. Nevertheless, what can be reasonably stated at this juncture is as follows – if a significant number of plays took place offline and, in particular, if a significant number of users formed a habit of playing tracks offline for nearly 30 day stretches (which is not unreasonable given the fact that 3,333 songs can be downloaded per device, and the further fact that an offline user would save money on their data usage plans in so doing), a practice which Spotify encourages for some yet unknown reason, it is also reasonable to surmise that an artist would receive less public exposure to the masses, would gradually become less popular and as a result, would sell less albums, concert tickets, and merchandise. There is a difference between a few hours of offline use and, perhaps, even a couple of days in an extreme situation, but 30 days is most extreme – but again, that depends on whether or not Spotify has kept an accurate count of each and every offline play that has occurred, and whether such plays are covered by the streaming license..

            I may be completely mistaken and Spotify may have kept an accurate account of each and every offline play, however, it was a reasonable inquiry to make especially given the number of complaints of low payouts, and if it is found that they did not keep an accurate count of all of the offline plays, well, that is a different matter.

            I intended on raising the underlying issues regarding the music compositions, musical works and sound recordings, but I had to write this out twice because I inadvertently deleted it the first time with no other copy and it is now 5:10 am (EST) …

          • Hippydog

            Quote “One of the articles I consulted in order to get a better understanding of how the Spotify streaming service operates, namely, “10 Spotify Tips and Tricks” by Sam Costello, which explains some of the lesser known modes of operation of the service, cast doubt (see link below).”

            Cast doubt exactly how? nothing in that article reversed or even touched on the subject..

            a “Plays” counter has nothing to do with the ability of the service to track how many times a song was played in the app or software.. it just means they havent implemented a “play counter” in the GUI

            Quote “Especially in view of the fact that Spotify allows its 12.5 million paying subscribers to download up to 3,333 tracks per device for offline listening (and sharing) for up to 30 days before reconnecting to the internet, i.e., Spotify.”
            [snip]
            and an artist would be entitled to further “royalties and other monies.

            you can keep calling it a “download” all you like.. in reality its a “cache” which means it can stay under the same copyright rules as a “stream” ..

            Another way to look at it is the music is “leased”. when a user stops using the streaming service they also lose the ability to play those songs.

            As to the whole concept of Spotify TRACKING OFFLINE PLAYS. I can not (as yet) find a DIRECT reference where they say they do this.. I would either need to ask them directly (and believe they are telling the truth), or their software would need to be gone thru and see if the # of plays was tracked..

            All I am going by is they HAVE said they go by number of plays, they DO track those plays, and at NO TIME did they exclude the cached songs ..
            (from a software standpoint there would be no reason why they wouldnt include this functionality)

          • Hippydog

            As per
            https://pyspotify.mopidy.com/en/latest/

            I just did a quick check, an actual programmer could most likely give a more definitive answer..
            but it seems the ability to report if a song has been played or not (even offline) ‘seems’ to be available in the API..
            If its even being used I dont know..
            maybe try asking spotify this question directly.?

          • Lyle David Pierce, III

            Thank you for your reply. At the outset I will do my best to be more clear. The article I made reference to, namely, “10 Spotify Tips and Tricks” by Sam Costello”, outlined some of the lesser known features available on Spotify. There are three sections in particular that I utilized for the purpose of garnering a better understanding of the inner workings of Spotify without actually subscribing; those three sections are “Listen to Music Offline,” Add Functionality with Spotify Apps” and “Create Collaborative Playlists with Friends.” I will first quote the specific information within those three sections that I believe is relevant, at least in part, to the issues that I raised in my previous comments, I will then explain why I believe that information is germane to those issues.

            Listen to Music Offline – “Spotify downloads these songs to your computer. Once the music is downloaded, a green arrow appears next to the playlist that’s available offline.”

            Add Functionality with Spotify Apps – “The basic functions of Spotify include ways to find, listen to, and share music.”

            Create Collaborative Playlists with Friends – “3. In the playlist, click Share and then share it with friend or friends you want to collaborate with (needless to say, those friends need Spotify accounts).”

            Though I have “highlighted” specific information within those three sections, please know that I relied on all of the information in the article.

            Firstly, in view of the fact that the 12.5 million paying subscribers (as well as the more than 50 million active users) do not own the tracks accessed through Spotify, although the 12.5 million subscribers (as well as the more than 50 million active users) accessed the tracks through Spotify as many times as they desired through either the Premium tier (as well as the ad-supported Free tier) platforms, I assert based on the representations of Spotify CEO Daniel Ek, among other things, that Spotify is required to pay for each and every play accessed through Spotify. Spotify CEO Daniel Ek made clear that each and every “stream – or listen”[1] is “one person playing one song one time”[1] whilst further claiming that “we license and pay for every song we’ve ever played,”[2] “and we’re paying them for every single listen.”[3] Obviously, though I agree that each and every “stream – or listen” is “one person playing one song one time,” I adamantly disagree with the further claim.

            [1] “First of all, let’s be clear about what a single stream – or listen – is: it’s one person playing one song one time.” Daniel Ek blog post, November 11, 2014.

            [2] “[W]here we license and pay for every song we’ve ever played[.]” Daniel Ek blog post, November 11, 2014.

            [3] “[A]nd we’re paying them for every single listen.” Daniel Ek blog post, November 11, 2014.

            As you are aware, I have previously stated that the value of ensuring that an accurate count of the number of times each and every track has been played offline (as well as streamed online) on a device and/or computer so that “the artist” and “other rights holders” receive their just entitlements cannot be emphasized enough. Especially in view of the fact that Spotify allows its 12.5 million paying subscribers to download up to 3,333 tracks per device for offline listening (and sharing) for up to 30 days before reconnecting to the internet, i.e., Spotify.

            That, in view of Spotify’s Royalty platform and, in particular, part 2 thereof which provides:

            2. Artist’s Spotify streams divided by total Spotify streams

            This calculates an artist’s popularity on the service, their “market share.” Dividing an artist’s streams by the total streams on Spotify determines the percentage of our total pay-outs that should be paid for that artist’s rights.

            That I further stressed that an accurate accounting of the number of streams (and offline plays) is essential in order to determine the percentage of total payouts unless, of course, Spotify does not pay an artist for any of the offline plays of their 12.5 million paying subscribers who download up to 3,333 tracks per device for offline listening for up to 30 days before reconnecting to Spotify. While further suggesting that perhaps this is another reason why artist streaming payouts are so low.

            Though I made mention of offline listening (and sharing), what I did not point out is the fact that Spotify has previously announced that in addition to the 12.5 million paying subscribers (as well as more than 50 million active users), there are 1.5 billion playlists. See: https://news.spotify.com/us/2014/05/21/10-million-subscribers/

            I note in your last comment that you again make the distinction between “download” and “cache,” but in either case, what is clear is that the tracks and/or playlists are undoubtedly downloaded to a paying subscribers device(s) and/or computer(s) so that the tracks and/or playlists can be played offline. The section I refer to is “Listen To Music Offline” and, in particular, that “Spotify downloads these songs to your computer. Once the music is downloaded, a green arrow appears next to the playlist that’s available offline.” What is also clear is that a paying subscriber has the option to access the internet without connecting to Spotify for up to 30 days.

            What is not clear, however, is whether or not those tracks and/or playlists downloaded to a paying subscribers computer can be further shared offline with others either directly, or otherwise within a Spotify App, and played offline by either the paying subscriber and/or others. The section I refer to is “Add Functionality with Spotify Apps and, in particular, that “[t]he basic functions of Spotify include ways to find, listen to, and share music.” But see: http://www.engadget.com/2014/11/14/soundrop-spotify-app-platform-death/

            Furthermore, whether or not those tracks and/or playlists downloaded to a paying subscribers computer can be shared offline, and played offline with any one of the more than 50,000,000 active users either directly, or indirectly as part of a Collaborative Playlist. The section I refer to is “Create Collaborative Playlists with Friends” and, in particular, “[i]n the playlist, click Share and then share it with friend or friends you want to collaborate with (needless to say, those friends need Spotify accounts).”

            Your first reaction might be to point out that the quoted particular clearly states that “those friends need Spotify accounts” so, in anticipation of that possibility, I ask that you view that particular statement in the context of an offline playlist shared by a Spotify paying subscriber with a Spotify active user, or otherwise in a Spotify App or Collaborative Playlist – a Spotify App is a Spotify account is it not? And as I am not sure whether or not a track and/or a playlist shared in a Spotify App is restricted to the Spotify paying subscribers or active users or whether such Spotify Apps also allow others to play those tracks or playlists, perhaps you know the answer to that question? Again I ask you to view that particular statement in the context of an offline playlist shared by a Spotify subscriber with a Spotify active user especially given the fact that there are 1.5 billion of these playlists. If, for example, a Spotify active user were to play an offline playlist shared by a Spotify paying subscriber, would that play be accounted for as the playlist itself is offline? If that is possible, and the offline plays have not been accounted for, I can just imagine how many offline plays have not been accounted and paid for, as well as not added to the number of streams for purposes of Spotify’s Royalty formula in order to determine, among other things, artist payouts. Though you may think I am grasping at straws, in light of the fact that there are a significant number of claims that payouts are so low, I would rather be mistaken than to leave any stone left unturned in trying so understand why that is so.

            The matters discussed above raise another interesting issue as to whether or not the tracks that have been previously purchased by a Spotify paying subscriber strictly for personal use from a digital download service such as Google Play or iTunes and downloaded to a paying subscribers device and/or computer can be, or have been included within a Spotify playlist, a Spotify App and/or a Collaborative Playlist and shared offline with others and played offline. The section I refer to is “Listen to Your Music Library Using Spotify” and, in particular “[t]he Library shows all the music available to you in Spotify, mixing together playlists you’ve created in Spotify and the music from your computer’s music library, such as iTunes.”

            As fate would have it, as I was reviewing the article, I noticed a comment recently posted on the article by a person known as “Fanny” which is as follows: “Hi, I transfer[r]e[d] my windows library to spotify but I cant listen to the songs on my phone! It says that I need to synce it, but I dont know how. Please help!” That comment in particular raises another interesting issue regarding situations where a particular song is not available in a particular country (presumably for reasons such as licensing) and Spotify has located an alternate version that is available and will play the alternate version instead. The section I refer to is “Listen to Your Music Library Using Spotify” and, in particular “[t]hat means that a particular version of the song isn’t available in your country, but Spotify has found an alternate version that is available and will play that.” The first question that arises in my mind is where did Spotify find the alternate versions and, secondly, what method was utilized in determining whether or not those alternative versions are legally available.

            As I was writing the antecedent paragraph a thought “popped” into my mind which is as follows: As most people, if not all, are aware that digital piracy has plagued the music industry for well over a decade, it is very reasonable to conclude that a significant number of those persons that have flocked to Spotify have, or at one time had engaged in digital music piracy. Accordingly, it is very reasonable to conclude that a vast number of Spotify users, both paid and active, have legal digital downloads, as well as illegal digital downloads mixed together in their music libraries, which, the more I think about it, betrays a certain sense of irony – “savvy?”

            As I am neither a computer technician nor do I have an intimate background with matters such as digital piracy and torrent site operations and therefore do not have either the requisite skills or the life experience to know the difference between a legal digital download and an illegal digital download, I am unaware as to whether or not Spotify CEO Daniel Ek and his cohorts have implemented a means by which to sort through the digital music files in a Spotify users music library so as to differentiate the bona fides from the mala fides before allowing the digital tracks in a Spotify users music library to be either, in the words of “Fanny,” “transfer[r]e[d] to Spotify”, or otherwise to be “synched” with Spotify’s “cache,” and/or included within a Spotify playlist, a Spotify App and/or a Spotify Collaborative Playlist and shared with others either offline or online for that matter. In such circumstances, who would you send the DMCA Notice to if there was a copyright issue with one, or all of the tracks contained in one of those 1.5 billion playlists? If Spotify has not implemented a means by which to sort through the digital music files in a Spotify users music library so as to differentiate the bona fides from the mala fides before allowing the digital tracks in a Spotify users music library to be either, in the words of “Fanny,” “transfer[r]e[d] to Spotify”, or otherwise to be “synched” with Spotify’s “cache,” and/or included within a Spotify playlist, a Spotify App and/or a Spotify Collaborative Playlist and shared with others either offline or online for that matter, in light of the very real possibility that those 1.5 billion playlists may contain a significant number of illegally downloaded digital downloads, it is necessary that the tracks contained in those playlists must be “boarded and searched” immediately to ensure compliance especially when one considers that those playlists have been shared on a vast number of social media sites such as Facebook and Twitter, among others, as well as to protect the reputations of the major record labels whom I am sure would not want to be associated with the taint of such a possibility not to mention other corporations such as Viacom, MTV, VH1, Uber, Snapchat and others – but I believe that I must further emphasize that I do not understand how even a legally purchased digital download from a digital download service such as Google Play and iTunes for personal use can be shared with the masses in any event – a practice obviously encouraged by Spotify CEO Daniel Ek and his organization given the 1.5 billion Spotify playlists that have been posted to many social sites and shared globally – a practice that I vehemently disagree with for obvious reasons, in addition to reasons yet to be revealed.

            As I do not know for certain what Spotify meant after “Fanny” “transfer[r]e[d] the windows library” when it was said “that [“Fanny”] need[s] to synche it” before “Fanny” could listen to the songs. I ask that you please forgive my ignorance in that regard, however, it seems to me to be something like this – if Spotify is either the main vessel or the “cache” and the “synch” is a distinct vessel attached to either the main vessel or the “cache”, that would mean that if the pirated goods are found to be either in the main vessel or the “cache” that there would be liability, furthermore, even if the pirated goods are not found to be either in the main vessel or the “cache”, but were otherwise found to be in a distinct vessel attached to the main vessel or the “cache,” that the captain and his cohorts would incur liability. If I have improperly grasped the concept, your assistance to better understand would be much appreciated, thank you.

            Admittedly, I did go off on a bit of a tangent there but, nevertheless, it further buttresses the importance of ensuring that each and every online play, as well as offline play have been accounted for obvious reasons, in addition to reasons yet to be revealed.

            As for your comment that:

            “As to the whole concept of Spotify TRACKING OFFLINE PLAYS. I can not (as yet) find a DIRECT reference where they say they do this.. I would either need to ask them directly (and believe they are telling the truth), or their software would need to be gone thru and see if the # of plays was tracked.. All I am going by is they HAVE said they go by number of plays, they DO track those plays, and at NO TIME did they exclude the cached songs..[..]”

            I offer the following thought. I wonder what the overall effect of Spotify allowing its 12.5 million Spotify paying subscribers, and more than 50 million active users to include the tracks contained in their computer libraries in the 1.5 billion playlists has had on the payouts whether such were shared online or offline which speaks to the issue of whether or not Spotify is an effective business model legal issues notwithstanding?

            In light of Spotify CEO Daniel Ek’s statement that “[w]e will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as [“]a leader[“] in this industry; and it’s the right thing to do”, perhaps, they will allow a team of forensic auditors to do a complete audit of their systems to ensure that, among other things, all offline plays have been accounted for – if only because it’s the right thing to do.

          • Lyle David Pierce III

            You may wonder why I have devoted so much time and effort to try and understand why, among other things, streaming payouts are so low, well, without going into too much detail at this juncture as to the issues raised in my previous comments, I will further state the following:

            In the November 11, 2014 blog post of Spotify CEO Daniel Ek, he mentioned the names of two recording artists in particular which left me with no other alternative but to dispute his public statements especially with regard to licensing. The names of those two recording artists are Lana Del Rey and Ariana Grande. Why would mentioning the names of those two particular recording artists compel me to respond publicly to those statements you ask? I responded to those statements because I too am a songwriter in that I composed the music for “Lana Del Rey – Ultraviolence” and “Ariana Grande – My Everything.”

            To avoid any confusion in this regard, it is necessary that I explain in further detail. Regarding “Lana Del Rey – Ultraviolence,” I am not referring to the original version of Ultraviolence that was produced by Dan Auerbach released on June 13, 2014 by UMG Recordings, Inc. I am referring to the new version which is currently being sold through iTunes and Google Play. If there be any doubt in your mind as to the veracity of this statement, simply acquire a physical copy of the original June 13, 2014 release, and a copy of the new version currently being sold through iTunes and Google Play, and compare the two versions – the notes do not lie.

            Regarding “Ariana Grande – My Everything,” the facts are not so easy to verify regarding this album however for the simple fact that although the lead single “Problem ft. Iggy Azalea” was released on April 28, 2014, and the second single “Break Free” was released on July 2, 2014, the album was subsequently released on August 22, 2014 by Republic Records so, although there is a studio recording, there is not a previously released physical album to compare the original version with the new version as there was with “Lana Del Rey – Ultraviolence.” Although the work that I did on “Problem ft. Iggy Azalea,” and “Break Free,” was done prior to the August 22, 2014 release date, I completed my work soon thereafter.

            To be sure, there are a significant number of musical compositions that are ascribable to me, and though too numerous to mention them all at this juncture, I will list but a few which can be compared simply by acquiring a physical copy of the original releases, and a digital copy of the new versions currently being sold through iTunes and Google Play, or otherwise streamed on YouTube.

            Taylor Swift – Red: Deluxe Edition (originally released 2012): “The Moment I Knew”;
            Taylor Swift – 1989 (originally released 2014): “Shake It Off (in part)”;

            Katy Perry – Teenage Dream (originally released 2010): “E.T. ft. Kanye West”;
            Katy Perry – Teenage Dream (originally released 2010): “Teenage Dream”;
            Katy Perry – Prism (originally released 2013): “Dark Horse ft. Juicy J”;

            Beyoncé – Dangerously In Love (originally released 2003: “Crazy In Love ft. Jay-Z”;
            Beyoncé – I Am… Sasha Fierce (originally released 2008): “Single Ladies (Put A Ring On It)”;
            Beyoncé – Beyoncé (originally released 2013): “Drunk In Love ft. Jay-Z”;

            Rihanna – Good Girls Gone Bad (originally released 2007): “Umbrella ft. Jay-Z”;
            Rihanna – Loud (originally released 2010): “Only Girl (In The World)”;
            Rihanna – Unapologetic (originally released 2012): “Stay ft. Mikky Ekko”;

            Shakira – Listen Up! The Official 2010 FIFA World Cup Album (originally released 2010): Waka Waka (This Time For Africa) ft Freshlyground;
            Shakira – Shakira (Brazil 2014 Version, originally released 2014): “Dare (La La La) ft. Carlinhos Brown”;
            Shakira – Shakira (originally released 2014): “Can’t Remember To Forget You ft. Rihanna”;

            Jessie J – Who Are You (originally released 2011): “Do It like a Dude (Explicit)”;
            Jessie J – Who Are You (originally released 2011): “Nobody’s Perfect”;
            Jessie J – Sweet Talker (originally released 2014): “Bang Bang ft. Ariana Grande and Nicki Minaj”;

            Lady Gaga – The Fame Monster (originally released 2009): “Bad Romance”;
            Lady Gaga – Born This Way (originally released 2011): “Judas”;

            Iggy Azalea – The New Classic (originally released 2014): “Black Widow ft. Rita Ora”;
            Iggy Azalea – The New Classic (originally released 2014): “Fancy ft. Charli XCX”;

            Charli XCX – True Romance (originally released 2013): “You (Ha Ha Ha)”;
            Charli XCX – The Fault In Our Stars Movie Soundtrack (originally released 2014): “Boom Clap”;
            Charli XCX – Sucker (yet to be released): “Break The Rules”;

            Marina and the Diamonds – Elektra Heart (originally released 2012): “Sex Yeah”;
            Marina and the Diamonds – Elektra Heart (originally released 2012): “How To Be A Heartbreaker”;
            Marina and the Diamonds – Elektra Heart (originally released 2012): “Prima Donna.”

            It is noteworthy that I have neither released nor assigned, among other things, my original compositions to a publisher, or any other organization, and I do not have a contract, written or otherwise, with a record label, yet I have received neither credit for my work or financial compensation, therefore, I can genuinely empathize with the plight of the songwriters because I know how it feels to be slighted and treated unfairly to say the least.

          • Lyle David Pierce III

            CORRECTION: Taylor Swift – 1989 (originally released 2014): “Shake It Off”;

          • Lyle David Pierce III

            To whom it may concern:

            At the outset, I wanted to address a matter or two before further touching upon some of the other issues which have been raised, or otherwise suggested in my prior posts which is the very important matter of credibility. Indeed, if the subject matter, the content of a writer’s work are not perceived as credible in the eyes of the readership, it would not make sense to further elucidate upon the same in order to bring the issues raised, or otherwise suggested into sharper focus.

            The matter or two to which I refer is regarding the “tangent” that I previously spoke to in my post dated November 16th, 2014. Though I rely on the content of that post in totality, I now refer to two excerpts so as to narrow the focus of the subject matter of this particular post:

            “I am unaware as to whether or not Spotify CEO Daniel Ek and his cohorts have implemented a means by which to sort through the digital music files in a Spotify users music library so as to differentiate the bona fides from the mala fides before allowing the digital tracks in a Spotify users music library to be either, in the words of “Fanny,” “transfer[r]e[d] to Spotify”, or otherwise to be “synched” with Spotify’s “cache,” and/or included within a Spotify playlist, a Spotify App and/or a Spotify Collaborative Playlist and shared with others either offline or online for that matter.”

            Presumably, the quick answer to that question would be that Spotify utilizes Gracenote music recognition technology (see link below) and, therefore, the digital tracks in a paying subscriber’s “library” or an active user’s “library” cannot be transferred (see link below) to Spotify’s “Your Music” (see link below) because the meta tags are unrecognizable for reasons such as copying (burning/ripping music), they were illegally acquired from torrent sites such as The Pirate Bay and uTorrent and/or Spotify does not have the rights to those digital tracks. Most, if not all, of those digital tracks will appear “greyed out in “Your Music,” with no hyperlinks to the artist or album and cannot be accessed or shared which on the face of it seems innocent enough.

            http://www.gracenote.com/music/recognition/
            https://support.spotify.com/us/learn-more/guides/#!/article/Listen-to-local-files
            https://support.spotify.com/us/problems/#!/article/what-is-your-music

            However, if you look a little deeper, you will find that there is a quick and easy way to add those digital tracks to “Your Music” that could not be included initially for reasons such as those stated above.

            The article “How to Sync Your Entire iTunes Library to Spotify’s New ‘My Music’ Section” by Nelson Aguilar (see link below) and, in particular, “Step 5: Transfer Over the Rest of Your Music with iTunes Playlists” thereof, you will see the steps by which those digital tracks that could not be initially transferred to “Your Music” because the meta tags are unrecognizable due to reasons such as copying (burning/ripping), digital piracy (see link below) and/or Spotify does not have the rights to those digital tracks can be transferred to “Your Music” and thereby accessed and shared. Interestingly, although the article showed how to sync a users iTunes library, a user could utilize the same process to sync all of the downloads on a users computer (see: “Step 2: Open Spotify & Go to Local Files).

            http://digiwonk.wonderhowto.com/how-to/sync-your-entire-itunes-library-spotifys-new-my-music-section-0154478/
            http://www.ifpi.org/music-piracy.php

            It is worthy of note that in “Step 3: Transfer Local Files Over to Your Music” the illustration strongly suggests that this particular individual is an “active music lover” in that this user has 13,999 digital tracks that are being transferred over to “Your Music” in the article demonstration to be included within a Spotify playlist, a Spotify App and/or a Spotify Collaborative Playlist for further online and offline sharing.

            And, of course, once those digital tracks are “anywhere in Spotify,” they can be, among other things, shared.

            https://support.spotify.com/us/learn-more/guides/#!/article/Save-your-music-with-Playlists
            https://support.spotify.com/us/learn-more/guides/#!/article/Create-playlists-with-your-friends
            https://support.spotify.com/us/learn-more/guides/#!/article/sharing-music

            There are over 1.5 billion Spotify playlists that are being shared exponentially by over 12.5 million Spotify paid subscribers, as well as millions of active users. Even if one were to assume for purposes of discussion that the offline plays have been counted (a proposition that I seriously doubt), if the digital tracks that have been added to “Your Music” in the manner shown above do not have the proper meta data to be counted in any event, it cannot be reasonably stated that each and every play has been counted and paid for and therefore on the face of it, Daniel Ek’s statement that each and every play and listen has been paid for is demonstratively false and the “red flags” are flying. Moreover, it has been reasonably shown that there exists a very real possibility that a significant number of the 1.5 billion Spotify playlists have been tainted in whole, or in part, by the mala fides of piracy. For that reason, those 1.5 billion playlists must be removed, or access to them disabled and though there may be those who may think that to do so might be rather extreme, I simply state that in any event without the proper meta data to keep an accurate count of the number of plays (again, assuming that the offline plays were at all times being counted), and given the very real fact that those tainted playlists are being shared each and every day at an exponential rate, unless there is a way to remedy the situation in a wholesale and expeditious manner, it appears that Spotify is aiding and abetting the proliferation of piracy by means of its more than 1.5 billion playlists, as well as exacerbating an ever increasing loss of revenue for each and every play of a playlist, or portion thereof, that does not have the proper meta data. In this regard, it must be remembered that as the digital tracks are not owned by either Daniel Ek or Spotify, or its more than 12.5 million paid subscribers and millions of active users, that they are required to pay for each and every play or listen – “savvy?”

            Though the issues I raised, or otherwise suggested, may have seemed incredible at first blush, for the reasons offered in support of the same thus far, as well as those yet to come, it is my position that not only are they credible, they are very live issues. I end this particular post with this parting thought:

            The Requirements of the DMCA’S Affirmative Defense

            To be eligible for the safe harbour which excludes service-provider liability for copyright infringements in certain circumstances, three facts must be proven:

            That the acts complained of were infringements “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider”;

            that once it had “actual knowledge that the material or an activity using the material on the system or network [was] infringing” or that once “in the absence of such actual knowledge, it [became] aware of facts and circumstances from which infringing activity [was] apparent, it act[ed] expeditiously to remove, or disable access to, the material”; and

            that it did not receive “a financial benefit directly attributable to the infringing activity, in a case in which it had the right and ability to control such activity.”

  16. Anonymous

    Two easy steps to get Taylor Swift’s music on Spotify:

    1) Pirate Taylor Swift’s discography
    2) Import into your Spotify library

    Reply
  17. RlAA

    Streaming isn’t just the future, it is here now and it is poised to be #1 in 2015.

    At the current 28% growth rate,

    #1 Streaming: $2.5 billion (up 28%)
    #2 Download: $2.1 billion (down 12%)
    #3 Physical: $1.5 billion (down 14%)

    Reply
  18. Musicservices4less

    Doesn’t anyone question the business model of Spotify and many other music websites? I actually review and attempt to negotiate the agreements of Spotify, etc. all the time. I’ve said this before, every business should use the Spotify, etc. business model as you can never go broke no matter what your overhead is. If Spotify, etc. had one subscriber, they would stay in business. Doesn’t that sound strange to anyone? If my label had one sale it would be out of business. Why is Spotify, etc. so special? Does anyone want to take this question on?
    If you need it explained another way, I get to pay myself pretty much anything I want using investor money but if my business generates no money but still gives away millions upon millions of inventory (songs, masters) I get my salary and don’t have to pay the third party suppliers.
    Does anyone work in any other another business and get to do this?

    Reply
  19. MickeyMac

    I have no doubt that Mr. Ek loves the arts and artists – after all they are his meal ticket! It’s like a plantation owner in the old South saying he loves his slaves. He candidly admits that he’s making his $$$ on the artist’s backs. You have to look at the whole picture: people love the things (ie: arts and artists) they can exploit and make $$$ on – just like the fat cats who run the major labels. A big part of the problem is that THEY determine what the artists are paid – or did I miss the part about Mr. Ek lobbying Congress to raise payments to artists? Mr. Ek’s words are carefully chosen but he speaks with forked tongue: he does not love the arts or artists for their art and contributions to society; he loves them for the $$$ they put in his pocket. If he truly loved artists and their art for their own sake, he’d take steps to ensure that those artists are paid fairly – or at least a subsistence wage. Hell, at least the plantation owners made sure their slaves had food to eat, clothes to wear, and a roof over their heads. Welcome to capitalism, children!

    Reply
  20. Eric Campbell

    I’m a songwriter/producer who as always supported Spotify. If you check my previous posts, I’ve said a lot of what Daniel has finally said. I think his logic and math makes perfect sense (especially, the fact that you have to compare Spotify plays with radio spins if you want a truly fair comparison).

    In addition, radio also shoots down the argument that ad supported music is evil. The radio industry was created and still barely hangs on based on ad supported music. There is no paid subscription model for radio (unless you look at XM). Radio was able to take years and build a huge audience that made ads economically profitable. If streaming services are able to grow a similar audience, logic says, we’d see equitable payouts.

    My only issue with Daniel’s statement is that it took so long for him to make it. Sure, now Spotify is going to boast about transparency but why did it take Taylor Swift for him to address a very valid public concern about streaming services. He could have nipped a lot of this in the bud years ago by being a little more PR focused upfront.

    Reply
  21. NashVegas Ed

    What a load of crap! This guy must be a Republican. I work in the industry and have watched the digital revenues dwindle in the last 3 years. If Spotify is allowed to flourish, artists will lose the last viable revenue stream for their pre-recorded music. God bless Taylor Swift, Jason Aldean and every other artists who’ve pulled their music from the service!

    Reply
    • There is something...

      Bad news for you: Youtube just signed a deal with Merlin, meaning that their streaming service is about to come to life… Spotify is already old story now.

      Reply
  22. DJ Parker - CEO @ Boothnezzi

    Artists do get paid from radio plays IF that artist has BDS…and BDS pays more than Spotify. BDS has been around forever.

    bdsradio.com

    Reply
  23. Anonymous

    Itunes was doing just fine before streaming. Even with piracy.

    And itunes was paying a hell of a lot better than Spotify. I would prefer a future of piracy and itunes as a label owner. Unless we can skip to10 years from now when streaming MIGHT start paying the artist reasonably.

    Reply
    • Urban Guitar Legend

      I concur. You have a VERY solid point. People that don’t actually look at royalty statements don’t have a clue.

      Reply
  24. David O

    So we all get that streaming is here to stay, but there are so many holes in this guys arguments that it’s laughable…or would be if it wasn’t so said. Whose to say that if people couldn’t hear music for free on a streaming service they might not go out and buy it? His inescapable bottom line “fact” is nonsense. Radio and television pay performance license fees. Record companies pay mechanical license fees. TV pays synch fees. Artists get paid to perform. What is Ek getting paid annually?

    Reply
  25. hippydog (site still will not let me log in)

    Quote “Canada is a great example, because it has a mature music market very similar to the US. Spotify launched in Canada a few weeks ago. In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else.

    If Spotify is cannibalising downloads, who’s cannibalising Canada?”
    .

    Good point..
    I like how NO ONE is coming up with a rebuttal on that one..

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      C’mon, are we seriously entertaining this question? It’s designed for people who have no idea what the music space looks like. It’s a talking point for the uninformed.

      Reply
      • hippydog

        How many posts have gone on about “windowing” and “cannibalizing sales”?
        so ya..
        I’m serious..
        If two countries end up with basically the same downward trends yet one barely had streaming..
        kinda makes it tough to blame everything on the streaming..

        just throwing the thought out there…

        Reply
      • GGG

        What’s the reason then? Or, since you don’t know, why is it a question we should ignore?

        Reply
  26. JAIO

    unbelievable.

    all. of. it.

    just. unbelievable.

    99% of you haven’t got a clue, because you don’t work behind the scene. The 1% of you who actually do may have some grip at the table, but most of y’all really just are spouting your own personal interests without actually KNOWING EXPERIENTIALLY what the hell it is you’re talking about.

    I hate this place sometimes. I really do.

    Reply
    • steveh

      This place is also full of ranters who think they know it all – rather like you in fact.

      I, for one, certainly do know what I’m talking about when I make a comment.

      The question is do you? Do you actually know what you’re talking about (or ranting about)?

      Reply
      • JAIO

        This place is also full of ranters who think they know it all – rather like you in fact.

        I, for one, certainly do know what I’m talking about when I make a comment.

        The question is do you? Do you actually know what you’re talking about (or ranting about)?

        Not on this subject I don’t. But on those I do write knowledgeably about, yes I do. I’ve earned a middle class living in this industry since the late 70s in many areas. I don’t actually comment on things I have had no direct experience or professional education in. Unless I’m just being a pain in the ass for that purpose alone. 😉

        Reply
  27. ConcernedMusician

    Dear Spotify,

    On an annual basis how many of your FREE subscribers convert into PAYING subscribers?
    Can you provide us all with some current conversion statistics? Worldwide numbers are fine.

    Thank you.

    Signed
    Concerned Musician

    Reply
    • Pete

      The fact that anyone is complaining about making a little less than $500,000 a year doing what they love is asinine.

      Reply
  28. Musician Who Wasn't Born Yesterday

    That analogy of radio plays versus Spotify streams was one of the greatest deflections stopping just shy of obfuscation I have ever seen in my life. Who ever actually wrote that deserves a Pulizter… that is, if they gave one out for bullish*t.

    Reply
  29. FarePlay

    I’m having a hard time seeing any similarity between Steve Jobs and Daniel Ek. In fact, I don’t see it at all. The only thing I give Ek credit for is having the confidence and the ability to get all the money to keep this Napster retread alive.

    Did I read somewhere that Spotify had a 10 billion dollar valuation? Unbelievable, seriously, unbelievable.

    I don’t think he’d get a dime from Shark Tank.

    Reply
    • Anonymous

      Business acumen aside, Steve Jobs was simultaneously a giant asshole and a rotten piece of shit. You can stop worshiping him now.

      Reply
  30. Anonymous

    It’s official: YouTube Music Key opens on Monday. Nothing else matters.

    All Spotify discussions can stop now, thanks. 🙂

    Reply
  31. industry Manager

    In regards to the commenter stating artists receive royalties from radio (terrestrial) spins, you don’t know this business. Artists/Labels DO NOT receive payment in the U.S. but do around the world for radio spins (except for a few w/ direct licensing deals – more below). SONGWRITERS receive payments. Now, if said artist is credited (and i do stress credited due to most taking credit and publishing for doing absolutely nothing) then he/she will receive royalties paid out through the PRO’s.

    Now there are a few exceptions with indie labels who’ve signed direct licensing deals such as Big Machine, Glassnote and BBR with broadcasters. The U.S. is the only country in the world where the artist/label aren’t paid for spins without these direct deals. This has been a major point of contention with radio and one that has seen radio Cox, Iheart Media (formerly Clear Channel) begin to soften its stance and do deals to avoid any possible legislation/rate court that may set an industry wide rate.

    BDS is used to detect and track spins.

    Reply
  32. Sergio Cervetti

    Piracy may not pay us composers but you, Spotify pay us so little that there is practically no difference.
    I get a penny for each time my song is played. At this rate In the year 5689 I will be rich!

    Reply
      • an

        Completely fucking irrelevant. Asshole. Go steal from your grandmother. Multiplying zero by infinity more plays is still zero. Fucking retarded entitled piece of shit

        Reply
    • GGG

      If you’re looking at your statements thinking you’re getting a full penny a play, that’s your problem…you’re getting less.

      Also, no offense, but your music isn’t exactly in high cultural demand right now. You probably WOULD be better off taking your music off, assuming people actually want your music enough to buy it. If not, might as well stream it.

      Reply
  33. funn

    Just to be clear– They will not and have no intention of changing the business model. Rather, they continue to justify rates. Listen, what he says is impossible is NOT impossible. For 12 painstaking years we have heard the cries from consumers, labels, artists, indies, writers and publishers. Bottom line is this– they (as with all similar services) will pay roughly $0.02 PER HOUR. Funn will be generating $1.00 PER HOUR IN REVENUE while eliminating consumer nuisances. Nuff said.

    Reply
  34. jj

    Two numbers: Zero and Two Billion.

    Oh, fukk off Danny Ek… The main reason for the “zero” in that equation is from your BitTorrent piracy machine, and now you’re using that as a gun to the head of artists? What a great and nobel business model [/sarcasm]
    ‘either do business with us, or we’ll help rob you blind’ You fucker, stay out of the music biz, there’s quite enough creeps already, thanks..

    Reply
  35. Lyle David Pierce III

    Though this post is particularly apt for the underlying issues raised herein, it is also relevant to the DMN post regarding Flo & Eddie Inc. v. Sirius XM Radio Inc., et al., as well as the Irving Azoff posts, et cetera, et cetera:

    “B. Copyright Protection Granted to Sound Recordings

    Before 1971, the musical compositions embedded in a recording were subject to copyright. However, the actual recording as embodied in a phonorecord was not. The sound recording only had protection under state law. Thus, a songwriter would receive the benefit of a federal copyright protection for his or her songs. But the performing artist who recorded these songs would receive none, and nor would the producer or record company.

    With growing concerns about record piracy and the substantial revenues lost by the recording industry as a result, Congress passed the Sound Recordings Act of 1971 (hereinafter “1971” Act”). This amendment added sound recordings to the 1909 Act as copyrightable works of protection, declaring that “copyrightable work comprised of the aggregation of sounds ” is “clearly within the scope of ‘writings of an author’ capable of protection under the Constitution.” This protection was the result of more than ten years’ discussion between the record industry and Congress.

    The right granted in sound recordings was, and still is, fairly limited as compared to other protected works of authorship. Because Congress acknowledged that their primary concern was the proliferation of pirated records and cassettes, the protection afforded a right for infringement against only the illegal distribution or physical reproduction of these works. They explicitly declared that there is no copyright infringement where a sound recording is independently created by another, even if it is intended to and does sound like another recording. Further, no right was given for a public performance, one of the most lucrative streams of revenue for composers of musical compositions.

    Congress’s House Report provides some guidance as to who is an author of the work, noting that “performers, arrangers, and recording experts are needed to produce [a] finished creative work in the form of a distinctive sound recording. They further said that the copyrightable elements will usually involve authorship on the part of the performers (notably, they took no position as to which performers), and the “record producer responsible for setting up the recording sessions, capturing and electronically processing the sounds, and compiling them and editing them to make the final sound recording. They elaborated on the producer’s role, noting that in some cases that the contribution is so minimal that the performance is the only copyrightable element in the work, and in others the producer’s contribution is the only copyrightable expression.

    The Copyright Office’s discussion of sound recordings also recognizes authorship in the performers and producers and producer, advising that “generally, copyright protection extends to two elements in a sound recording: (1) the contribution of the performer(s) whose performance is captured and (2) the contribution of the person or persons responsible for capturing the sounds to make the sound recording. But neither Congress nor the Copyright Office has taken a position on which performers on a sound recording can claim authorship. Ultimately, Congress decided not to make a final determination of the issue, leaving it to “the employment relationship and bargaining among the interests involved.” In other words, authorship in the sound recording is to be a matter of contract.

    The classification of a sound recording is conceptually difficult, because it is distinguished both from the underlying musical compositions (if any) and the phonorecord in which it is embodied. The 1971 Act defines a sound recording as:

    a work that results from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied.

    The author of a musical composition, therefore, would retain rights independent of those in the sound recording. Authors of musical compositions have received the benefit of copyright protection for over a century, and Congress has deemed it not necessary to define a musical work. The authors of work are generally the composer(s) of the music and the composer(s) of the lyrics, and defining authorship as such is not as controversial an issue. Vocalists, musicians, and producers can claim a copyright in the underlying musical work only if they composed the material.

    The “phonorecord,” however archaic that the term might sound, refers to the actual physical embodiment of the sound recording. These are “material objects in which sounds … are fixed by any method now known or later developed, and from which the sounds can be reproduced, otherwise communicated, either directly or with the aid of a machine or device. The phonorecord is generally in the form of a vinyl record, audiocassette, or compact disc. It is not in itself copyrightable.” [Footnotes omitted.]

    Mark H. Jaffe, Defusing The Time Bomb Once Again – Determining Authorship In A Song Recording, 601 J. COPYR. SOC’Y (2005): https://torekeland.com/wp-content/uploads/2012/05/Defusing-the-Time-Bomb-Once-Again.pdf

    A careful step by step review below of that which has been quoted above will help foster greater insight:

    “Before 1971, the musical compositions embedded in a recording were subject to copyright.”

    “However, the actual recording as embodied in a phonorecord was not.”

    “The sound recording only had protection under state law.”

    “Thus, a songwriter would receive the benefit of a federal copyright protection for his or her songs.”

    “But the performing artist who recorded these songs would receive none, and nor would the producer or record company.”

    “With growing concerns about record piracy [52] and the substantial revenues lost by the recording industry as a result, Congress passed the Sound Recordings Act of 1971 (hereinafter ‘1971 Act’).”

    “[52] Piracy results from the unauthorized DUPLICATION of sound recordings.”

    “This amendment added sound recordings to the 1909 Act as copyrightable works of protection, declaring that ‘copyrightable work comprised of the aggregation of sounds’ is ‘clearly within the scope of ‘writings of an author’ capable of protection under the Constitution.'”

    “This protection was the result of more than ten years’ discussion between the record industry and Congress.”

    “The right granted in sound recordings was, and still is, fairly limited as compared to other protected works of authorship.”

    “Because Congress acknowledged that their primary concern was the proliferation of pirated records and cassettes, the protection afforded a right for infringement against only the illegal distribution or physical reproduction of these works.”

    “They explicitly declared that there is no copyright infringement where a sound recording is independently created by another, even if it is intended to and does sound like another recording. [59]”

    “[59] Id. [HOUSE REPORT, supra note 53, at 1567.] See also Bridgeport Music, Inc. v. Dimension Films, 383 F.3d 390, 398 (6th Cir. 2004). The performer of that independently created sound recording would need a compulsory license for the underlying musical composition. See 17 U.S.C. § 115 (2000). If the performer had not secured one (or did not comply with the provisions of the compulsory license), that artist is infringing the musical composition. But so long as the music was independently created, under no circumstance is there an infringement of the sound recording.” [SEE ALSO Cal. Civ. Code § 980(a)(2); and, 17 U.S.C. § 114(b).]

    “Further, no right was given for a public performance, one of the most lucrative streams of revenue for composers of musical compositions. [60]”

    “[60] See Kettle, supra note 51. A performance right was granted for digital transmissions of sound recordings under the Digital Millennium Act. See infra note 105 and accompanying text.”

    “Congress’s House Report provides some guidance as to who is an author of the work, noting that ‘performers, arrangers, and recording experts are needed to produce [a] finished creative work in the form of a distinctive sound recording.'”

    “They further said that the copyrightable elements will usually involve authorship on the part of the performers (notably, they took no position as to which performers), and the “record producer responsible for setting up the recording sessions, capturing and electronically processing the sounds, and compiling them and editing them to make the final sound recording.”

    “They elaborated on the producer’s role, noting that in some cases that the contribution is so minimal that the performance is the only copyrightable element in the work, and in others the producer’s contribution is the only copyrightable expression.”

    “The Copyright Office’s discussion of sound recordings also recognizes authorship in the performers and producers and producer, advising that “generally, copyright protection extends to two elements in a sound recording: (1) the contribution of the performer(s) whose performance is captured and (2) the contribution of the person or persons responsible for capturing the sounds to make the sound recording.”

    “But neither Congress nor the Copyright Office has taken a position on which performers on a sound recording can claim authorship.”

    “Ultimately, Congress decided not to make a final determination of the issue, leaving it to “the employment relationship and bargaining among the interests involved.'”

    “In other words, authorship in the sound recording is to be a matter of contract.”

    “The classification of a sound recording is conceptually difficult, because it is distinguished both from the underlying musical compositions (if any) and the phonorecord in which it is embodied.”

    “The 1971 Act defines a sound recording as:

    a work that results from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied.”

    “The author of a musical composition, therefore, would retain rights independent of those in the sound recording.”

    “Authors of musical compositions have received the benefit of copyright protection for over a century, and Congress has deemed it not necessary to define a musical work. [71]”

    [71] See H.R. Rep. No. 94-1476 (1976). In this article, the term “musical work” is used interchangeably with “musical composition[.]” [NOTE: Though the article may use those two terms loosely, they are not the same.]

    “The authors of work are generally the composer(s) of the music and the composer(s) of the lyrics, and defining authorship as such is not as controversial an issue.”

    “Vocalists, musicians, and producers can claim a copyright in the underlying musical work only if they composed the material.”

    “The “phonorecord,” however archaic that the term might sound, refers to the actual physical embodiment of the sound recording.”

    “These are “material objects in which sounds … are fixed by any method now known or later developed, and from which the sounds can be reproduced, otherwise communicated, either directly or with the aid of a machine or device.”

    “The phonorecord is generally in the form of a vinyl record, audiocassette, or compact disc.[74]”

    “[74] Sound recordings, before the Internet, were nearly always embodied on a vinyl record, audiocassette, or compact disc….”

    “It is not in itself copyrightable.” [Emphasis supplied.]

    Reply
    • Lyle David Pierce III

      Errata:

      1. “Mark H. Jaffe, Defusing The Time Bomb Once Again – Determining Authorship In A Sound Recording, 601 J. COPYR. SOC’Y (2005)”;

      2. “The Copyright Office’s discussion of sound recordings also recognizes authorship in the performers and producer….”

      Reply
  36. Anonymous

    Do we have any data on how many times vinyl albums were borrowed and listened to by friends? Or for that matter, how many times people ripped radio shows from the radio or that said borrowed vinyl by pushing the little red circle on their tape players??

    digital media proliferates the ease of piracy. Spotify is a legal business that at least monitizes something.
    That said, if you as an artist are (rightfully) pissed about the licensing given to Spotify to pay you peanuts for the use of your content, then don’t sign bargains with those record labels doing this business with Spotify. How many pennies per play is a stream worth? Blame the labels who sign licenses against a freemium model that allow the economics to be the way they are. And make sure that when signing with Tunecore or CDBaby that if a major label ever decides to buy them, that doesn’t include your permission to transfer the license of your content.

    Reply
  37. royrogers

    “Myth number three: Spotify hurts sales, both download and physical.”
    “Downloads are dropping just as quickly in markets where Spotify doesn’t exist.”
    “In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else.”
    “If Spotify is cannibalising downloads, who’s cannibalising Canada?”

    Mr.Ek “forgot” to mention that others Streaming Services have been working in Canada since a couple of years. For instance : Rdio has been already working in Canada for 4 years. That’s the reason why download is getting hurt.

    Should we really believe in what this guy says?

    Reply
  38. XERXEESE

    I got ripped off 100,000 dollars and David c Lowery isn’t going away either until you pay him 600,000 that you owe him for “Low” You honestly stink. Get mad at the truth “rip-off” I am an indie musician and you stole my lunch money, you suck bully.

    Reply
  39. karl Anglin

    contact Zain at Expansion Capital Group
    about financing at (605) 809-8310
    I am Karl Anglin Independent Finance Broker

    Reply
  40. Pete

    That’s absurd. Ek is basically claiming that if people couldn’t get their music on Spotify, the only other route they’d take is piracy. I think there are plenty of people who have no problem paying $10 for a good album on iTunes or on a CD (yes I still like CDs). One of the major problems is people aren’t putting out albums worth buying. Maybe we should be focusing on how shitty the music is in the industry now and we can go from there.

    Reply

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