Spotify CEO Claims the Music Industry Would Be Dead Without Spotify

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Are streaming services helping the music industry grow, or having a harmful impact?

Streaming services are now enjoying unprecedented growth, though it’s been non-stop warfare with the music industry.  At the dawn of Apple Music in July of last year, Taylor Swift pulled her music based on a high-profile disagreement over payment.  Adele flatly refused to license Apple Music and Spotify.  Then, there was the Grammy fiasco last night, in which NARAS president Neil Portnow attacked streaming services like Spotify for not paying artists fairly.

All of which brings us back to the biggest industry question: are music streaming services harmful to the industry?

Spotify CEO Daniel Ek doesn’t seem to think so.  Actually, he thinks the exact opposite, and goes as far as taking full credit for pulling the music industry out of years of decline towards positive growth.  In a Q&A session on Quora, Ek claimed ample credit for a music industry recovery.  “Now, finally, after years and years of decline, music is growing again, streaming is behind the growth in music, and Spotify is behind the growth in streaming.”

Essentially, Ek is claiming that without Spotify, the music industry would be in a deep decline, if not totally dead.   And the basic premise behind this assertion is that by pumping money into the music industry, everyone is now benefitting.  But that analysis fails to consider what artists are getting paid for their work (if they’re getting paid at all).  After all, it’s the artists that are creating the music, and it’s the artists that are suffering the most alongside streaming’s growth.

For many artists, the benefits don’t seem to be trickling down.  Despite Spotify claiming that 70% of its revenue is paid back into the music industry and that it has paid in excess of $2 billion to the music industry since it was founded in 2008, many are still questioning who actually benefits.  According to reports, the cut that artists are getting works out less than half-a-penny a play, and artists are simply not satisfied.

And the biggest strikes are coming from superstars.  Shortly after Swift pulled her music from Spotify, superstars Adele and Prince amongst several others have followed suit.  Others like Lady Gaga have played along with Spotify, but ultimately complained.

The question is whether Spotify is actively addressing this issue, or simply spinning platitudes.  ”We love music, we love all the amazing people who make it, and we want to succeed together,” Ek continued.  But, artists are not really buying what Spotify is claiming.  If the streaming service wants artists to stay on board, they will have to re-examine their payment structures so it is viable for artists.  If not, it could seriously stunt the company’s future growth.

For now, Daniel Ek is promising pie-in-the-sky growth, saying that the company ”will give thousands and thousands of artists, songwriters, producers and so on the chance to do what they love, and their fans love, while being paid fairly for doing it”.

The question is, what is fair…?

 

 

(Photo by Kmeron, Creative Commons, Attribution 2.0 Generic, c by 2.0)

60 Responses

  1. Name2

    According to reports, the cut that artists are getting works out less than a penny a play,

    Few would argue that a fraction of a penny as a royalty from an old physical sale is beneath contempt. I’m mystified, however, by what dollar-and-cents figure people who post such things could POSSIBLY consider “fair”. It’s a listen, not a purchase.

    Reply
  2. Name2

    I spend $42/month on three streaming music services. If the people I listen to ain’t gettin’ paid, they need better muscle.

    I sleep at night.

    Reply
    • Anonymous

      Out of curiosity, what services? That’s quite a bit. I am guessing SiriusXM is one of them?

      Reply
    • Mungo

      How do you expect artists to outmuscle the world’s largest corporations, Apple, Google, Sony, Time Warner, and their powerful lobbying of the government that results in state-mandated pay-per-play rates?

      You may sleep well at night, but perhaps you would like it if the artists you are listening to could also sleep well due to having a viable career?

      Reply
    • Michael

      I wonder just how well you would sleep at night knowing that the job you go to next day makes you $0.01 / day.
      Sleep well hypocrite.

      Reply
      • Quentin

        If you’re only getting a penny a day via streaming then you better start making better music. Maybe you should start looking into a new job. Just saying.

        Reply
        • TyLean

          That’s a very black & white way to look at an extremely complex umbrella. First of all…. basic understanding of the numbers. To make an actual living from streaming… do you have any idea how many MILLIONS of streams you would need to be getting? About 10 million to earn what a teacher gets paid in a year. Do you know what kind of adverting muscle you need to achieve 10 million streams every year? (Of course, that would be for a solo artist. A whole band, much bigger numbers).

          Now… let’s consider those artists and bands who are well deserving of livable careers, but the very nature of their work is not going to lend them to 10 million streams a year. (Or 40 million for a band). Dream Theater comes to mind…. I don’t want to listen to Dream Theater in the background while I wash my dishes. I want to sit… enjoy… pay attention, but I have very little opportunity to do so, and when I do, they are far, FAR from the only band (and artists) I have to pick from. I might give one album by this particular band a dedicated listen once a year. Hypothetically, if I did so via streaming, how much would they make? A couple pennies maybe. They are worth much more than that.

          Reply
        • shoe

          maybe you should look into not being such a blatant ignoramus. just sayin’…

          Reply
  3. Anon

    Ridiculous.

    The reason that the majors like streaming is they are able to reap a little bit of money from ancient back catalog stuff without investing in new artists.

    For living musicians it’s an absolute disaster.

    Reply
  4. Murdered Artists Coalition

    It’s mathematically impossible for these services to pay a “fair” rate. a fair rate would be to let the artist (creator of the work) set their own pricing. ya know, Free Market???

    What we need is a lobby to change the DMCA laws in particular the “Safe Harbor” provision which is letting Spotify, Youtube, Pandora get away with murder of the artist.

    What’s even more concerning is the loads of independent artist gleefully submitting their work to these services buying into the brainwashing and propaganda that “you need to be seen, get it out there… give it away” in reality 99.999 % of us are not writing a hit song nor will we be on the Grammy awards anytime soon.

    For an independent artist to make $5,250 dollars from 1 song, he or she will need to sell approx $5,250 of those songs at 99 cents each.

    Instead, millions are uploading to spotify and feeding the monster just so they can say “im on Spotify” it will take over 1 Million streams to make that $5,250 on a streaming service.

    Streaming services take what they want because of the loophole in the law, they know for a fact a majority of artists aren’t tracking shit.. nor can they. or they get lost in the mathematical world or “Blended Rates”.. good luck getting that 400 10th’s of 1 Penny (what they pay per stream)

    Ask yourself, is it more likely for you to sell to 5,250 people or 1 Million?

    WAKE UP

    Reply
    • Nick

      You don’t have to get 1 million people to listen to a song to get 1 million plays.

      Reply
    • Versus

      “What we need is a lobby to change the DMCA laws in particular the “Safe Harbor” provision ”

      Absolutely right. Until piracy is controlled, there is no “fair” in this market. The corporations have all the leverage, since they can always say that their fraction of a fraction of a penny is your only alternative to piracy (i.e. $0).

      Reply
    • Versus

      “What’s even more concerning is the loads of independent artist gleefully submitting their work to these services buying into the brainwashing and propaganda that “you need to be seen, get it out there”

      True indeed. These desperados create a race to the bottom, and undercut any efforts to insist on better terms. They are the equivalent of “scabs” (strikebreakers) who cross the picket line and continue working for the system that exploits them, undermining any force for reform.

      We will only make a difference by working in concert [sic]. An individual musician, even one with the clout of a megastar like Taylor Swift, can only do so much alone. But a massive majority of musicians, from major to obscure, working together with their colleagues in music (from producers to studios to publishers to labels), demanding better terms, better laws, fair pay, lobbying for a real replacement to DMCA, etc…that at least has a shot to make a difference.

      Reply
  5. Murdered Artists Coalition

    “I spend $42/month on three streaming music services. If the people I listen to ain’t gettin’ paid, they need better muscle. ”

    This is classic.. with what money are we to get better muscle? How about we get better muscle and raise your rates.. Would you like them to take more money from you?

    that’s what their doing to us.

    This is like people telling the artists to “just go on tour and sell shirts or something to get money”

    How do we fund the tour when people are stealing the tracks or streaming them?

    The streaming services are pitting creators of the songs (Copyright Holders) against the consumer with this unfair practice. Their telling the consumer “you get everthing for 8 bucks, as much as you want”.

    We are left to defend ourselves for asking 99 cents..

    How dare you set a price for your product.

    Reply
  6. Wake Up

    “Despite Spotify claiming that 70% of its revenue is paid back into the music industry and that it has paid in excess of $2 billion to the music industry since it was founded in 2008, many are still questioning who actually benefits.”

    “But, artists are not really buying what Spotify is claiming. If the streaming service wants artists to stay on board, they will have to re-examine their payment structures so it is viable for artists.”

    Are you claiming that Spotify DOESN’T pay 70% of it’s total revenue to rights holders? That’s what your choice of words suggests.

    If you think it’s not true, please provide the basis for that.

    In the alternative, if you actually do realize that it IS true, then what “re-examination of Spotify’s payment structure” do you think is appropriate? 80% of total revenue? 90%?

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      What she means is that 70% is a top-line figure that is never broken out, and obfuscates the real situation. A huge portion of that 70% is going back to the largest labels, with little getting back to the artist. Which is why artists don’t feel this ‘70%’ figure that Spotify hammers over and over again means anything; to the opposite, it represents money that they are generating, but oftentimes not collecting.

      Reply
      • Frank

        Sounds more like the labels should be paying artists more. Who owns Spotify by the way?
        Oh, the labels.

        Reply
      • Jeremie Varengo

        I can tell you that unsigned BUT (somehow) successful artists make money with Spotify and see these 70%.

        The problem is, and has always been (since the commercial exploitation of recorded music exists), the major record labels’ policies and the total lack of transparency in their accounting (+ their overall incompetence when it comes to digital; it took them approx 10 years to realize what was going on out there).

        It is way too easy to blame technology, just because you (the label, the publisher, the artist, the songwriter, etc) can’t adapt to it.

        I kinda agree with him here, without streaming and YouTube, even if the major labels might not be dead by now (since they are sitting on a pile of cash which would take some time to be completely burnt), they’d be much closer to collapse than they are today.

        But again, streaming alone is not THE solution, it’s just a (more and more) significant part of the scope of potential revenues for artists, along with recorded music sales, touring, merch, licensing, publishing, etc.

        Jeremie Varengo, Founder
        http://www.jtvdigital.com

        Reply
      • Mungo

        I recently spoke to an artist who stated they got approx. $1 for every 10,000 plays (on Pandora, not Spotify). If we assume that the average Pandora subscriber listens to 1000 songs a month, at $10 a month, that’s 100 songs per $1. You can do the maths that tell us that only 1% of Pandora’s revenue is going to artists.

        Reply
    • Wake Up

      If she “meant” is that 70% is a top-line figure with little getting back to the artist, then she should say THAT and shouldn’t be coyly suggesting that the 70% figure isn’t true, at all.

      But then again, she’s learning form the esteemed DMN um…..editorial staff…

      I mean, forget content and being in any way a reliable voice regarding the dynamic music industry. Maybe another overhaul of the website, to make it even LESS appealing, will help with the downward slide????

      No?

      Anyway, I’d love for you to explain how the the 70% which very well might not be making it to the artists (surprise!!!!) is in any way Spotify’s problem…

      If artists don’t feel the 70% figure means anything, or that it represents money that they are generating, but oftentimes not collecting, why aren’t they talking to their record labels and their music publishers and their PROs?

      ‘Cuz THOSE folks have been screwing their artists (to whom they have a fiduciary duty, I might add) way longer and way harder than Spotify EVER could.

      Nahhhh….

      That would make too much sense.

      Let’s not actually talk about the MUSIC INDUSTRY. Let’s just beat up on the new guys and divert the inquiry and claim THEY are the problem…

      *sigh*

      Reply
    • Versus

      Even if it were 100%, it’s clearly not viable in supporting artists.

      I would suggest that the problem is the unlimited streams set at a fixed price, which means the price per stream is floating (or rather, sinking).

      There should be play limit tiers at different price points for streaming services, which would allow a guaranteed minimum pay-out per stream.

      There also has to be transparency of accounting, especially for notoriously opaque companies like YouTube.

      Reply
    • Me2

      We could potentially see 9x.x percent going to rights holders. Nothing more than PayPal’s cut. But this would be a decentralized system, unlike what we’ve seen so far. No further need for one stop server rooms banking an eat all you can ten dollar buffet. But that’s the next dream. It should be frightening.

      Reply
  7. illtalbeats

    This is akin to saying “I shot you in the leg instead of the head, so I saved your life”

    Reply
  8. DrFreud

    “Spotify CEO Claims the Music Industry Would Be Dead Without Spotify”

    Daniel Ek is leaving Spotify for a career in stand-up comedy ??

    Reply
  9. R. Emmett McAuliffe

    Somewhat different take: the whole “Streaming* As Godsend” meme is premised on the idea that it is impossible to map copies to owners on the internet. Which tech experts have said about no other digital commodity. We gave up. We assumed. But it will come eventually. After this experiment fails.

    Slide deck: http://www.authorstream.com/Presentation/frystew-1158142-new-dce-content-owners-explan/

    *streaming is not the salient feature however, it should really be called “All-You-Can-Eat Rental”.

    Reply
    • Me2

      Agree wholly. ‘Streaming’ is playing a cached file. The implementation could be much different from these relatively early service models. It probably will be. No one owns the future.

      Reply
  10. GG

    I work for a major label. My time at this particular label is limited, so I’m making my comments without bias. I agree with Daniel 100%. The industry is in such a state of disarray, they have no idea what they’re doing. It’s a dying business, it really is. Is that a bad / sad thing? Maybe, maybe not. In my opinion, we’re going through the biggest paradigm shift our species has ever seen with the rise of the internet. We’re still in the infant stages of this. Business has not been able to adapt as quickly as the internet has progressed, especially the business of marketing and selling music.

    Look, the true success during the heyday of the music industry was their ability to control marketing channels. You could control what people heard on the radio, and control the images of the bands, and that’s what people heard and then went and purchased. With the internet, the control of marketing channels has gone away. Yes, the industry and labels still have some control over television and radio, but on the internet they’re competing with everything else. Sales are inherently going to go down, which they have, which has been documented very well over the past 15 years and should be no secret to anyone.

    So, my point here is that without streaming services, the music industry would be in the gutter. That’s my personal opinion. Piracy was on the rise, and not everyone was using iTunes or buying tracks online through other digital retailers. It truly was on the decline. Spotify did help save the industry, and changed up the whole approach to music consumption. Now there are many streaming services you can pay for.

    How does that work for the musicians actually creating the content? Terribly. Again, well documented that musicians make nothing from streaming services. But, that’s because majors are using their power in the form of licensing agreements, to squeeze as much money out of the streaming services as possible. So, the money owed to majors is first priority, because without the licenses people won’t listen to the service. More people want to hear the new Bieber album than they do a classic Sun Ra album. So the money going to the labels goes to the majors first. From that point on they probably do some shady stuff, because that’s what major labels do, which is what they’ve always done.

    So, to summarize.. yes Spotify has saved the “business” and “money” side of things for the major labels. But, it hasn’t actually done much to pay musicians and content creators. But again, a lot of that comes down to the financial constraints set upon them from the major label licensing deals. There will eventually be a tipping point where artists (I cringe using that term, I prefer to call them craftsman) will say enough is enough. What happens then? Do they leave their major label (if they’re lucky enough to even be on one), do they leave their smaller label? Or, do they continue to do DIY and come up with more creative ways to make a living? That’s the big question that nobody understands. It’s complete chaos, and nobody is making money right now as an artist, unless you’re one of the few lucky ones who the powers that be have determined to pimp out for their own pocketbooks. So, we’re going to see big changes in the next decade. I’m not 100% sure that the record labels will be safe. We may see a rise of new labels with a better understanding and a better business model to accommodate our current situation. The old business model isn’t working, clearly.. but labels, like many other things, resist change. And I think it’s going to work out poorly for them.

    I welcome the uncertainty. I think there has never been a better time to be a musician in this country, creatively speaking.

    Reply
    • FarePlay

      “Is it possible for users to listen so much that it costs Spotify money?”

      “Theoretically yes, but I’d love to have that problem. So please stream away :)”
      Daniel Ek, Founder & CEO of Spotify Quora April 20, 2015 https://www.quora.com/Is-it-possible-for-users-to-listen-so-much-that-it-costs-Spotify-money?share=1

      Well Daniel, you do have that problem.

      The news since the beginning of the year for music streaming has been even more brutal than the devastation it is causing the music business and recording artists. Whereas Spotify lost more money than ever last year, $200 million, the trend we see in streaming is one of a failing business model. At least recording artists and songwriters are seeing checks for $3.47. So whose worse off? Well I guess the artists, because they can’t go to Goldman Sachs, you know the guys who handled the government for the Wall Street bail out, to cook up loan schemes to keep this loser afloat.

      Is anyone else tired of the tech pr machine churning out claims that everything tech comes up with is the future?

      As much as the tech PR machine and the supplecants

      Reply
      • Me2

        I did the math once to figure out what kind of per play rate would happen if a 10 dollar a monrh user streamed 4 minute songs 24/ 7 for the entire month. It came out a bit lower than Spotiify’s average… not a particularly practical exercise, but out of curiosity.

        Reply
      • Me2

        ‘Is anyone else tired of the tech pr machine churning out claims that everything tech comes up with is the future?’

        Past tired and into sick. No one owns the future.

        Reply
  11. yoslate

    My band’s recent accounting on cdbaby has fifteen pages of records for streaming on Spotify for our latest project. We realized $3.64 cents in payment. We might be able to afford to bring a suit against Ek and Spotify in another 1,500,000 pages….

    Reply
    • Anon

      Take it off there.

      They are ripping you off. If you had just ONE album sale, you would have been ahead of the game, and really you lost many more.

      Reply
  12. G

    Very well-articulated G G. I’m in complete agreement. This is the biggest shift in the music industry since the beginning of recorded music, in my personal opinion.

    We should all be embracing this change not fighting to keep a broken system that’s has the music industry at, what I believe, is the bottom. It’s just human nature to reject change, for most people. The few that accept change and foresee change are the innovators and the thinkers outside of the box.

    People believed that they were being ripped off when radio went from including one speaker to two speakers. Artists thought that they were being ripped off when music videos hit MTV. The world needs to accept this change with open arms and trust me they will. It’s already starting to happen. Ask Ed Sheeran, Kygo & Calvin Harris (younger artist with progressive contracts). The new label will be born.

    We all need to start thinking much much bigger than millions of streams. We need to start thinking in billions. Multiple billions. As someone said earlier, “it’s a listen, not a purchase.” It’s not physical. 30 seconds into a song and you have a listen. And millions of people can listen over and over again all over the world and that counts as well. I know that I stream songs that I like more than once.

    What Spotify needs to do, and I believe that they are already investing a lot of money into this, is create the highest level of transparency for artists for two main reasons of many. One, so that the artist can see where every fraction of a penny is flowing to. With that transparency they will clearly see who is ripping them of. This is how the labels have been ripping off artists for decades. Two, so that they can access the same massive ocean of data that Spotify has in it’s vault to reach their audience in the most efficient way possible which ultimately will do exactly what it has done for the EDM world.

    Spotify is only in 59 countries. That is not including China & India which accounts for 2.6 billion people out of the 7 billion people worldwide. More people will have access to music than ever before due to advancements in technology. The numbers are there. Netflix has proven this. Blockbuster has been bankrupted. Spotify is growing at a faster rate than Netflix which is now in 138 counties with 75 million paid subscribers.

    The sooner everyone embraces this the sooner the smaller artist will benefit from this as well. You can ask Perrin Lamb about that.

    In the next few years Spotify will be profitable and will have more clout to negotiate better publishing deals. The labels will have to change their entire business model. The music industry will be more profitable than it ever has before. The artist will not have to rely solely on touring and merch to survive anymore. The quality of music in circulation will be better because the artist can actually get back in the studio again and create given the extra time. All of the greats weren’t recording and putting records out in 3 months trying to create hits. They were collaborating and they were putting full records that spoke. Most importantly, the consumer will ultimately decide what is good and what is not good, not the labels. The music that we all love will be consumed in its purest form once again.

    We are in the infant stages and with that, there are many things that need improvement at Spotify and all of the other streaming services. Daniel Ek is a fan of music and will not stop until he reaches his ultimate goal of creating a distribution platform that benefits the artists, songwriters, producers and everyone else that deserves to be compensated for their art.

    I also believe that you will see the ad revenues increase on the freemium side in time. 9% is just not acceptable right now. Much like the film industry, I think that the windowing process will create that excitement that we all once felt years ago when we scrounged up loose change and allowance money to wait in line to buy the records or cd’s at our favorite record stores. And best of all, there are going to be many more innovative companies connecting us all over the world through music than ever before.

    Reply
      • Quentin

        Intelligent response. No need for that kind of behavior in what’s seems to be a lot of good points made on both sides. You’re doing nothing to help your cause.

        Reply
    • Mungo

      Spotify is often not paying anything at all for plays. Rather than wait until they’ve figured out who to pay before playing, they play anyway. That’s like walking out of a shop with the goods for free because a cursory glance around you didn’t see the cashier.

      Reply
      • Me2

        I always wondered about writers’ mechanichals and how they were being dealt with. Turns out that in many cases they just weren’t.

        Guess it’s just too hard to find out who wrote a song in today’s information age. But until we do, let’s use it anyways.

        But click here on the Survey Monkey opt in… trust me it’s cool.

        Reply
    • John Eppstein

      The only way Spotify will ever be profitable is to raise their rates. Right now they’re bleeding cash. The only way to become profitable AND pay a fair royalty is to raise their rates by several hundred percent, to the neighborhood of $30-$50 per month. DEo you think that’s going to happen?

      Reply
      • ChristinaChains

        Spotify ‘bleeding cash’? Have you sustained a recent head injury by any chance?

        Reply
  13. Anon

    EK Dingbat is irrelevant.

    There will always be someone to tell us war is peace, that eating gravel is good for us, etc etc.

    The real issue is that his puppet masters have enabled a system where the musican/composer can no longer make a living, and we need to fight back by taking our stuff off of the on demand streaming services.

    Reply
  14. G

    You answer with emotion and no real solution.

    Take it off and you’ll see what happens. People will steal your music from the piracy cites. Look at what just happened to Kanye west when he limited his latest release to one streaming service, Tidal. Record breaking piracy.

    The other thing that will happen is that the average person (the masses not the true fans) will just stop listening to your music unless you’re in that tiny grouping of people that are so big that they can get away with removing their catalogues or can temporarily delay their latest release to streaming. Adele, Taylor Swift or Coldplay, etc… That window will close sooner than later as we get deeper into the streaming revolution and the elite artist knows that which is why they are capitalizing as much as they can, now.

    If you can get every artist to remove their music from on demand streaming than your solution will work but, in my mind, that is not possible. A great idea but an impossibility, so I would come up with a better solution if I were you.

    The artist should absolutely be compensated for their art form. Spotify, while not perfect by any means, yet, is on the right path. It’s simple math. The numbers will not lie within the next 5-10 years if the the paid subscriber base keeps growing likes it’s growing. The labels even see it now after a long fight against streaming. L.A. Reid and Kenchiro Yoshida (Sony Corp’s CFO) have confirmed this. Apple obviously sees it as well by undercutting their own digital downloading platform with Apple Music.

    Like I said before, the labels are the problem just like they always have been. They leveraged the artist catalogues to bully Spotify in to giving up 20% steak for licensing deals with non-disclosure agreements. These contracts will be renegotiated at some point and we’ll see if Spotify Does they right thing as they become profitable and more powerful. Remember that they payout 70% of all of their revenues (1.3 billion in 2014) and reported a loss of $197 million in 2014. That will change as they convert more people to the paid model, which was 91% of their revenue in 2014. The freemium model only accounted for 9%, obviously, that needs to change.

    The labels already know that they have exposed themselves because as soon as Spotify goes public, which will be within the next 2 years, they will cash in huge on the bet that they made in the very beginning that they could not lose. They are already backtracking by saying that they will share the IPO profits with artists. Sounds like damage control to me. I’m sure the labels will be greedy and that the artists will not be happy with that payout either.

    Transparency is the answer. Expose the labels, expose the greed. It’s a lot easier to make business decisions when you can see the cash flow. Numbers don’t lie.

    Let’s talk again when Spotify has 100 million paid subscribers and the smaller artists are hitting a billion streams on their catalogues, without the labels stealing money in between. There will be a much different tone in the music industry from the artist perspective.

    Reply
    • Armless Hammer

      You see I rather people pirate it than have mega conglomerates make money off my hard work while paying me zilch.

      The only way forward is to starve the mega conglomerates of content.

      It’s not like EK Dingbat/Sony Music etc etc can create a damn thing.

      Reply
    • Versus

      ” The numbers will not lie within the next 5-10 years if the the paid subscriber base keeps growing likes it’s growing. ”

      Are you sure?
      As I recall, the prediction of “economies of scale” increasing pay-outs have not played out that way.
      I thought payouts per stream are actually decreasing as the subscriber base grows.
      Can anyone confirm or deny with proper stats?

      Reply
  15. Armless Hammer

    We have a lot of ‘posters’ on the thread who are flat out lying through their teeth – saying things like unsigned artists are doing well on spotify.

    It’s the math, stupid.

    Reply
  16. John Eppstein

    Daniel Ek is a hypocrite who has based his career primarily on “legal” ways to profit from digital theft from musicians and others. He made his big splash with utorrent, which was the most popular Bittorrent client among pirates, as its security features made it the favored client by those running the exclusive private bittorrent pirate sites. He made a bundle selling it to Bittorrent itself, which had not managed to create a popular client for their own technology, and used the money to start Spotify, where he has become notorious for not paying artists, especially indie artists on smaller labels, while cutting back room deals with the 3 majors to trade stock in the company for access to their catalogs. Of course, since the money they make from these deals is no technically “royalties” they are under no compulsion to share it with artists. What royalties do get paid go primarily to the majors, who give nearly all of it to a very small number of “superstar” pop artists according to extremely opaque policies they’re not willing to disclose. Meanwhile the more artistically valuable artists and all indies are shut out from the payouts and receive merely token crumbs, just enough so that Spotify can claim to pay. The reality is that as an on-demand service for a very low monthly fee, Spotify DESTROYS records sales (both digital and physical) because why should people pay for records when they can stream pretty much everything (except a few artists like Adele and Taylor Swift) for a few bucks a month? Interestingly enough, both Adele and Swift have experience records sales far above average for their records unavailable on Spotify. That’s proof right there that Spotify kills record sales.

    Ek justifies himself by claiming that Spotify provides a “legal” alternative to piracy (which is where he made his money in the first place), but the majority of artists receive nothing substantially more from Spotify than from piracy. The solution to piracy is effective enforcement of the law, not “legal pirates” like Spotify.

    It would be different if Spotify actually paid everyone fairly at a rate that could compensate for lost sales, but in order to do that Spotify would have to raise its rates by several hundred percent.

    Meanwhile, many of the best artists are leaving music in favor of jobs that pay a decent living wage.

    Spotify is not saving music, it’s pounding the nails into the coffin.

    Reply
    • Yeah, 1998 WAS Great, Wasn't It?....

      Do you have ANY proof of this “notorious” behavior?

      “[Ek] has become notorious for not paying artists, especially indie artists on smaller labels…”

      Who are the masses that have noted this consistent behavior?

      Your pining for the days of individual record sales. Suggesting that if Spotify wasn’t offering a paying streaming service, everything would be great with conventional sales goes even further to show just how detached you are from reality.

      It would serve you well to actually recognize the reality you exist in.

      Reply
      • Jane

        As an ex music retailer & a songwriter Spotify certainly was the last straw in destroying things.

        As a writer it’s simple: a stream is not a sale. If the rate paid on a stream was fair then perhaps there wouldn’t be so much of a backlash against streaming services going on.

        Reply
    • Versus

      “He made his big splash with utorrent ”

      …and did he ever make any effort to compensate those whose livelihoods he stole by enabling this rampant theft? Or even apologize?
      Suddenly he claims he is one of the “good guys” and even the savior or music.

      As in:
      I shot you. Here’s a band-aid. Where’s my Nobel Peace Prize?

      Reply
  17. Brian S.

    It’s not the rate on the streams it’s the amount of streams. Currently, the total amount of streams is not enough but it’s just the beginning. As the paid subscriber base grows across all platforms the total amount of streams will increase significantly making these micro-payments add up to a significant amount and the payout will always be 70%. I think that in time the market will dictate what the rates should be but the most important thing will be getting the paid subscriber numbers and the amount of streams to increase to a level we’re people are being compensated fairly. It’s all growing at an incredible rate. The entities that are taking advantage of this transition are about to exposed. Everyone should be working together to expose them. The old label business model is about to be exposed and when that happens they will be considered obsolete and will no longer will be needed as the new contracts are drawn up. It will spawn a new type of label. It’s already staring to happen.

    Reply
    • Versus

      “in time the market will dictate what the rates should be ”

      The market cannot operate properly when it is corrupted by piracy (i.e. theft) at such a widespread scale. Music can only find its market value when it is not competing against “free” (i.e. stolen).

      Reply
  18. Sung Difronzo

    How do you respond to some artists claims that music streaming services are harmful to the industry?

    Reply
  19. Versus

    “Spotify CEO Claims the Music Industry Would Be Dead Without Spotify”

    – Eulogy at funeral of music industry

    Reply
  20. Versus

    And are songwriters/composers and publishers finally being paid by Spotify?
    Or are they still claiming they can’t find out (!) who wrote the music?

    Reply
  21. Brian Stoltz

    What an insulting thing for this Spotify prick to say, “70% of its revenue is paid back into the music industry…”
    70% split amongst every damn artist in the world is nothing! Spotify exist for one reason – to use the property of hard-working artists and writers so they can make millions in advertising dollars.
    Modern Robber Baron’s, plain and simple.

    Reply
  22. Mexicano

    What about the customers with poor or limited internet. Streaming is out!

    Reply

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