Political strategists know all about discrediting and marginalizing opponents, evading questions and controlling interview topics. That may win elections, but is it a winning strategy for Spotify? Over the weekend, Spotify CEO Daniel Ek answered a few tough questions on NPR related to label and artist compensation. And the answers are reaffirming a Spotify response strategy that now seems more like Republican Party disinformation than an open-minded music company.
NPR Weekend Edition Host Audie Cornish: "One of the big criticisms that we've heard from artists is that the royalties that they get from Spotify are so low that it might as well be piracy."
Spotify CEO Daniel Ek: "Yeah, I do want to address that because I feel that it's important to mention that it's still early days, and Spotify is only two years in, using the service almost three. In that short period of time now, we've become the second largest revenue generator for the labels in Europe, and we've paid out more than a $150 million back to the music industry."
NPR: "When I was online I also discovered an artist Sam Rosenthal, who's the founder of a label called Projekt Records. He recently wrote on his blog that 5,000 plays on Spotify generates a little more than $6, and by comparison 5,000 track downloads on iTunes generates for him $3,400. I mean, it's a big gap there."
Ek: "Yeah, so the first thing I will say is it sounds - those numbers definitely sound way off. But again what I've sort of emphasized is that we're paying the labels, we don't pay the artists directly."
But, are the numbers actually 'way off' here? In other words, is Rosenthal lying about his royalty statements for whatever reason? "The fact is that $.0013 is what Projekt was paid per stream, from Spotify," Rosenthal told Digital Music News. "Other labels I know have reported the same."
The full audio interview is available here.
Comments Closed
alden Monday, December 05, 2011
Analogy is apt they are clearly lying and discrediting. Also this is about major labels and investors making millions on an I.P.O. --- sound familiar?
lifer Monday, December 05, 2011
Public radio interview. Hmmm. IPO or some other exit strategy must be on the horizon.
brooklyn habitat Monday, December 05, 2011
Reminds me of a famous Groucho Marx quote
"Which are you gonna believe, me or your own eyes?"
Maxwellian Monday, December 05, 2011
But hold on. What does Jeff PRice think of all this?
gaetano Monday, December 05, 2011
Funnily enough, Jeff is one of the only people who gets to see first hand how these royalties and rates ebb and flow, with literally thousands of artists.
He's probably one of the only people who could weigh in on the topic at this point.
Maxwellian Monday, December 05, 2011
aha!
So Spotify does pay artists then, yet another massaged fact above. Share that royalty someone?
gaetano Monday, December 05, 2011
Of course it pays, it's the amount it pays, and the complete lack of transparency in both the method and figures themselves.
Apparently the .00029 per play number has been declared untrue by a few people, but wouldn't you know it, no one else has been able to cough up ANY information otherwise?
Weird huh????
HansH Tuesday, December 06, 2011
Well I can cough up the most recent statement.
WILL Monday, December 05, 2011
I'm no expert in this area but aren't streaming models like Spotify constrained in ways that download services like iTunes are not? Does Spotify set the amount it pays labels or does DMCA or some other body set the amount like any other streaming service?
Is Spotify the villain here is what I'm getting at?
andre Monday, December 05, 2011
@will
generally speaking, online radio stations like Pandora, which are NOT on-demand streaming services, are subject to royalty payments set by statute.
spotify and other on-demand streaming services have to enter into agreements with record labels to legally stream recorded music.
steveh Monday, December 05, 2011
"...now seems more like Republican Party disinformation than an open-minded music company"
Paul why do you say "now"? Spotify have been like this since DAY ONE!
It's the lying, the dis-information and the total lack of transparency that's the number one problem with Spotify.
Do we really want a massive corporation that behaves like this controlling our "music is like water" supply?
It's a really serious matter....
Oz Monday, December 05, 2011
PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN.
Erik P Monday, December 05, 2011
WTH? Is DMN getting into politics now? Why you would start an article ripping on half the population is beyond me. I lost a lot of respect for DMN today...
Save your political stance for a political website...
Anthony Polis Monday, December 05, 2011
Agreed - it's kind of unprofessional, not to mention silly. As if democrats are immune to disinformation and political tricks...
@UncommonRecords Monday, December 05, 2011
Nasa/Adam Warlock
Whatever brings attention to the lies spotify spews is good. Whether the comparison is fair, the content is true.
@quietrevolution Monday, December 05, 2011
Rob MacArthur
Big music lover, clearly.
@BenjiKRogers Monday, December 05, 2011
Benji Rogers
sickening.
Ned T Tuesday, December 06, 2011
HansH Tuesday, December 06, 2011
Just for record. I now get $0.0063 for a stream: More info
Does look like Sam Rosenthal is way off....
@brookeslist Tuesday, December 06, 2011
Streaming and download are two entirely different animals and payouts.
Wonder what Spotify pays the publishers, if they do?
pubs Tuesday, December 06, 2011
The publishers get 10-20% of revenues depending on the territory.
steveh Tuesday, December 06, 2011
Leaving aside the political squabbles, we all seem to be agreed that Spotify/Ek stand accused of appalling spin jobs.
It's this appalling lack of transparency that offends me the most.
This offends me more than the tiny payments.
I agree with HansH that Spotify payments are going up - but frankly even 50,000 streams at 0.6 US cents is only 300 bucks! That won't go anywhere near paying your office rent for example.
And please Mr Ek STFU about "second biggest revenue payer in Europe". For a dance music label you are way behind iTunes, Beatport, Amazon mp3 and eMusic! Spotify is about on the level with Juno. And there is no Spotify service in Germany, Italy and Poland (180 million people!). This is a pathetic LIE!
@lassial Wednesday, December 07, 2011
Is this really such a bid deal? I think the email slip of duplicating the first paragraph pretty much says it all.
How much transparency has there been with Apple deals with the major labels? Sure, you'd want a smaller company to do better than this, but can you really expect it?
steveh Wednesday, December 07, 2011
Apple's iTunes basic deal is really clear:-
Track purchase price:- $0.99
Label gets:- $0.70
What could be clearer or more transparent than that?
This is the same for all labels - or for artists if they have a direct deal with iTunes.
Spotify have nothing remorely as clear as this and all their deals are shrouded in non-disclosure.
lostjohn Wednesday, December 07, 2011
I'm tired of thier 150 mil number. It means nothing when divided by their own estimate of "tens of thousands of labels."
Jon Friday, December 09, 2011
I don't see how '$150,000,000' over a couple of years is the 'second largest revenue generator' for labels. Just do the math. And the financial results we've seen from Spotify are very similar to Sam's experience. His numbers are in similar proportion to ours.
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