Spotify is losing a lot of money because they pay too much for music.  

Spotify is not paying enough money for music.

 

Can't have it both ways.

 

By the way, Spotify now has close to 3,500,000 paying subscribers.  Not the 1.5 million quoted in the article.

Spotify grew from 1 million paying subscribers (March 18, 2011) to 3 million paying subscribers (Jan 26, 2012).

1 to 3 millions in a little over 10 months.  

 

 

growing subscription rate and yet they are still trying to raise more cash...

http://www.thecmuwebsite.com/article/spotify-begins-new-funding-round-could-result-in-3-5-billion-valuation/

 

 

Which mean Spotify is paying too much money for music licenses. 

The Black Keys want Spotify to PAY MORE.  

Can't have it both ways.  

it's not a difference of "both ways" it's a broken model.  People want it to work, but it doesnt.  They're doubling down on investment becuase they need the money, the licenses are too expensive and they can't get enough advertising revenue from the free streamers, and 10 bucks a month most likely doesn't cover the cost of what somone who would pay ten bucks a month would listen to.  they're paying on both ends.  and on an un-related note, what the hell is a spotify app? don't mean nothing.

I see it is useful to read your informations , I am interested sharing , thanks bonsai

No, it means Spotify needs to increase its income, either via advertising or higher subscription pricing.

 

- Versus

No, it means that the people on the board, President, CEO, CFO, CIO, CwhateverO are all making too much money. Everyone wants to be filthy rich and get filthy rich off of the artist when it's the artist that deserves 80% of the profits. Not the labels, promoters, music lawers or spotify.

I support the black keys for speaking up. too many artists are afraid of both fans and the tyranny of the tech companies that have been able to rip off artists for over a decade without compensation or consent... it's time for ARTISTS RIGHTS... period.

 

I'm writing these guys a fan letter now and buying all their albums again.

Come on Black Keys. If that's your position put your money where your mouth is and pull all your music from Spotify.  It's stupid to say things like this and still try to benefit from Spotify as a promotional tool.

If I was head of Spotify I would personally delete their music from the service.

no tiene desperdicio.

They should see the advantages.

You should see all the disadvantages.

The Black Keys are doing a lot of yelling this year...

Good!  The music industry is hosed right now and artists are the ones taking the hit.  Downloads hit artists hard enough by decreasing album sales and then streaming replacing it so that the artist gets even less in royalties.  Someone has to speak up, and if the Black Keys are willing, then good for them.

"The music industry is hosed right now"

and yet we have this: http://venturebeat.com/2012/03/27/riaa-subscriptions-revenue-increase/ "Any doubts over whether streaming services are a big deal for the music industry can now be dispelled." "...clearly, subscription services aren’t cannibalizing other sales. If anything, subscriptions are actually helping to boost sales overall."

I was expecting an article on DMN about this today. Perhaps it will come tomorrow...?

...the reality behind Spotify and music streaming.

Watch out because this is MUCH bigger than The Black Keys everyone.

Artists are getting pissed off, they want to be paid fairly but they won't be until they risk saying something out loud.  They have to demand it from their labels and fans and places like Spotify.

This.  that bubbling you see is a lot of industry insiders boiling mad.

You got that right.  Until the artists and filmmakers and authors start speaking out, the public and pirate faithful make it a record business, film studio deal and frankly the fans could care less.

So if any of you artists, who want to get paid, grab your video camera enabled phone, flip phone, web cam, WHATEVER and start posting some stuff on youtube, we'd love to see it.

And Sean Parker?  He helped create the problem, seriously devalued music and now he's back to save the industry and blame the labels for not passing on the pittance Spotify pays.

Will Buckley, founder, www.fareplay.org

Do you really think artists/songwriters get royalties on Spotify? Not enough! This is a must read...

Spotify puede convertirse en un monstruo.

Musicians don't like Spotify because 1,000 plays (payout: half a cent per play) earns you enough to buy a hamburger; 1,000 sales on iTunes (66 cents per) could maybe pay your rent. 

Labels like streaming sites like Spotify because they get an upfront chunk that benefits the co's short term profit (and therefore CEOs short-term bonus).

Large corporations like Spotify because they either sell hardware (iPods) or internet/cell connections that are needed for the services.

Consumers like Spotify because it's cheap.

Sean Parker likes Spotify because he's, well, evil.

I feel that the real issue needing to be questioned here are the deals made between Spotify and the major record labels.  The complete lack of transparency concerning these 'catalog' deals is a bit disconcerting.  While I agree that the per-stream royalty rate is very low, it should be rightfully assumed that labels receive loads of upfront money that doesn't trickle down to the artists.  Further, the calculations for the per stream royalties are negotiated in the contracts between labels and Spotify, vary for each deal and are not disclosed.  Can't really blame Spotify for this, though, as this non-disclosure policy has been common practice with labels for years (e.g. MTV deals).

There are two problems with Spotify and MOG models that can't be ignored:

1. The biggest subscription services in history have peaked at about 25M subscribers. HBO, Netflix, AOL back in the day. There are only 25M people in the U.S. who are willing to buy in to this monthly model of consumption so far. Where are the rest? Apple claims I-tunes has 200M(more ?) people with credit cards on file with no monthly fees to pay. And I get a check every month from apple. Where's my Spotify check?! Still waiting.

2. Look at your spouses or friends number of plays in iTunes. It's right there to see if you want to take a look. Sort them by most to least. Aside from runaways (that Spotify and others prevent with activity checks) you aren't going to see hundreds of spins over the last ten years for any track or album. You aren't going to see a hundred in most cases. Do the math on the Spotify royalty rates. See if you can get to $100. Good luck.

What the "number of plays" data is telling consumers is that it's unlikely that many consumers find it worthwhile to spend $10-$15 on a download or CD if they are only going to play the album a very limited number of times.  (5?  10?  I have probably thousands of CDs which were played 2 times or less.)

There are so very many more albums out there being marketed for me to listen to.  Supply and demand.

 

people are forgetting that we're not selling hamburgers.  well, katy perry is, but the vast majority of musicians are not selling hamburgers.  we are selling art.  a painting is a peice of canvas, stretched over a frame and some paint, but people pay large sums of money for them. buying a record is a personal investment in a musician.  or it should be.  and all this commodifying is exactly the problem.

Sounds like a really good scam for the labels and Spotify. I'm still getting a fraction of the penny times 30 for the whole lifetime of listening to my song. My favorite song on my ipod has 87 plays all time, over about a 6 year period. How does that make any sense?

Spot on.  Spotify has learned to reduce payments to their vendors (content creators, rights holders, etc.) very significantly.  There is no benefit to the artist, none whatsoever.

The only benefit is to the listener, who frankly could not care a cent about paying the people who provided them with the content they are enjoying.  The listener is behaving like a typical consumer. 

There is no foreseeable way out for any artist if this is the business model distributors will use, except to avoid that distribution channel.

I totally agree with The Black Keys. Spotify and Sean Parker cannot be trusted. Spotify won't make more money than iTunes; they are simply saying anything to drum up more investors money to finance a pipe dream. As Pat Carner said, if it is profitable to enter into streaming, iTunes will enter the fray.

Is Spotify trying to hide something or is it too hard to include the following in the sales report for artists (The Black Keys and myself truly think it is the former): total subscription revenue divided by total streams times artist royalty percentage rate times total artist streams.

Last summer 2011 Spotify did say they would have 50 million users(paid and free) in 12 months...3 more monts til summer 2012, how are those totals coming along.

By the way, iTunes has a minimum 67 million paying music subscribers (minimum $4 billion music revenue per year divided alleged $60 music spending per year). Waiting to find out if iTunes sold more than 4 billion songs in the last 12 months. Also by my calculation, iTunes accounts tied to a credit card is numbered at 300 million (+75 million since early June 2011).

Which model is growing faster?

"Last summer 2011 Spotify did say they would have 50 million users(paid and free) in 12 months...3 more monts til summer 2012, how are those totals coming along. "

Really?

Here is the source, and the target is 50 million American users within twelve months of summer 2011.

http://www.digitalmusicnews.com/stories/070811spotify

"Trust me - Dan and I like to make money."

Oh, no shit bro.

Stealing from artists seems to be the business model of the new century.

Artists are not being stolen from, they are consenting adults entering into this agreement with Spotify willingly and signing contracts that include a specific monetization scheme. No one is forcing any artist to put their music on Spotify or I-Tunes or anywhere, they have to do it willingly and sign an agreement. For all the people here who are extolling the virtues of a more "efficient" model where customers don't have to pay for songs they will only listen to 10 or 11 times in 5 years, since when did you become the authority on how much a work of art should cost? Maybe the artist should have a say on if the price of their work is changed from $1.30 for a song down to fractions of a penny per spin. Did anyone ask them? If the idea is that the labels and and music services get to monetize all the spins across millions of songs and squeeze revenue out of that mass behavior is somehow a good thing, then the artists who get 10 or 11 spins over 5 years from a customer (75 is a big giant hit in my iTunes library) should probably find another line of work. There are also schemes where you siphon a few pennies off of people's bank accounts and hope that no one ever figures it out. Or charge a consumer a recurring fee that is small but impossible to get off of your credit card. Is that what the music "business" has become? Just a big arbitrage game for the big boys? This is a sad, sad state of affairs people. 

Broadcast radio

iTunes

Amazon

Pandora

Spotify

That's how I view the hieracrchy of music specific services in the US. 

Traditionally, the broadcast radio market advantage has gone to the songwriter and publisher.  That's the way the system was established in the early years of the 20th century.  This country never had and still does not have a performer-artist specific performance royalty for broadcast radio. 

Pure play streaming radio has to pay not only the traditional royalties that go to BMI, ASCAP, and SESAC, but also has to pay out to SoundExchange (performer-artist specific performance royalty).  Ask Tim Westergren @Pandora how much that costs him ...

So, the question that has to be asked is this:  "who is the artist?"  Is the artist the songwriter?  Is the artist the singer?  Is the artist the guitar player?  the drummer?  Who is entitled to what and how much? 

Napster and MP3.com brought us a revolution.  All revolutions eventually turn into the status quo that has to again be challenged and upended by revolution.  Right now, the new city is still being built.  Get involved in the process of building how we'll drive around this new world ... don't just stand at the gate and yell; get into the "belly."

 

 

Should The Black Keys stop bitchin & moanin about Spotify, Rdio, et al?

Yes, they should stop bitchin and moanin about them IMO and get involved in the process of redefining changes in copyright law instead.  That's where the battle is.  

It all boils down to who gets how much of what ... who owns what?  Who owns the master recording?  Who owns the song?  Does the drummer get paid from airplay (broadcast or streaming)? 

The word "artist" is too ambiguous.  Who exactly is the artist? 

OK, 

Kim and Pat, you're gonna talk shit about Sean Parker, but you're part of a much bigger machine with much more despicable people that have been screwing artists out of exponentially more money for years. 

That 2.5 Billion is a drop in the bucket compared to what the inudustry has made gouging the consumer and the artist for decades.  And let's get real, that money had nothing to do with Napster, that had to do with him working with Zuck through Facebook.Watch the movie, there's a pretty decent soundtrack.  

This is just about which set of crooks you're willing to do business with, and honestly which system you understand better, and has spent more time in beta. 

Did Parker and Fanning throw the baby out with the bathwater when it came to artists via Napster? 

Sure, but there's nothing you can do about that now. 

Streaming's not going anywhere, it's just a matter of who concedes on which side, how much and when. 

If you really want to get angry, we can take this back to whoever invented the MP3 technology in the late 70's or perhaps the people that funded them through that time. The writing has been on the wall for ages. 

Black Keys, I recommend you take it where you can get it, pack it in, get yourself a good financial adviser and invest wisely. I know there's some high yield savings accounts you could probably live comfortably off of for years to come...

Or just keep making music. Maybe because you love it, and you're one of the 2% who get to experience at the level that you do. 

 

 

 

 

The only viable and real option is Grooveshark. 

Viable? Haha. Wake up dick.

Running Scared = Sean Parker 

We know its you.

haha, that's awesome.  i agree.

 i am an independent musician and i completely agree with the black keys. i dont care about the suits, i am concerned about the ones that are putting out great music for fans to hear and they should definately be properly compensated to continue to go on and some, one way or another, i dont have the answers for musicians but i know that streaming music services is definately not a good thing for musicians or fans.  meshuggah's new album just comes out today, and i am getting the 'physical' cd today bc i want it as a fan

 

for heavy electronic music (not cheesy, hip ,dance music) from a metalhead, check

www.soundcloud.com/firentheft

How to value a streaming subscription:

Assume you are 25 years of age and will live until the age of 75 = 50 years of subscriptions

Yearly subscription rate = $120

Total subscriptions fees paid in 50 years = $6000

Average cost per downloaded song = $1

Minimum of songs worth downloading in 50 years to make the subscription model worth the expense = 6000 songs or 120 songs per year or 12 albums per year.

I can guarantee most music consumers don't purchase 12 albums per year.

completely on the black keys on this, great music with an audience should definately be compensating great musicians. forget about these music streaming services , just not gonna add up unless your kanye west and rihanna, which only means that were gonna keep seeing them over and over and everyone else pretty much goes away, screw that, 

 

for heavy electronic music (not cheesy,hip,dance music)from a metal head check

www.soundcloud.com/firentheft

 

Spotify, its board and investors are working towards an IPO like Groupon, Zinga, Pandora etc. Problem is most of them are actually creaming it financially and are REAL businesses unlike the dotcom crash in 2001. Spotify isn't on Zynga's level (and neither is Pandora). Failing that, they'll be looking for a massive exit sometime this year I reckon. MOG's up for sale and there will be other casualties such as WE7 following suite.

He made money off of Facebook, not Napster. How does this make any sense?

This reminds me of when Lars Ulrich spoke up against Sean Parker's other music venture. Everyone jumped on Lars for it and then years later, they realized he was right.

Lars made a big mistake by coming out pissed off at the service providers and the fans.  While the problem of illegal downloading will never totally go away, at FarePlay we believe there are a lot of people who will respond to a very simple personal request.  "We are no different than you are, why shouldn't we get paid for our work." And the sentiment needs to come from the tens of thousands of blue collar musicians and indie filmmakers, not Madonna.

The illegal downloaders have owned the conversation in social media; time for a new conversation based in reality.  Its' somebody's livelihood that you are messing with.  Oh, yes and for those artists that want to give it away, be our guest.  And if that model works for you, awesome.

will buckley, founder, FarePlay

You are spot on.

The only service that does give a voice to the " tens of thousands of bluecollar musicians " the labels should embrace instead of trying to obliterate is Grooveshark.

Grooveshark is giving the voice / platform to every musician to be heard and monetize on their music  Big labels dont want people spending their "entertainment money" on many smaller indies instead of the Madonnas , Biebers and the likes.

FarePlay I share your sentiment.

Last I checked Grooveshark wasn't paying anybody...get real, but I think you are just trolling.

Let us face facts --- 98% of people who record will never recoup, let alone profit.  Reason?  There's too much music out there, and the average person uses it as noise. 

The average person does in fact purchase about 12 albums worth of music a year. 

If there are 1MILLION releases a year, how are you going to be heard, let alone compensated? 

 

 

 

Right on for the black keys speaking out. 

the tech industry has got a free ride by ripping off the people who create stuff. the very things there businesses are based on.   they are worse than the record labels.  at least the record labels paid a little.    

artists 99%

tech industry is 1% 

Sean Parker billionaire.  Are there any billionaire musicians? nope. 

The "tech industry" is also responsible for the majority of HOW artists make their music these days. All those lovely tools that are used, whether it be via recording or the instruments themselves, or how independant artists take those wares to market. 

It's not just delivery and consumption methods, it's not that simple. 

Sean Parker is a Billionaire because he received shares of facebook BEFORE he helped broker deals that shot it into the stratosphere and made it what it is today. 

How many people that work within the industry are millionaires?

Executives: 99%

Artists: 1%

Think on it. 

ok, so i've thought on it. what the eff are you talking about?

Let us face the real fact the average music consumer does not purchase 12 albums per year or spend $120 per year on music.

I noticed how you slipped in a fallacy between two likely facts.

You sound surprised at the amount from iTunes that artists actually get.  Themajor record companies are involved in a huge fraud to steal their artists past royalties.  We actually only get 7cents from many song sales on iTunes.  The record company treats them as "record sales".

It seems the majors are making huge sums from all the contracts signed before the idea of downloading music was even a concept.  Artists are paid on a basis that takes into account cover design, packaging, marketing and everything else that was involved in selling physical product.  They spend none of this on their back catalogue so are stealing artists royalties on a huge scale.

All the anti piracy work (including the creation of organisations like Spotify) only helps record companies and accountants and works agains the vast majority of artists.

Is the donkey image meant to represent Sean Parker or Patrick Carney? I think it is more fitting for the latter

Patrick Carney obviously understands very little about anything. First of all, Parker made his money from Facebook and Plaxo, so the first quote in this article makes no sense.

I would also bet Parker knows more about music than Carney by a long shot.

I think the Black Keys should ask their record label why they get so little from each play on all the music streaming services, and album sales in general.

 

 

based on what information do you think sean parker knows more about music than carney?  or do you mean royalty calculations, like packaging deductions, reserves and breakage clauses with regard to digital product?  i'm sure sean parker knows a good deal about that kinda thing.  but that kinda thing sure is fuck ain't music.

Sean Parker needs to really work on these royalties concerning Spotify....haven't people learned enough from him?

Whoa, weird, the Black Keys like to make money.

I believe Parker is worth $2 billion because he owns 4% of Facebook.  I doubt anyone has made billions off of Spotify yet.  

Everyone's so quick to blame the tech industry, but I gurantee you the Black Keys are doing just fine.  All they have to do is get a sync from one Volvo commercial to make up for this loss of revenue they're talking about.  

So it's all about making money. You aren't a musician to be rich, it should be about the art, not the profits from it. The whole music industry blows... Just full of commercial sell outs....

I am definitely not a musician trying to get rich. I never set out to get rich, I set out to make music and try to make a living at it while staying true to my values. I used to be able to make a very comfortable living selling my recordings on a mid-sized indie label devoted to passionate fans of Gospel & Inspirational music. A few years ago, my label went belly up and now I rely on Itunes almost exclusively for my livlihood. It pays my mortgage, literally. Fortunately for me, most of the people who seem drawn to these subscription streaming services and only want to pay a fraction of a penny per song aren't interested in my type of genre. Every article about these things seems to be about a white rock or pop band and the white billionaires who are allegedly exploiting them. I tried out Spotify recently instead of Itunes to listen for a while and its pretty entertaining. So much to choose from it's like a musical candy store. I found a whole bunch of stuff I had been looking for and wanted to buy it but there were no links to the sale of the music. Why not just provide links to song and album sales? What is wrong with that, that is what pays my bills (and many many other artists as well, I'm pretty sure). After a while I felt guilty for playing the music when I knew that the artist wasn't getting any real money for it so I stopped. But it seems like all this arguing could be addressed just by allowing Spotify to sell the music downloads instead of give it away for so little money. Does anyone see my point?  Have a Blessed Day! -- Calvin

There is no necessary logical contradiction between making art and making a living. 

 

- Versus

"So it's all about making money. You aren't a musician to be rich, it should be about the art, not the profits from it. The whole music industry blows... Just full of commercial sell outs...."

You sound like you still get an allowance.

 

Pffffffft!  bLACK kEYS.......  LAME!

Artists get even less on Spotify. I do have a few songs on there, but it's not a beneficial service.

Just felt like pointing out that I have bought about half the black keys vinyls, because once a couple of years ago I listened to all their music from freely downloaded collection at a friends place, and loved it. Eventually I'll probably buy all their vinyls. But if they ever make an album I don't like [hasn't happened yet], I'll hear it free first, but I won't buy it.

And I'll probably fork out the near-$100 for the pricey ticket to see them in concert soon.

I'm also thankful for being able to get all the out-of-print and hard/impossible to find music I can for free on the internet.

Cheers to Shaun Parker for that.

If there is an artist I feel strongly enough about, I buy their shit. Granted, not everybody has this mentality.

Artists need to claim back from record labels and music-business tyrants. I'm not risking AU$30 and upward on a CD like I used to when I was younger and stupider. No way.

They should demand that albums be cheaper and artists paid more. 

anyway, everything is fucked, what else is new?

Etc.

Just felt like pointing out that I have bought about half the black keys vinyls, because once a couple of years ago I listened to all their music from freely downloaded collection at a friends place, and loved it. Eventually I'll probably buy all their vinyls. But if they ever make an album I don't like [hasn't happened yet], I'll hear it free first, but I won't buy it.

And I'll probably fork out the near-$100 for the pricey ticket to see them in concert soon.

I'm also thankful for being able to get all the out-of-print and hard/impossible to find music I can for free on the internet.

Cheers to Shaun Parker for that.

If there is an artist I feel strongly enough about, I buy their shit. Granted, not everybody has this mentality.

Artists need to claim back from record labels and music-business tyrants. I'm not risking AU$30 and upward on a CD like I used to when I was younger and stupider. No way.

They should demand that albums be cheaper and artists paid more. 

anyway, everything is fucked, what else is new?

Etc.