oh lord, what a trainwreck... yet another example of the "exploitation economy" in full swing... begs the question, if the internet is working for musicians, why aren't more musicians working professionally?

http://thetrichordist.wordpress.com/2012/05/21/why-arent-more-musicians-working-professionally/

You can't seperate the equity shares that the labels have and the licensing deals that Spotify has been able negotiate with the labels.  Most of the other services list their licensing fees and the potential for Spotify establishing the floor for a future compensation model is downright scarry.

There is no coincidence that Shawn Fanning and Sean Parker are involved and the irony of the situation is that Spotify was able to negotiate uber low licensing deals after a decade of illegal file sharing set in motion by Napster.

Not to mention Spotify's ability to broker a deal with Facebook, a company where Mr. Fanning has a "historic" relationship. 

Spotify does have an achillies heel.  Some artists can demand that their music be removed and by "law" Spotify must comply.

"...if the internet is working for musicians, why aren't more musicians working professionally?"

I can only speak for the state I live and work in - Colorado.  But I find the question a bit strange.  How many more musicians do you WANT to be working professionally?  We have so many now that,  when combined with acts that come through on tour, we can't book them all .. let alone book them enough for each to be making a sustainable income from performing and selling recordings.  

Also, to the idea that the Internet is not working for muscians.  The real explosion in music (live and recorded) has resulted over the past 7-10 years ---> during which we've gone from Napster and MP3.com to iTunes, MySpace, Facebook, Pandora and Spotify. 

We've gone from just over 1200 releases a year in 1973 to over 100,000 a year today.  We've gone from huge stadium shows with 3-5 touring bands per show, to huge FESTIVALS that feature over 100 bands, many of whom are local or regional.

Not everyone who desires to be full time professional can do so - but that has nothing to do with any lack of substantive help from the Internet. IMO of course.

Trainwreck?

Smells more like a Dumpster Fire to me....

Kudos to Kate for taking the kid gloves off. 

Finally. 

:EDIT:

kudos to SOPHIE for the removal of the kid gloves. 

we are making a big deal about spotify royalties because part of them are established by law (composition) and the other is negotiated between the owner of the audio recording and spotify.  so no one is forcing anyone to enter into any agreements at rates they don´t want, partly because of the law and partly because of two-party negotiations. 

Touche. 

The problem is with the DMCA, not streaming services. Everyone has it twisted.

Explain.

Shoutout to the mainstream Australian radio hosts for confronting them. That would never happen in the US.

Triple J is not a mainstream radio station. 

I use free Spotify for songs that I can't easily find on youtube.

Thats about it. 

I guess I'll never understand why in the hell people today still would choose to want to listen to a song on YouTube in shitty ass audio quality and also not know for sure if it is the true song their listening to or not. I just don't get it. Is it just because its FREE? If you truly love music, you don't choose to listen to it on YouTube. Thank you.

Who says that if you love music you have to be an audiophile?  Hmmm?  ;)

I fell in love with music on a transistor radio with a 4" speaker, and then in cars with FM radios and two speakers stuck in the front dash.

As a radio station music director and programmer I took the position to never own a stereo in my home or car better than that which the avg consumer had. 

Today, I spend 10 hrs a day online - I have an over the counter Bose system with no subs attached to my computer.  YouTube audio works just fine for my purposes thank you ;)  

... and I'm still doing music :)

If you choose to listen that way, I guess that's you're loss then.

Spotify pays about $0.005 per stream.  Of this, the artist will get a % depending on their contract with their label.    

This ~$0.005 per stream has been disclosed by NUMBEROUS PARTIES who receive royalties from Spotify as indie.

Spotidj.com/spotifyroyalties.htm for example has various documents about this.

nothin' sketchy goin on here.... no sir

Uh...huh. OK then.

Another revealing article about the deceptive dealings of Spotify and further evidence of why we opted out of the service.

spotifyroyalties.blogspot.com

Spotify is paying the rights holder around $0.005-$0.006 per stream.  

About 128 streams = 1 Itunes download at $0.99

About 164 streams = 1 Itunes download at $1.29

John:- these per stream payments are for streams for Spotify premium subscribers.

The per stream payment for free streaming users are much smaller - truly microscopic in fact.

Does Spotify release the transparent numbers of the proportion of free streaming users to premium subscribers?

Of course not!!!

As a fair guestimate based on an average between premium subscribers, midprice subscribers and free users I think a 2-250 streams equivalent to a 99c iTunes download is reasonable.

Steveh. You are wrong. $ 0.0048 is what I am getting for Free, Unlimited and Premium streams. That's the way my aggregator Zimbalam does it. I know CDBaby and Tunecore do it in some other way, but in that case Premium streams bring over 1 cent per stream.

IODA separate free, unlimited and premium.

Premium is rarely above .8 us cent

Free is mostly around 0.1 us cents

How many paid streams do you have per month?

Dunno, Zimbalam doesn't split the streams in Free, Unlimited and Premium. Same rate for every stream.

spotifyroyalties.blogspot.com

If you want to see Spotify income statement from 2008, 2009, 2010.  It also has other interesting tidbits.

John,

Just took a peek, glad you assembled that.  I suppose on one hand, your blogspot and the comments here are bringing forward lots of scattered payment information, all of which is useful.  Unfortunately, it's woefully incomplete by its nature, and could never qualify as an 'answer' from a statistically meaningful artist group.  So, to me it's a guide, and I have better working ranges in my mind.

That said, it still looks like there are increases happening over time concurrent with subscriber increases, which is a major question I've been trying to research.  Still, I'm stuck at 'anecdotally,' unfortunately...

/pr

Paul,

Since a big part of the data comes from my SpotiDJ blog I cannot resist to add my two cents.

What do you expect from infomation coming from a 'statistically meaningful artist group'. The payout per stream doesn't change a lot when an artists is more popular than the rest.

Just have a look at this article about the Swedish artist Jonathan Johanssson  who made more than $20,000 from streaming services alone in the first month of his album being available.

His songs were streamed about 5 million times in that month. That's about $0.004 per stream.

More or less the same rates I'm getting.

Too bad the Jonathan Johansson story was never mentioned at DigitalMusicNew

Why does everyone think Spotify should disclose their payments? They're a private company and it's none of your business.

If you're an artist you'll get a statement with what they pay you. If you don't like the amount then leave them like Black Keys and a few others have done. 

No one is forcing any artist on there. The market will take care of this. If artists leave, Spotify goes down. If they stay, they'll likely do fine.

But the constant harping on about this multiple times a week is getting really old.

The reason people want to see this information is because the value of the "spins" and other aspects of artist/label revenue is based on a 90 day cycle of Spotify's revenue. The system is dynamic, therefore people feel like the numbers they're seeing from them are arbitrary unless they get hard, tangible stats. 

Value of content is by no means equivalent to how something like Itunes or any other digital retailer/distributer works. They take a specific cut, from a specific number time after time, that's not the case here. 

How can an independent artist make an informed decision about signing a deal with spotify w/o knowing how and when they will get paid? Artists need to know this info before agreeing to stream thru spotify

As an artist you can't sign a direct deal with Spotify... you sign a deal with a label, distributor or agregator. It's your responsibility as an artist or manager to read your contracts with them and ask those questions to the party your contracted with. Not up to Spotify.

A single label will have different agreements with every retailer with a range of terms for an identical track (using the lowest sales unit)

Why does everyone expect Spotify to release details of their deals? Try asking Apple for their deals with labels.

Get real!

apples deals with the labels are transparent, apple gets 30%... what % does spotify get? answer please...

1. spotifys margin is less then apple

2. Spotifys business is more complicated as your payback depends on what tier the listener is on, and also on what is in the pot from subscription and ad revenue for payments in that country that month.  That said the amounts above are a good rule of thumb.

3. If you want to know what they pay then go direct to spotify via tunecore et al. If you go via a label then the label is your business partner (not spotify) and you should as them how much you get!

4. We have some artists earning more on a monthly basis on spotify then on itunes.  I just look at is as another revenue stream and a bigger overall pie and welcome it with open arms.

1. spotifys margin is less then apple

Please supply documentary proof of this.

Finally, someone who gets it!

Thanks Martin. Cooking Vinyl rocks, btw.

You're still missing the point. 

1. spotifys margin is less then apple

Spotify's margin is constantly changing based on their revenue, Apple's margin is constant. 

2. Spotifys business is more complicated as your payback depends on what tier the listener is on, and also on what is in the pot from subscription and ad revenue for payments in that country that month.  That said the amounts above are a good rule of thumb.

At the moment, it's complicated because they don't take the time to explain to anyone, and apparently they prefer it that way. This ambiguity and lack of transparency leads people to believe they're not being fair. How hard would it be for them to make a nice cute, straighforward infographic about how they work and how potentially that will work for the concerned affiliated parties in the future?

Unfortunately they keep changing the subject to fighting piracy, which is not answering the question of cannibalising or replacing acutal sales, or the potential growth of the payouts as the system scales (which apparently is happening).  

3. If you want to know what they pay then go direct to spotify via tunecore et al. If you go via a label then the label is your business partner (not spotify) and you should as them how much you get!

Some people don't have that luxury, but this would be the way to go to get the basic numbers if you did. However, it doesn't answer the question of transparency of "the pot". Right now Spotify has revenue coming in from ads and subscription, but also funds from investment capital getting thrown from every angle as well as corporate sponsors. When a right's holder's money is somewhere in that mess, it would make it easier for people to understand how that's all working in a nice understandable way, not evasive doubletalk. 

4. We have some artists earning more on a monthly basis on spotify then on itunes.  I just look at is as another revenue stream and a bigger overall pie and welcome it with open arms.

That's a complety relative and subjective point. Though I'd love to see a copy of that distro statment. 

Martin. I've checked your website http://cookingvinyl.com. One thing I don't get, not a single link to Spotify. Why is that? Can you explain?

Pete:- it is absolute basic common knowlege that Apple are fully transparent about their 30% iTunes share. This is the deal with iTunes and it is universally applied.

Everone knows this - apart from you it seems.

What rock have you been hiding under?

Do you honestly believe that Apple applies the 30% rule on iTunes with the major labels? For God's sake, get real. While I am on the side of the artist 100%, this is still business and it is a case of if you don't like it, you don't have to be part of it. There seems to be this belief that no one is allowed to make money from music these days, neither the artist nor those attempting to facilitate the delivery of music to the masses. It's the same in ticketing. While I'm sure there are some who've exploited the situation, the increase in ticket prices is not disconnected to the decline in music sales, yet the whinging from people - who illegally download - is deafening. The likes of ticketmaster and Ticketek have every right to make money, to maintain their business and make a profit. Being in the entertainment industry isn't a charity for anyone in the chain.

Actually, 

Yes. The majors play by the same rules. There was one rule that was changed for them and that's why you see pricing ABOVE $.99

Notice some things are at 1.29? that's to deal with that %30 Itunes takes across the boards. 

Everyone knows that Steve Jobs was an absolute tyrant about having everything uniform, and it was a huge deal to get every label on board (against their better judgment at first). 

He did the same with the telecoms. Some held out, they all came crawling back. 

"Do you honestly believe that Apple applies the 30% rule on iTunes with the major labels? For God's sake, get real."

Unfortunately for your hubris actually you are wrong.

Please supply proof to the contrary.

So everytime A2IM pushes the press to report market share based upon master ownership (which points out that independents are the largest single segment in the business) and the press/out of touch blog commenters question why market share matters...THIS is the reason why it matters.

Spotify absolutely does NOT pay everyone the same.  They constructed perfectly legitimate deals with various distributors and the terms - including revenue percentages which equate to per stream rates in the Spotify model, per stream minimums (guaranteed minimums should the rev percentage dip too low), and equity stakes in the company - were determined by the market share (the CLOUT) that the distributor or negotiating party brought to the table. 

To expect anything differently is naive, unfortunately.

Spotify may not be disclosing but I will !!

So from Sept to Dec either there was a dip in ad revenue or in subscriptions rates?

On September, Spotify closed registrations for new Spotify accounts and started requiring a Facebook login from new users instead. At the same time, they started spamming Facebook with every song that is played which exposed the service to most Facebook users. A large amount of new users had come to the service.

Sorry, I can not explain for the dip except that overall revenues probably were lower as of September. I will receive my new statements early June so stay tuned.

But wouldn't you WANT to know?

And shouldn't it be your RIGHT if they're peddling your wares and you're taking a cut of that revenue?

These are the things that bother many artists, you can't just say "sorry, rates are going down". 

That's what this argument is about

I would love to know, but so far I haven't been able to solve that part of the puzzle.

Spotify pays out 70% of the revenues to copyright holders before deducting operational costs. That's all I have been able to find out so far.

Aren't "operation costs" offset by people like Coca Cola and Goldman Sachs now??

Interesting, I have the same figures.

In Dec 2010, 1 stream was paid 0,00198 cts.

In Dec 2011, it was 0,0036.

In Jan 2012, revenue per stream was up to 0,0038.

Looks like Spotify is paying more now than it was 2 years ago.

Why? "Nobody" really knows... :-)

From what I heard at SXSW, they barely pay anything.

Why do journalists insist on pressing Spotify to reveal what they are paying artists? The large majority of artists get their royalties from their record label based on negotiated royalty rates in their individual contracts. These are (or should be) confidential by contract, and are clearly not the same for every artist or label. Although there may be a few artists who have direct deals with Spotify, that is a very small percentage. And what about all the other digital music services -- should the public know what Rhapsody, MOG, Rdio and Slacker pay the labels for subscription/on-demand streaming? This whole topic is a waste of time, and it has put Spotify on the defensive when it should be 100% focused on growing their paid user base and scaling the service to tens of millions of music consumers. A bigger issue, in my mind, is the major labels' ownership position in Spotify (and other services), and whether/how/should the profits that may be generated from this investment (e.g., future IPO) flow back to the artists.

Agreed.  The issue should be more about major labels having equity stakes, and why Spotify is the only streaming service that has a free ad supported option.  The per stream pays on the paid service are not so bad.  On the ad supported service they are about one tenth from royalty statements that I have seen.  So should we be concerned that the only service that has been granted the right to have a free version has a large part of equity owned by majors?  And that these shareholders will be mroe concerned about post IPO stock prices than revenue?  

Mog also has unlimited free streaming.

You can't seperate the equity shares that the labels have and the licensing deals that Spotify has been able negotiate with the labels.  Most of the other services list their licensing fees and the potential for Spotify establishing the floor for a future compensation model is downright scarry.

Intersting that you bring up illegal file sharing sites, because what Spotify has been able to accomplish is a Napster based file sharing model legitimized by paying pennies on the dollar.

There is no coincidence that Shawn Fanning and Sean Parker are involved and the irony of the situation is that Spotify was able to negotiate uber low licensing deals after a decade of illegal file sharing set in motion by Napster.

Not to mention Spotify's ability to broker a deal with Facebook, a company where Mr. Fanning has a "historic" relationship. 

Spotify does have an achillies heel.  Some artists can demand that their music be removed and by "law" Spotify must comply.

"should the public know what Rhapsody, MOG, Rdio and Slacker pay the labels for subscription/on-demand streaming"

No, but their BUISNESS PARTNERS SHOULD.

As artists, we are independent buisnesses. Alot are self-employed. If someone offers to go into buisness with you, but won't tell you the terms... RUN!

As artists, we are NOT obligated to prop up other buisnesses. If they want a mutual benifitial relationshiop... the relationship has to be mutually benifitial! Transparancy is the place to start...

EVERY artist i know refuses to hop on the Spotify train. These same artists are on OTHER (more transparent) streaming sites, so this has nothing to do with the technology... it has EVERYTHING to do with whom one chooses to do buisness with.

Until Spotify can stop their shady practices... i say let 'em go under. Fuck em. They need us a hell alot more than we need them.

Spotify pays LABELS - thats the problem- we need new distribution models.

The MD doesn't have many answers... interesting

Musicians: read this and get the word through to Kate Vale to play fare with artists not labels.

Did she actually say band manager?

Spotify, huh...

McNeill: Why?

Vale: I'm not sure.

Priceless. Literally.

"Most of the music world loves us"

He answers like the 'front runner' for the Mexican presidency...!

There is the music business and the record business ... 2 very different animals.

IMHO Spotify is great for the music business and not so great for the record industry.

The music business is about making a living playing music ... people did that for thousands of years without making $ from 'record sales'... The record industry comes along and u need a cute face, arse or tits to make a living ... most musicians who sign with major labels are more interested in fame and money than making good music.

making a living as a musician is not a right! ... you have to earn it by working and practicing hard ... and playing GREAT music.

The world has changed and it won't stop changing ... so you can't sign to a huge corporate behemoth who tightly controls all mass media and can make u rich and famous anymore? BOO HOO

Why does triple j have a spotify app if they have such a problem with it?

Why don't they just pay Sound Exchange so whatever it is they pay 50% goes to the master owner and 50% direct to the artist of that master?

Why Spotify fucking sucks.

There is a part of me that thinks the artist lawsuit du jour in 10 years will be suing their major label for a portion of both the equity and ENORMOUS up front payment that the Spotifys, Rdios, and MOGs paid for the right to stream the catalogue.  This is millions upon millions of dollars and the artists don't see a dime of it.  Should one of these sites actually emerge from the pack and create a viable business (next to impossible if you really look at the margins), the equity that the majors required will be insanely valuable and yet the artists wont see a dime of that either.

That seems way less fair to the artist than the small royalty payments that streaming services pay.

labels, maybe. musicians, not so much.

Hey DMN. I've got a great story for you. Why don't you write an article bashing Spotify? (close to unsubscribing to this old guard BS)

It is really a nice updated new and information.

playasiabd.blogspot.com

Remember record clubs?...Spotify works the same way, same game, new name!

Rights holders get paid HUGE sums in return for agreeing with miniscule royalty deals for the creators..