Spotify has a long way to go in proving to individual artists and small focused labels that the service actually provides any value.

I agree completly and as a small record label owner, will not be submitting future releases to Spotify.

Yes, Spotify needs to generate over a $1 billion a year in order to the labels to take it seriously.

$800 million a year in revenue is not good enough.

It has nothing to do with how much Spotify makes. It has to do with how much the label & artist make. I don't believe that Spotify will be able to sustain itself because of the extremely high cost of licensing fees, but I also don't think that artists can sustain themselves expecting free streaming services to pay the bills. It's a zero sum game.

In the end, Borchetta has the right to decide whether or not he wants to play ball with Spotify. As the content owner, that's his choice. With an artist as well "exposed" and powerfully marketed as Taylor Swift, they don't need Spotify to find new fans. For smaller artists, it's debateable, but certainly as it relates to "Red," I don't believe it will cost Taylor a penny to withhold the record from streaming services until after the primary sales cycle has concluded.

Their argumet really doesn't make sense. This is coming from the company that willingly reduced their money made from online radio streams with Clear Channel to chase some fantasy dream of making money from the dying medium known as broadcast radio.

How is broadcast radio dying?  More people still listen to terrestrial radio than stream music online.

It is dying in almost every way. AM radio has declined significantly. AM stations are rapidly trying to acquire FM translators to avoid being completely dead, possibly as soon as 10 years. FM itself has shown incapable of drawing in younger audiences due to competition from online media. It also has great difficulty increasing revenue faster than expenses, which has lead to syndication and voice-tracking to cut costs. HD Radio is a failure. Station values are at record lows and falling. The whole industry is really performing quite poorly. Continued consolidation may be radio's only hope at staying afloat.

Yeah, let's leave people who invest $120 a year in the cold and ignore 15 million music lovers.

How about this solution?

• Release the album on Spotify as a Premium exclusive
• Show Free users buttons to buy the album or upgrade to Premium
• Reward Taylor with $10 for every user who upgrades to premium because of her album.

Label happy, Spotify happy, Premium users happy, Taylor happy.

This is what it could look like:

This really smacks of common sense.  Brilliant

Nice!

ThIS seems to be the deal killer for a growing number of labels and artists.

Is Spotify maintaining the free service in hopes that the free users will eventually convert to paying subscribers? IMO they will never convert.

Should they dump free completely?

 or Would increasing revenue by adding more adverts to the free service make people switch to premium or switch to a competitor?

someone once told me to 'never complain without a solution'.  You good sir truly rock for this. 

It isn't even close to a solution...

Why not? What's your solution?

Ya know, for every evil under sun there's a remedy -- or there is none.

Thanks for your support.

I have submitted this idea on the Spotify Community Forum.

If you still like it feel free to give it kudos.

http://community.spotify.com/t5/Spotify-Ideas/Option-for-labels-to-release-new-albums-as-Premium-Exclusive-and/idi-p/182650

I'm losing patience with Spotify. £0.007 per track, give me a break!

It's been 5 years now and no 'main stream' penetration. 

The clock is ticking

Well I hate to break the news but rates will not rize much even when mainstream penetration happens.

Do the math. Take 70% of the monthly Premium fee (the part for royalties) and divide that by the average number of streams in a month. FYI the average user listens 100 minutes per day.

£0.007 per track is not that bad BTW

It's not only bad, it's ridiculous beyond belief.

So what do you think is a fair rate?

Fair?

Well, if your music is worthless, then it's fair to give it away, no?

If I were a hobbyist, I would be happy to 'release' it on Pirate Bay or Spotify.

However, my music is valuable so I guess I'd consider Spotify if they paid, say, 50 times more.

A $ 0.35 payout per stream is possible but would require a $500 monthly fee. 

Reality sucks sometimes.

Well, that's their problem, eh?

I guess it's more your problem

That they can't make money? :) Not really.

They can sell t-shirts for all I care.

Artists need streaming like a hole in the head.

Rhapsody and Spotify are going to die.  Unless they start selling t-shirts, or something.

Rhapsody's been going strong for 10 years now.  What makes you think they will fail now, when streaming is more popular than ever before?

Because the Pirate Decade is gone.

All the new laws and initiatives we see all over the world are extremely effective.

An awesome example is the British Pirate Bay block. It resulted in 75% less visitors, according to BBC/Nielsen:

http://www.bbc.co.uk/news/technology-20026271

Now, hobbyists will still stream. And that's just great.

But professional artists no longer need to compare with free.

The race to the bottom is over, and you'll see a lot of big acts leave Spotify and the rest over the next months.

Days after the Pirate Bay blocking, various other services were set up allowing users to access the site through alternative means.

One ISP, which did not want to be named, revealed that despite an initial dip, illegal download traffic on its network recovered quickly within just a week of the Pirate Bay block.

Oops -- you forgot the conclusion of the article . :)

Here it is:

"[...] BPI defended the action, saying that the block had a significant effect on the amount of traffic visiting the Pirate Bay site.

This claim is backed up by Nielsen, who told the BBC that since the April court order, The Pirate Bay has lost three quarters of its visitors."

http://www.bbc.co.uk/news/technology-20026271

(My emphasis.)

And just to make it clear:

This sensational 75% drop is completely stable, according to BBC/Nielsen.

Much of the drop was also because Spotify has drawn people away from torrents, particularly in sweden where both the pirate bay and spotify are from. Take away Spotify and the torrents or other means of getting music will surge.

I'm sure I don't have to tell you how far out that comment was...

Except consumers want streaming and they are the ones with the money.

The pirate bay traffic dropped? So what? That is one site. People use newsgroups and filelockers or simply youtube these days. Torrents and the pirate bay have risks of being caught. The others... don't.

Your so called "laws" are not stoppping piracy and the "6 strikes and nothing happens" policy won't do anything either.

Huh?

If you don't know how important the sensantional and stable 75% drop in Pirate Bay visitors is, then you have some serious reading to do... :)

And all the other criminal sites are shut down at a faster and faster rate: In 2011, BREIN alone shut down 383 BitTorrent sites, 83 streaming sites, 71 lockers and 52 Usenet indexers, according to the crybabies @ torrentfreak.com:

http://torrentfreak.com/swedish-piracy-crackdown-2-torrent-site-calls-it-quits-120223/

Oh, and exactly what has YouTube to do with anything?

They have a very effective take-down procedure, AND content owners are paid -- no matter if their property is uploaded legally or otherwise.

The Pirate Bay is old. Did Myspace's decline mean social networking declined? Certainly not. The pirate Bay's decline does not mean piracy has declined either. In some areas however, piracy has declined. Areas particularly where Spotify and Deezer are active.

What BREIN does, does not really matter. Downloading music from torrents is legal where BREIN operates. It only takes 1 site to supply everyone's music needs. Needless to say there are thousands of websites supplying music illegally and more appearing everyday. Whack-a-mole is a losing game. Really no more easily won than antivirus vendors fighting off computer viruses/trojans. It is a never ending game.

Youtube only pays for songs that their system detects and only removes music that the copyright holders demand removal for. There are millions of songs they do not detect. Even songs they pay royalties for are still easily downloaded. Then no more royalties are paid. A person could download Taylor Swift's entire Red album from youtube, for free. And in pretty good quality, possibly better than iTunes.

The difference between you and me is that I provide documented facts, numbers and links, while you post weasel words, unsubstantiated opinions, hearsay and nonsense.

Please post documentation for your claims, including the one about the "millions of songs" YouTube don't detect.

"If you're a big battleship like Sony or Universal and have tens of thousands of masters, that income stream makes sense at a big corporation. It doesn't make sense to a small record company."

But it does make "CENTS".

Truth is, it seems it doesn't even make "cents."  I handle a handful of artist accounts, one of whom was on Atlantic, and then two smaller independent labels over the past 30 years.  Solid stuff with a solid background including several late night tv show appearances in the 90s and early 21st century. 

Approximately 85% of the revenue stream I've accounted for has come from shows, cd sales at the shows, and merch sales.  About 10% has come from any kind of online sales whether digital or cd sales.  If a stream doesn't lead to a sale, it's pretty much worthless IMO.  I'm taking one of my artists into licensing this next year... TV is the new radio.  

Sell a full length cd for an avg of $10 at a show.  How many streams does it take to get to $10?  At $.01USD it would require what, 1000 streams?  Really?  Play to 1000 people - assume you'll sell to 10% of crowd (100) at an avg of $10 per sale = $1000.00.   

Performance royalties account for very little in my portfolio.

But roughly how much of the $10 do they actually get to keep after everyone takes their cut and the cost of producing the CD is subtracted?

I'm sorry, I don't look at it that way.  We've got cds in our library that cost anywhere from $3500 (with manuf) to over $30,000 to produce per 1000 units.  So our business models are based on aggregate valuations.  I'm looking for annual gross revenues, then I subtract the cost of doing business. 

One thing to ask is what level of business does the artist/band strive for?  Are they a local bar band only?  A coffee house acoustic act?  A festival touring act?  Is the artist one who's work can be legitimately shopped for licensing?  There are a thousand questions to be asked before a solid plan for business can be constructed.

If it's taken you this long to "take your artist into publishing" and synch, I'd say you've had some trouble reading the writing on the wall....

Rhapsody says Taylor Swift would sell more t-shirts if her latest album was available on streaming services.  Scott Borchetta, head of Swift's label, Big Machine Records, obviously isn't buying that argument.  

... er, that isn't my comment!  The comments system has done this several times before, and it's annoying.  I didn't save a copy of the comment I did make, and I can't be bothered to rewrite it from memory.

We're working on this -- give us a few weeks.  The entire comment system is being overhauled.

/paul

http://www.bloomberg.com/news/2012-10-25/apple-s-online-radio-service-to-challenge-pandora-in-2013.html

Apparently streaming services now believe musicians should make their living selling TShirts. Not music.

I enjoy listening to Taylor Swift, but not enough to purchase her music.  There are plenty of other artists I listen to on Spotify that I feel similarly about (i.e. Coldplay, Deadmau5).

For artists/labels that wish to withhold new releases from Spotify, why not make them available to paying subscribers for 90-days as a form of 'early-access.'

I've never purchased a Taylor Swift album... but I have purchased Taylor Swift concert tickets.

Spotify is 90% of my music consumption, yet I still buy CDs for my favorite artists even if they are on Spotify.

the reality is that these arguments aren't realistic. They have never been.  

The eequivalent of a stream today, a decade ago, was me taking a CD over to a friends house and playing it for him.  A CD I purchased. So my friend technically should have paid something for every song he played from my CD at his house, or he himself heard from my CD...

This is not Spotify's error to clear up, it was a slight overlook on everyone's part.  Consider it part of the disruption.  The fact that Spotify pays a fraction of a penny on the play my friend gives a song is already huge. 

To each is own. If Big Machine doesn't want Red to be on Spotify then no one is asking. Taylor obviously doesn't need it, and Spotify users are still happy. 

Considering that most Spotify users are part of the cool kid crowd anyway, I doubt many give a shit that they can't get Swift's album on there and I doubt any of them are running to buy it....

What BMR doesn't realize is that this demographic of users is a new demographic they can tap into. It's a demographic of people that will support an album they feel is good, no matter the genre.  Spotify has opened up people to broaden the genres they listen to. How? because it's easy to, and instant. 

Somebody take that poll with Spotify users:

1. Do you care about Red?
2. Are you mad that you can't get it on Spotify?
3. How many Taylor Swift albums have you purchased in the past?