Spotify will be #2 in 2013 when it is expected that the company to generate over $1 billion in revenue?

Itunes:  #1 source of music royalties

Spotify:  #2?

Amazon:  #3?

Soundcloud will be around for a while, but the rest? Even their names suck...

you sound like you know what you are talking about. it's kind of you to offer that analysis for free. do you have a newletter that I could subscribe to?

"it's kind of you to offer that analysis for free"

Indeed, hope you're taking notes.

Huh, David Pakman just told Congress that labels are scaring away investors.  Really they are only scaring away some investors for some kinds of startups but majority of the investment here is for licensed stuff.

RapGenius.com - $15 Million / Andreessen Horowitz

This article should be posted for all indie musicians that work 40 hours a week in a fast food joint or call center then spend every other moment creating and performing music.

i am excited by this, the stimulus package is actually risk takers who are passionate about their craft being able to cut out the middle man. Thanks to people like you and sites that help educate artists on the business side of things...there is hope that we will always hear great new music...and hope that more artists can make a full time living doing what they love and staying out of the cubicles and uniforms.

Im going to retweet this to my people and use it to motivate all those around me.

Thank you

Michael Antonio Brown

contact@cultivatedthemovie.com

"This article should be posted for all indie musicians that work 40 hours a week in a fast food joint"

Are you ironic, or do you actually think investment in Spotify and other parasites is good?

Tesco bought WE7 in June for about  $15M.
http://www.guardian.co.uk/media/2012/jun/14/tesco-buys-we7

It's actually $17.5M

I wasn't including acquisitions (M&A), but perhaps something I should consider for later (for this list or another one).

/paul

unfortunately not sure what this really means for artists' pockets.... more pennies???

"unfortunately not sure what this really means for artists' pockets.... more pennies?"

No, less.

There is only one way to make more money: Make people buy our stuff. 

To achieve that, we have to:

1) Make awesome songs.

2) Stop mainstream piracy.

3) Boycot streaming services.

C'est le marche FR de la Prod!

"Are you ironic, or do you actually think investment in Spotify and other parasites is good?"

"There is only one way to make more money: Make people buy our stuff."

99.5% of you won't make more money regardless of what you do.  The math doesn't add up any other way.  Kill Spotify you won't make more.  You can't MAKE people buy your stuff- regardless of how good it is.  I've worked with over 500 acts in one capacity or another for the past 20 years now.  Between 10%-15% of these acts now do nothing but perform and record full time, leaving 85-90% to slog it out.  Let's do some math.

Assume $200,000 a year revenue.  15% to booking agent + 15% management fees = aprx $60,000 = $140,000 net.  Of the net, factor in promotion costs, travel expenses, manufacturing costs, recording costs etc.  What's left?  Even if you had $140,000 left, the taxes on that would probably amount to at least another 30% or aprx $40,000... now you have $100,000 to share and pay expenses.  Assume 5 members that need to be counted into the deal.  Have you deducted your costs yet? 

How do you get to $200,000 revenue?  Assume 5 members .. assume avg bar gig at $400 - and avg festival / muni gig at $800.  Assume you do as many of one as another ... so the average pay is $600.    That's 333 shows in one year.  Not gonna happen is it?  Now, assume you average 200 people attending per performance (a bit high for a local DIY band, but what the hell, it's just for the sake of math).  Assume 10% sales to attendance record, or 20pcs of merch per event at an avg of $10 per event.  That's an additional $200 per event in merch sales.  So, now raise your avg rev per gig to $800 ... that's 250 shows ... again, not very realistically acheivable. 

Here's the more likely scenario for a strictly DIY act in most regions.

Avg club dates per year = 50 x $400 avg = $20,000
Avg fest/muni dates per yr = 10 x 800 = $8,000
Aprox value of merch sales = $10,000
Total aprox gross revenue for a local band = <$40,000

If you keep $.70 on avg of every single you sell you would need to sell 10,000 units to make $7000.  How many local DIY projects can move 10,000 units online?  Anecdotal evidence suggests <.5%

Kill Spotify?  Sure - go ahead.  Kill Pandora?  Sure - go ahead.  Don't forget the days of Napster 1 or MP3.com ... neither of them worked out well either ;) j/s

Signed lovingly,
Your friendly neighborhood talent buyer

Wild West.

Need to get this £££ into MAKING music too.