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"This is a tough business to be in," MOG executive Anu Kirk told an audience at Digital Music Forum West on Friday. "It sucks that right now artists are getting paid so little
money by subscription services, but it sucks that artists are getting paid so little money by everyone. Subscription services are paying out what they can, but there's just a lot of music."
So, sucky payouts from subscription services like... MOG? Well, exactly, though Kirk mostly focused on Spotify and its recently-shared $0.04-per-album payout rate, which shrinks to $0.004-per-play assuming ten tracks per album. That was what Spotify recently paid the band Uniform Motion, which gladly shared the fractional pittance with the world (the complete breakdown is here).
But Kirk pointed to a broader problem of artist poverty that goes far beyond subscription services. And to make that point, he offered the following stats related to album sales (most likely citing US-based Soundscan figures):
● Album releases, 2009: 98,000
● Number exceeding sales of 5,000: 2,058 (2.1%)
● Number exceeding 10,000: 1,215 (1.2%)
● Number exceeding 1,000,000 (platinum): 22 (0.02%)
Conclusion? CDs are a tough sell, even though the payouts are much, much higher. "Selling CDs is really hard," Kirk said.
But Kirk used a far broader canvass of payouts from a range of services, all of which, basically, suck. That includes FM radio, which pays $0.00 (to the performer in the US). Or, Pandora, which (according to Kirk) pays $0.001 per play. Or, Sirius XM Radio, which pays $0.002. "They're still kind of scraping by," Kirk remarked on Sirius, while also noting that Pandora is still not profitable.
But what exactly are MOG's payouts to artists, especially given its recent shift towards free access? "The real answer is that it varies month to month," Kirk offered, speaking broadly on the topic (we've heard that one, or some variant thereof, before). "The real problem is - we shouldn't be arguing over fractions of a cent. The real discussion we should be having is how we get more people to listen to more music, and appreciate it more. That's our real problem."
Report by Paul Resnikoff from Digital Music Forum West.
Comments Closed
@enjoybananafish Friday, October 07, 2011
Marc Chirico
So then labels knew how much their artists were going to get when they signed with subscription services?
Joda Friday, October 07, 2011
Yes. Labels knew how much (or little) they were to get from the sub services. That's the reason for the high upfront advances.
Maxwellian Friday, October 07, 2011
yeah right. So MOG pays huge advances to major labels, then says sorry artists this is all we have left! #weak
HansH Friday, October 07, 2011
"The real discussion we should be having is how we get more people to listen to more music, and appreciate it more. That's our real problem."
What a stupid statement. People are listening more than ever before. The problem is that the majority doesn't want to pay for it.
MDTI Friday, October 07, 2011
Hi Hans,
on the contrary, this is exactly the problem and I could really write pages and pages on that precise subject.
There is absiolutely no education about sound quality, no innovation that is put forward: look at the movies, HD screen and all that ecosystem based strictly on the added value of a better, crispier image... even for movies that already existed in vhs or dvd.
This concept is absent from the mainstream consumer of music, while a selling point in movies, games, luxury... quality is what save people.
It can be said that the music industry as whole as chosen a path is more a resistance to this kind of improvement.
It is treated by the music industry as a commodity, and so consumer perceive it as well.
It is as simple as going to your headphone store, test all that they have in display, and realize that with the exception of a couple of brands, most of this is marketing and sound like crap. Or when a guy requires strict "broadcast quality" music (44.1/16bits), while you are already producing better than broadcast quality for a while now (eg, 24 bit). so basically, you are esked to downgrade your production standard.
I will probably not prove it in 10 sentences, but people are not "listening" to more music than before: music is more present and we "hear" it more but in much worse conditions than, say, in the 70's or 80.
Seen how music quality is put forward, there is nothing undeserved in perceiving music as a commodity and not giving it its real economic value.
HansH Saturday, October 08, 2011
Hi MDTI
I get your point. That indeed is a part of the problem. We hear more music but listen less. True.
I think that has to do with the fact that we now have easy access to music. All songs are just a click away. In "the old days" you had to go to the record store came back with this one album and listened to it over and over again. You took the time to actually listen. Maybe not because you wanted to but you had no other option.
No offense, but unlike you I don't care that much about sound quality. I care more about the quality of music. A good song is good even when it is 64 kbps MP3. Nowadays I mainly listen over my PC speakers and enjoy music more than ever before, because good music is still made every day.
Before I discovered Spotify I used to download the music mainly from illegal sources (downloading is still legal here in The Netherlands) I have not bought a CD for over 8 years. Now I pay 10 Euros a month for my Spotify Premium and spend about a 1000 Euros a year for concert tickets. I still download some albums every now and then, but only when they are not available on Spotify. Spotify tumed me from a "hard core pirate" into a paying customer and trust me I am not the only one.
Back on topic. I agree that the pay out by Spotify is still low. But I'm sure it will change for the better. The streaming age has just started. Streaming will provide more income, it just takes more time. The good thing is that the income will stay as long as people are listening to your songs. That will reward good music the way it should be.
@IndMusicMedia Friday, October 07, 2011
Ind Music Media
This is a useful article.
nathan Friday, October 07, 2011
now MOG? This guy is pissing on us and telling us it's raining. I agree with the guy Max above that the major labels got the king's ransoms leaving nothing for anyone else. now you've got every service blaming this on the general state of things --- bollocks
but why I don;t understand is why people -- WE - put up with this. 90% of everyone with an important catalog is reading these articles so we can simply pull out and bury these services overnight.
REMatwork Tuesday, October 11, 2011
@HansH Agree 100%. It doesnt get more off-base than to say:
"The real problem is - we shouldn't be arguing over fractions of a cent. The real discussion we should be having is how we get more people to listen to more music, and appreciate it more. That's our real problem."
You have the wrong model.
You do nothing about counterfeit music.
... and you blame the artist for not making music compelling enough??
This California Gold Rush to streaming apps, all the while the developers just "hoping" the payouts will be substantial ... has just got to stop. It's killing music. What happens in 2 years and all these streaming services are gone and all the users are even more inured to having free music? Answer: even less paying for music than there was before.
I am not against streaming apps on principle ... but it's no good putting forward a streaming app unless you fix the ecosystem first.
Solutions to this problem take hard thought, plus everybody in the industry pulling together to come up with a cooperative solution. We have come up with one possible solution and would appreciate some engagement on it. If someone has an alternate idea, we're all ears.
http://digitalcontentexchange.blogspot.com/
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