On Wednesday, Brooklyn-based Projekt Records pulled its catalog from Spotify, while blasting the company as ‘not a viable way forward for the music industry’ (article and full letter here).
Now, Spotify has offered this detailed response to Digital Music News, which includes direct challenges of several parts of the Project missive.
We asked about specific, details payouts shared by Projekt, in particular a $0.00029 per stream royalty. This was Spotify’s response.
“Spotify does not sell streams, but access to music. Users pay for this access either via a subscription fee or with their ear time via the ad-supported service [just like commercial radio] – they do not pay per stream. In other words, Spotify is not a unit based business and it does not make sense to look at revenues from Spotify from a per stream or other music unit-based point of view. Instead, one must look at the overall revenues that Spotify is generating, and how these revenues grow over time.”
Projekt referenced an extremely low payout for Lady Gaga, which Spotify says was mis-reported by the Guardian years ago.
“The Lady Gaga rumour to which your article refers is totally false.
“It relates to a short period of time, just after Spotify had launched back in late 2008, and is not an accurate or current reflection of the total royalties paid out to an artist and composer like Lady Gaga. It also only relates to royalties due from STIM (the Swedish collecting society) in respect of plays in Sweden ONLY and none of the other markets.
“It is also important to note that the STIM royalties were performance/publishing royalties, exclusive of royalties for the master rights paid to the record company (unlike US terrestrial radio, we actually pay for master rights, in addition to public performance), and excludes the royalties paid to Lady Gaga’s record company across all of the launch markets over the previous 12 months. To get a little technical here, “Poker Face” itself was classified as a ‘split track’ at this time (meaning the song was co-written by a Swedish and US composer), so only a fragment of the money was paid to the Swedish composer who is a member of STIM.
“This figure would only represent one of several revenue streams for the Lady Gaga track in only one country (ie. Sweden), at a time when Spotify had literally just launched. We compensate collecting societies, who pay on to publishers, and the record companies (who in turn compensate the artist and songwriter) for use of a track.”