3 Slight Problems With Pulling Your Music from Spotify…

Sure, Spotify pays ‘f*&k all,’ as Nigel Godrich put it.  The only problem is that these guys pay much worse (screenshots taken this morning).

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49 Responses

  1. Visitor

    “these guys pay much worse”

    The paradox is that Google does belong in this context, while YouTube doesn’t.

    Sure, YouTube pays a little less than Spotify — to indies — but it doesn’t necessarily cannibalize sales because you can upload and monetize everything, not only complete songs.

    That makes a huge difference.

    As for the Piracy Industry, there’s only one solution: Kill it.

  2. GGG

    Youtube definitely doesn’t cannibalize sales but Spotify definitely does? Your pro-youtube and anti-spotify crusades don’t make sense together.

    Not to mention, just because you have stuff on Spotify doesn’t mean you can’t monetize the other things on Youtube. I feel like sometimes this argument tries to say it’s one or the other. You can make money from Spotify and Youtube at the same time, you know.

    • Visitor

      “Youtube definitely doesn’t cannibalize sales but Spotify definitely does?”
      I said: YouTube doesn’t necessarily cannibalize sales!
      And that is a fact, GGG.
      Behind-the-scenes videos, interviews, short song previews, etc. can be monetized on YouTube — but they’re not in any way replacements for complete songs.
      So they don’t cannibalize sales.
      They’re just appetizers.

      • GGG

        Right, but watching non-music clips and youtube paying royalties for them is a completely moot point here. There’s not one person in the known universe advocating youtube should be replaced by Spotify or that those videos should be taken down. So what does it matter if someone watches behind the scenes clips then streams on there or Spotify? Actually, it’s about 3 times better for the artist if that fan switches over the Spotify to listen to the track.
        I just don’t get the disconnect here. You seem to try to be convincing people that the 100M+ people who listened to, say Radioactive by Imagine Dragons on Spotify would have bought it otherwise, so ID lost $70M. But the 38M that played THIS video all bought the song, too? So YouTube isn’t bad? If you want to point me to current statistics that say youtube users buy songs they stream in any substantial amount, I’ll gladly concede the point. But until then you can’t just arbitrarily say youtube streaming doesn’t eat away sales but Spotify does.
        Auxilliary videos are beside the point.

        • Visitor

          “watching non-music clips and youtube paying royalties for them is a completely moot point here.”
          “Auxilliary videos are beside the point”
          Well, I suppose that’s where we disagree.
          When I look at the market, I see one picture. I don’t see a fragment titled Songs and another titled Interviews, etc.
          It’s not like: This guy wants to buy a song, this girl wants to see an interview; he wants merchandise, she wants to know which microphone the singer used, he wants autographs, she wants to know the meaning of the lyrics, etc.
          There’s just one picture. And YouTube is superior in my eyes because it delivers on so many accounts, all the way around.
          But just to be clear: Complete songs on YouTube obviously cannibalize sales as much as Spotify streams.
          YouTube just happens to be a better service for artists because you can make a decent amount of money without ever uploading a complete song.

          • Me

            “YouTube just happens to be a better service for artists because you can make a decent amount of money without ever uploading a complete song.”
            You mean through advertising? Are you trying to say that musicians should not worry about making money w/ music and just focus on selling ads?

          • Visitor

            “You mean through advertising?”

            Again, what makes YouTube significantly more appealing to artists than any other streaming service is that you monetize everything:
            Interviews, direct messages to fans, behind-the-scenes videos, song previews, merchandise info, etc.

          • Visitor

            “But what if someone else uploads your whole song?”
            You obviously don’t know how YouTube works.

          • jw

            Got me there. Youtube… what is that? How does it work? What’s an internet? Is the internet the same as AOL? Can I get to youtube through my AOL?
            Keyword Youtube?
            Someone help me out here, I’m so confused.
            *Written while uploading your music to youtube.*

          • Visitor

            “Someone help me out here, I’m so confused.”
            Obviously. Here’s a clue.

          • jw

            ContentID is the answer if you own the rights to your music. But what if your record label doesn’t upload your stuff to ContentID? Super 8’s entire record is on YouTube (at terrible quality, but it’s there) & nobody is making a penny off of it except youtube.
            Related issue: Can you make money off of an interview without being a YouTube partner? If it doesn’t actually have any of your music in it?

  3. Visitor

    “Super 8’s entire record is on YouTube (at terrible quality, but it’s there) & nobody is making a penny off of it except youtube.”
    How do you know nobody makes money from it?
    At any rate, there’ll always be grey areas where you have to improvise to find a solution. And orphan works can be complicated. There are companies that can help locate and monetize videos that slipped under the radar. Jeff Price started such a company recently.
    “Can you make money off of an interview without being a YouTube partner? If it doesn’t actually have any of your music in it?”
    YouTube is not a music service so you can monetize any content you own. And no, you don’t have to be partner anymore.

  4. Tune Hunter

    Yes! We have to kill it!
    70% will vanish if we go to Discover Moment Monetization.
    The music lover has to separate with cash at the moment when he has goosebumps.
    Radio display cannot have artist name or song name – it should display of Shazam or Soundhound or iHunt ad for instant purchase or addition to play list.
    Shazam and all other ID guys (including lyrics ID services) should get 1/3 of the sales price of the tune.
    The new price should be no more than 49 cents (purchase or add to play list – suit yourself) and go as low as 29 cents for person prepaying 100+ tunes at one time.
    Moderate promotion of the new way will eliminate info to go to pirate site or you tube and we will double the industry in two years.

  5. Visitor

    The biggest news here. . . Grooveshark is still in business?! Are they still trying the “but we’re going legitimate once you give a license” strategy?
    Paul it was so much more fun when you were after those guys. What happened?

    • Paul Resnikoff

      It was much more fun? FUN? Glad this is a spectator sport for you.
      Grooveshark is still pursuing their original subpoena against Digital Music News; it’s on appeal in the State of California.

      • Visitor

        Don’t let them get you flustered. You seem to be the only journalist that has ever paid much attention to their model. Probably more scared of you then you are of them.

        • jw

          For what it’s worth, I looked for Super 8’s King of the World the other night & couldn’t find it anywhere (legally or otherwise… not even on private torrent trackers) outside a really shitty quality copy on youtube. The best I could find was a $9 + $4 S&H copy of the whole album on cd from a third party resaler through Amazon, & I only had nostalgic interest in one song & didn’t want to wait days for shipping.
          Turned out there was a ~256kbps copy on Grooveshark, had it downloaded in 10 seconds.
          Grooveshark’s existence, or at least the exhaustiveness of it’s catalog, does raise certain issues. And Super 8 is a Maverick release from 1996, think of how much stuff from the 50’s/60’s/70’s is falling through the cracks, only to be caught by Grooveshark.
          I’m not in any way justifying Grooveshark’s business practices, but there is something to be said for allowing the masses to fill in the holes that the rights holders are inevitably going to leave.

          • jw

            Correction, it was a Hollywood release, not Maverick.

          • Visitor

            “I’m not in any way justifying Grooveshark’s business practices, but”
            I’m tired of your buts, jw.

  6. brian

    It was indeed interesting hearing this announcement from the music world’s first poster boy for “pay what you want.”
    I agree with Bob Lefsetz’s thoughts that streaming has won the distribution war, but David Lowery (The Trichordist) also pointed out that the reason these guys can get away with paying such low rates is because of the decade or so of unlicensed streaming and downloads.
    I liken it to the price of gasoline and how consumers have gotten used to paying 4 bucks a gallon today; over time we’ve gradually been trained that $3.50 is a “really good deal.” Of course the fundamental difference is that you can’t really get free gas like you can get free music over the internet, but it’s like the techies want the artists to accept their micropennies because it’s greater than zero, on top of the oft-repeated “free publicity” and “pirates spend the most money on music” lines. I know, it’s not a perfect comparison. Cut me some slack, I know musicians are generally sexier than oil executives!

    Anyway, certainly artists should be compensated for providing the raw materials for these streaming companies to operate their businesses, but they would be wise not to repeat the Napster mistake, too. The consumers’ desire to get free stuff, as well as myopic decisions by music executives, helped create this mess. There’s gotta be a solution in the middle that ensures fair compensation of all involved, and at a price that won’t drive consumers to illegal alternatives.

    Make it easier than stealing.

  7. Visitor

    $3.50/gallon gas is a great deal, far below the true market value would be without billions in subsidies. Hell, $4/gallon is a great deal.

    • brian

      Why, yes, I am writing this from the US, lol. Thank you for reminding me how it’s cheaper here than other parts of the world.

      That kinda plays into this though, now that I think about it. The gas powers the cars in pretty much the same way, much like a song will sound the same whether it’s streamed or a purchased download, or physical media. Regular gas for basic cars are like 128kbps streams, and uncompressed audio is like premium, high-octane for the audiophiles with high-performance sound systems (perhaps in their luxury cars). I suppose the different oil companies would then be like the different distributors.
      Or something. Maybe what this all means is that I need to switch to decaf.

      • Visitor

        That or we need to get the US gov’t to subsidize the music industry like they do just about everything else!

        • ironic

          Umm, actually it currently is the other way around.

          Goverment MANDATES that SongWriters SUBSIDIZE streaming services for some reason…
          … it’s called a ‘compulsary license’ (look it up), and if that wasn’t bad enough they even Dictate the PRICE! (rate courts)

  8. Visitor

    “I agree with Bob Lefsetz’s thoughts that streaming has won the distribution war”
    It’s amazing that some of you still believe in that fairy tale.
    Now, MegaUpload’s fall in January 2012 marked the beginning of the first internationally coordinated war on piracy ever: New tough anti-piracy laws all over the world, hundreds of torrent sites and lockers blocked and shut down, payment processors boycot piracy sites, huge fines to pirates and organized copyright crime sites, etc.
    And we recently saw the first result:
    Music sales rose in 2012 for the first time in 14 years:
    Source: Financial Times, February 26, 2013:
    But you still believe that a bunch of clueless criminals are going to outsmart the rest of the world?
    I don’t. And streaming will die immediately when we stop mainstream piracy. There’s zero chance any rightholder will give her work away for .005 when she can get .70. (And no; not every stream translates into a lost sale — but many do!)
    Here’s the truth:
    Streaming was a reaction to mainstream piracy.
    Remove mainstream piracy from the equation, and streaming is dead.

    • Visitor

      I disagree.
      If you remove “mainstream piracy” and I am suggesting a hypothetical world where piracy is removed completely, then many more people would be willing to pay for music streaming services like spotify. and in theory copyright holders could negotiate higher rates from spotify.

      • Visitor

        “I am suggesting a hypothetical world where piracy is removed completely, then many more people would be willing to pay for music streaming services like spotify. and in theory copyright holders could negotiate higher rates from spotify.”

        Nobody would consider streaming for a second in a world without mainstream piracy, unless rates were at least 10 times higher.
        Why would they? Rightholders want to be paid as well as possible for their work like everybody else.
        And rightholders can’t negotiate higher rates at all. Spotify loses money already.

        • Visitor

          Hell yes! Once we will piracy we can go back to selling $18 dollar CDs with one or two good tracks on them just like it should be.

          • Phuck Oph

            poor little baby millenial has to spend money to get what he wants…..poor baby…
            once again, a great logical argument from a whiny little baby.
            Yeah $18 is SO comparable to .004 cents. But you’re such an expert on the mob days of the record industry, right? You’re like the old republican using WWII as a justification for Iraq and any other dirty war. The old way was SO bad, that any new ripoff you come up with that benefits boomer, gen x, and millenial tech profiteering criminals is therefore better than the old mob ways.
            Please come up with a new, relevant argument some millenium, bubby.

          • Visitor

            That millennials baby is going to fix most of what your gen-x/boomer generation squandered. They won’t be fighting through 2 world wars (at least we should hope not) like your grandparents, but they will shoulder the burden you left just fine. Not because they’re some super gen, but because they have to. You may have amounted to something too if you weren’t handed 60 years of prosperity won from the work of those that came before.
            The old music industry was based on price gouging. Nothing wrong with that, this is capatilism right. The pendulum has swung the other way and now your lazy ass generation can’t adapt. You know who is great at adapting?

          • Bandit

            So rationalizing music piracy has been reduced to a “You are old pops and you don’t understand us cool kids” argument.
            Sheesh! At least I admit that people simply want something for nothing

  9. Yves Villeneuve

    Sorry that I missed the Norwegian article but still relevant to this article.
    Clearly, countries with the highest GDP per capita in Europe can afford 10 Euro per month on music subscription.
    According to IMF, top 5 European countries with highest GDP per capita and ahead of USA.
    1. Luxembourg
    2. Norway
    3. Switzerland
    4. Denmark
    5. Sweden

    • Visitor

      10 cents for initial stream plus 7 x 5 cents for conversion to full ownership at 45 cents. No subscriptions of any kind just weekly or monthly billing for actual activity.
      Most important is to Convert all ID services – lyrics and Shazam style to mandatory purchase – they are the biggest catalizers of piracy!

  10. Me

    What if instead of paying per stream, artists licensed their music to streaming services at a negotiated fixed rate, like the streaming TV/Movie services? Better known artists & labels w/ more clout could negotiate a higher rate.

    • Faza (TCM)

      That could possibly work, but there are two snags:
      1. It’s unlikely that anyone other than very popular artists would get paid very much. The sheer number of rights holders involved would mean that there’d be too many deals to negotiate individually. Thus, most folks would find themselves presented with a basic take-it-or-leave-it figure which is unlikely to be reflective of the true market situation.
      2. The real problem with Spotify at al. isn’t so much what they pay (though that’s what we end up talking about, since it’s what’s bugging artists) but what they charge. However you look at it, ten bucks a month for every song out there (which is what they’re aiming for) is a bargain. It also means that there isn’t going to be a lot of money (relatively speaking) to go around when it comes to paying for licenses. The way the current deals are structured means that rights holders (artists) subsidise the service, by way of low royalties. In order for them to get paid more Spotify would either have to find another revenue source (unlikely) or milk its existing sources (subscriptions and advertising) a lot more. If that were to happen, it would have already (my guess: it hasn’t happened because the Spotify management don’t give a flying burrito about profitability, but are instead concerned with inflating company valuation in anticipation of a liquidity event, see Pandora’s Million-a-Month Tim.)

      • jw

        Anyone who thinks music fans should have to pay more than $120 per year for recorded music is off their rocker.

        • Visitor

          Hm, not sure what you mean.
          You’ll obviously pay more than $120 if you love new music and buy 50 albums per year.

          • jw

            What I mean is how many people do you know who buy 50 albums per year? The idea doesn’t scale. Period.
            I buy more than 50 records per year, but I would never consider paying more for Spotify to replace my vinyl. I don’t know a single person who would even consider buying 50 cds per year, nevermind 50 digital download albums per year. That just seems like throwing your money down the toilet.
            Thinking of fifty 256kbps m4a files as being worth $5,000 is just a hilarious thought to me.

          • no clue, eh?

            We are not paying for the digital files, you moron. We are paying to support new artists and help them produce more new music.

  11. a streaming service staffer

    Exactly how many of the artist deals are you thinking about?
    1000? 10,000? 50,000? more?
    Who is going to manage that process for the service? Think about the infrastructure needed (licensing, legal, finance, accounting, business support, et al)
    Fixed rate? How do you do that? Base it on stats from a month ago doesn’t account for the service’s growth that is occuring on a daily, weekly and monthly basis.
    Is a song worth the same amount as a new release, then 1 month later, then 6 months later, what if a year later but on a big tour or sync placement. This concept was floated by Nigel Godrich and it doesn’t work from a licensing perspective. Why would legacy artists want to subsidize every new artist whether it was Radiohead’s side projects or a CDbaby, tunecore, Ditto Music artist that will stream 200 times max? Wouldn’t jazz and classical artists think they are entitled to a higher rate because of the length of their songs? Or world music artists and labels think their music in their home countries should be paid out at a premium than non-local music?
    The variables are endless. and this is what happens when you have people (fans, aritsts, uneducated label owners and the rest of the peanut gallery) throwing shit off the top of their head and having no experience implimenting their ideas.
    What artists currently have this right/ability you talk of? Not many. It’s labels, and their distirbutors and aggregators. The artists who have been screaming about this need to ask their labels what did THEY get paid and ask to see what the agreement with the service looks like so you know what you are talking about in the first place. If you can’t get access to that information, then maybe you ought to rethink the types of deals you do as an artist. I would think the fractions of pennies you feel are missing pale in comparison to the other ways a label may be holding money back.
    Streaming subscription is a simple concept. There is a pool of money generated by companies working hard to get users to pay a subscription. That money gets split up between the direct sound recording licensors and the publishers. When you get a statement from someone, inevitably there will be a lump sum and a breakdown of what was streamed. If you want to look at it as a per stream rate, you can, but it’s a particular song or artist’s or label’s pro-rated share of the revenue based on how often your music was played. Get more plays, get more money.

  12. Rick Ellis

    As a consumer of music (I’m not in the industry, though I’ve followed it since I was a kid), I’m constantly struck by the same tired arguments I hear in here again and again.

    Has it ever occured to anyone that the effort to get the music back to the “good old days” is a fool’s errand? It’s not just that technology changed the business or that there are more competition for the consumer’s wallet.

    That “golden” period of the music industry might just have been a bubble. The revenue stream was driven by a number of factors that can never happen again, even if the Internet was shut down tomorrow. Singles went away, forcing music fans into buying albums & CD’s at a price that effectively fixed by the labels. The only real place to hear recorded music was on the radio, but since this was pre-consolidation, consumers really used it as a music discovery service, since playlists in all but the biggest markets had some wiggle room for new acts. That big revenue stream also helped keep down concert prices, since live performances weren’t the principle revenue stream for a lot of acts. Until the mid-late 70s it was common to see a top act and a couple of familiar-named opening acts for just a few bucks. Everything in that golden era was just a fluke of conflicting trends that can’t be recreated.

    As a consumer, I don’t get the argument that streaming a song on Spotify is terrible, but hearing it for free online through iHeart radio or on my local radio station is just fine. I get that it makes a difference to YOU. But there isn’t a business in the world that can exist on the premise that “we need to keep things a certain way despite what customers think because it makes us more money.”

    As for iTunes, there’s a really good reason that digital revenue wil never equal physical revenue. No matter how big a music fan you are, you are always aware that at the end on the day, you don’t own that digital recording. You can’t sell it, trade it or give it to a friend. And there’s not even a guarantee you’ll have access to it in the future.

    Maybe instead of whining about piracy and streaming and grabbing onto every little data point that promises some vague turnaround in the music business, it would be more useful to start from where the business has headed and figure out the best way to make money given the changed circumstances.

    • Visitor

      “That “golden” period of the music industry might just have been a bubble”
      🙂 Fortunately not…
      But you said you’re not in the industry, and I’ll explain how it works:
      See, professional music production is extremely expensive.
      Not so much because of instruments and equipment, though that is a contributing factor, but because it takes a lot of practise and work to become a popular composer or writer.
      And you can’t say that the 10K hour rule is entirely correct, but it’s very close in many cases.
      Now, it can be debated whether the golden period of the music industry you mention started with Pope Gregory I, or a couple of centuries later.
      Some would even argue that it first took off when it became common for composers and musicians to work for royal courts and nobility in late medieval Europe.
      And yes, there have been brief moments where music has been under pressure, either because of totalitarian regimes or because of piracy and streaming as we see it today.
      But one thing never changed throughout the golden period:
      Professionally produced music always found a way to be financed — simply because it’s so valuable to us all and has been for more than a thousand years.
      Nobody really wants to stop the music. That’s why piracy and streaming won’t succeed. And that’s why you see music sales rise again in 2012 for the first time since 1999.

    • Visitor

      Something going up doesn’t signal a trend. Especially if the amount it goes up by isn’t a order of magitude less than global inflation for the same year.

  13. Guy

    An alternative way to earn from YouTube is to license your music to businesses who need background music for promotional videos such as product launches, articles and tutorials.

    • don't believe the hype

      There are companies fighting in that field for the last decade or so. What makes you think you have any chance of making a decent living with them as competitors? They license tracks for $5 and their catalogs are in the thousands. Count your tracks and do the math.