Most artists have no idea what they should be receiving from streaming services. So indie cellist Zoë Keating decided to publish all of her payouts from every streaming service she used in 2013.
… and, every download service as well.
Note: This is after CD Baby takes its 9% cut, except on newest releases. Written while listening to Schoolboy Q and Chromatics.
This is assuming that under-reporting plays/streams isn’t the norm.
Stating the obvious, but I think helpful to be mentioned in all of these articles: keep in mind that non-statutory rates and compensation are subject to negotiations that result in direct licenses (all subject to NDAs) between the services and distributors or labels. There is a reason that very smart independent labels have joined together in various forms. Think about it…
The larger the label or distributor, the more clout – and therefore more money – they’re able to extract from the services. Everything is market share. The larger the market share you can bring to a service the more important you are to that service. If you deliver millions of tracks that pale in terms of numbers of streams compared to the largest labels or distributors, no doubt you’re going to do worse in the negotiation. It’s basic capitalism.
Every service that publicly says that they are “paying everyone the same rate” is not being entirely honest.
Even if they technically pay the same per stream royalty rate it’s likely a rate that has been discounted in exchange for other undisclosed, unattributed revenues being paid to the larger labels and distributors that are not being shared down the line to all of their artists (or distributed labels).
No doubt artists with tremendous clout (with very smart attorneys) are being cut in on these unattributed commercial terms/revenues but definitely not the majority of artists.
I’m not sure this is how it works. I’m nearly certain all labels are paid from the same revenue share pool, though each label might have a slightly different split with the distributor. As I understand, labels and artists stand to make the most money when they get ad sponsorship deals for their content. Unfortunately for most artists, only the biggest names are considered for this sort of activity. Coke and Best Buy (among others) could probably give two s#### about Zoë Keating.
Respectfully Anon, if that were the case why would these smart people/labels be busy creating/supporting (for instance) Merlin – http://www.merlinnetwork.org/board? There must be some need that is being satisfied by participating in this collective, no?
If digital licensing terms were the same for big labels and small why would any service ever be licensed by one and not the others (which happens all the time)? If market share didn’t have a tangible value why would companies such as Universal give up important deal points within their distribution agreements but insist upon being able to claim the distributed label’s market share?
I apologize for sounding like a know it all. All I can offer other than that apology is the explanation that I’m being driven by a desire to get artists and indie labels to ask the right questions about how to get paid by these digital streaming companies.
Well to be frank all license deals between content owners and digital retailers are more or less the same.
There can be some slight ponderations based on market shares but nothing major.
The reason why small labels regroup themselves in entities like Merlin is simply to benefit (indirectly) from a deal with Spotify…etc.
A digital retailer will never deal directly with a small label.
Please also be aware that every single stream and download is reported, accounted and invoiced between content owners and digital retailers.
There are a lot of people working full time for making sure this is done correctly, and there is no ‘evil consipracy’ from major labels or retailers to screw the poor artists.
The reality is that more than 80% of repertoire, even from a major label, is not making ANY sale or stream.
That’s just not true JTVDigital. A Cautious Contrarian has it correct in that every label group/aggregator negotiates and therefore has it’s own deal terms. Because streaming rates are so low when divided by the number of streams it may seem like they’re very close but they are not. They are also NOT PAID OUT PER STREAM!!! You can do the math til you’re blue in the face but streaming services pay based on market share and not per rata. This is just a fact.
We should pay Ms. Keating $2,000 if she, as an experiment, would take her work off of Spotify for the next 12 month and then post her iTunes numbers again.
My guess is she would gain $3-4k from sales.
YouTube takedowns could be interesting as well, but I suppose it could be perceived as a hostile move because of the many 3rd party uploads. And people do find new artists on YouTube, which doesn’t seem to be the case with Spotify outside of Norway/Sweden.
Also, it could be good to know why she prefers to pay CD Baby? TuneCore seems to be the better deal in her case.
Yea…she would have saved about $7K from just paying them $50 for the year. If you sell more than about 800 records a year, there’s really no reason to use CDBaby.
Yes, I came to that conclusion too, which is why I pulled my content out of CDBaby in 2010 and got a direct account with iTunes 😉
CDBaby just handles my streaming, which is small but still more than I would pay with a flat-fee service.
I tried then to hand over my streaming to a new distributor but in 2010 no one was willing to work with me without a % of my iTunes revenue or let me pick the services I wanted to participate in. TuneCore was, but when I went through the process I was rejected because I’m in the classical category. They refused for years to deal with classical artists, even personal exchanges with Peter Wells and Jeff Price couldn’t make it happen. But I’ve been wary of that company anyway since their ouster. It was not trivial rebuilding my iTunes sales and review history from scratch in 2010 (you lose everything when you change distributors) and I want to make sure I choose the right company.
That is why no streaming services have my 2010 album, because I don’t have a distributor for it. People say I’m either a genius or a total fool for withholding from Spotify. It’s neither, just circumstance and inertia.
Now, I haven’t surveyed the distribution landscape for a couple years so I’m sure there is by now a flat fee distributor who will let me cherry pick services I want to work with and songs I want to include. I’m not in a hurry. I’ll sort that one out when I release my new album this year 😉
ps…It’s hard to remember but DIY’ers didn’t always have the access they have now. there was a time when Derek Siver’s CDBaby was the only way into iTunes.
Ah, gotcha. Cool, thanks for sharing!
“TuneCore was, but when I went through the process I was rejected because I’m in the classical category”
Ah yes, I think you told us that the last time you were around, I just forgot about it.
Thank you for your contribution and good luck with your next album!
…more indigo spam, sigh…
More anonymous cowards, sigh.
How much of those earnings goes back into promoting/marketing the records so she can sell those albums?
none. i don’t do PR unless you include live concerts, which are the best PR there is.
2014’s numbers for MediaNet should be interesting with the launch of Beats Music. I’m guessing there will be significantly more streams and an inverse change to the per stream rate.
Slightly unrelated, but I wanted to come to CD Baby’s defence regarding some of the above statements. You shouldn’t assume that CDBaby only provides digital distribution. In my experience, cd baby has helped artists and indie labels that garner a lot or even just some sales by providing some extremely unique exposure opportunities. They are a company run by hands-on humans to have shared their contacts at Apple, Amazon, and Spotify and have given us access that only big labels had access to in the past.
Just my two cents, didn’t want people to assume that they are just a place to upload your tunes and lose 9%. They are much more than that.
Out of curiosity, were other streaming services (Rdio, Deezer, Slacker, Xbox, etc.) excluded from the results because the numbers were too small to bother reporting or because your music wasn’t licensed to them?
Here are my figures, based on average per unit, regardless of territory and free/paying plans:
Sorry guys I forgot to mention these figures are in EUR, not in USD
I wonder when we’ll see the transparency of what revenue is actually made on streams? I know the model is flawed and highly doubt that artists are being treated fairly in this streaming world, but it’s difficult to compare a stream to a download. We know someone pays $0.99 for an iTunes download and Apple pays out about $0.70 total (both publishing and artist royalties…which people often forget to differentiate). But what does streaming pay out in comparison to what it makes? How much money should a stream make for musicians? Has the introduction of readily available free music via streaming reduced illegal downloading ($0.00 to artists from illegal downloading)?
It would be beneficial to get a fuller picture of how streaming revenue actually works. That would be the only way to truly understand how artists should be fairly compensated. If streaming revenues worked out to $0.01 per stream, then $0.00438 isn’t too bad, though it would still probably need to be raised.
So again, we see that Youtube is by far the worse among the streamers, paying less than even Pandora per-stream and with more volume than all other streaming services combined.
Youtube is cannibalizing everything, and every article about or debate over Spotify is just distracting from this reality.
Let’s have this debate when YouTube will officially include a music streaming service.
At the moment it is still a video streaming platform 🙂
What counts is market share / volume / reach, not per-stream pay-out.
Are people listening to music there or not? Is it available for free on every smart phone or not? Who cares that it isn’t an official music service–it’s what more people are using to listen to music than just about anything else.
Yes for sure most people use YouTube to listen to music, seems like you did not see the 🙂
My point was we should avoid comparing oranges to apples, the business model of an audio-only streaming service like Spotify is not the same as YouTube.
Spotify (or other streaming services) per-stream payouts are master-use royalties.
YouTube revenue is based on advertising revenue, depending on the number of clicks on the ads inserted to the videos.
Yeah go ahead and stream YouTube music on your phone… if you enjoy $100 data overages.
As Zoe Keating points out, most of the videos using her music are user-posted and not all of them are monetised. So they don’t give much of a guide to what an artist might get from an ‘official’ video.
Amazing coverage, Paul. Bringing us the insider stats that no one already knows about.
Funny, I don’t remember John Denver being so dry and conceited.
I understand from one of the artists who posts on FarePlay that CD Baby recently changed their agreements and they no longer allow artists to remove their work just from Spotify or another streaming service. Either you participate on all services or you don’t participate on any through them.
Can anyone confirm or deny this policy?
Zoë herself confirmed this to me. It has made her distribution strategy quite complicated.
I checked just now and this would appear to be the case.
Her comparisons are always Apples and Oranges because she withholds her latest releases from streaming services. Totally useless.
you’re right, it would be interesting to know which albums sell more, the ones on commercial streaming? hadn’t looked at that before (my spreadsheets are part of doing my taxes).
i did a tabulation of that for iTunes and bandcamp and added new sheets to the public document:
on iTunes, 59.63% of sales is of music that is not available for commercial streaming
on Bandcamp, 67.04% of sales is of music that is not available for commercial streaming
the average for both is 60.52%
all music is always available for streaming in bandcamp or soundcloud, just not on spotify, beats, or anywhere that requires a middleman to get in
BUT….all this might just prove that my older material isn’t as good as my new material 😉
Thanks for sharing data Zoë.
What about releases that are both on streaming and download services?
I personally do not believe in cannibalization, at least not on a global level.
Some people like to own the music, some do not give a f*!&^
This is a generation / consumer behaviour question.
Seems roughly consistent with streaming currently being ~18% of revenue in the US and ~10% in the UK, especially considering, as the previous poster less kindly mentioned, that this artist keeps her newest album download only.
The other thing that jumps out is the extent to which Youtube dwarfs other streaming services in volume at the moment. From searching it seems like some of her highest volume videos are legitimately posted performances. I expect that in the future, streaming revenue may need to be negotiated before artists perform for a channel. Of course, the channel may hold all the cards, depending on the artist’s profile.
There are also quite a few probably illegal videos floating in the 40k-60k view range. At a guess, these might be worth $100-$200 each. I keep thinking there’s a market space for someone to set up a service that identifies all the illegal videos in the long tail and takes care of filing dozens of claims in exchange for a small cut of the ad revenue. Of course, the artist would have to agree to keep the illegal videos up, then.
That service exists: Youtube CMS
For a 3rd party video, music copyright holders get 35% of the total 55% net revenue share (the other 45% going to Google). The other 65% goes to the entity who uploaded the video, even if that video consists of a song with a single image.
Thanks for the information. It’s interesting and surprising to me to learn what a low percentage music copyright holders get if they choose to monetize third-party content. Up until now, I was mostly following Nintendo’s ongoing saga with Let’s Play videos, where they were supposedly taking up to 100%, but then they can claim both video and audio. Well, hopefully Youtube’s streaming service will crowd out many of the illegal third-party views. Really, it would be a good show of faith if they would take down those videos but leave the links up and redirect to fully paid streams. (Not likely. Sigh.)
Hopefully emerging content networks like Merlin, mentioned upthread, can negotiate higher CPM rates for indie artists.
Oh look Pandora pays the most and its not even a on demand streaming service. Yet it gets the most hate. Wtf?
This is informative but a little to complicated so let me tell my problem.
I am so indie it hurts (no budget) and trying to see what will be the best strategy with my new cd. Good news is the music sounds amazing (finally)!! But I was approached by a division of Sony Red (basically one of the lables the have signed) to distribute my project. This company will get 30% I get the rest. Here is the problem, I don’t trust them and I dont understand if this is a good offer. Everything has gone digital and I don’t trust that my work will be on all of these outlets you speak of. But hypothetically ( if they are) are you guys saying the best outlets are the following (correct me if i’m wrong); Spotify, Youtube, ITunes, CDBaby?? Do I have to have a distriubutor to use these services? If I don’t use a distributor, can I setup my work on these services myself?