at the Vanity Fair New Establishment Summit in San Francisco on Wednesday, audience Q&A portion.
Jimmy Buffet to Daniel Ek, Spotify CEO: “Do you see anything in your future where we might get a raise directly from you as opposed to the bullshit you have to go through to deal with a label these days? Musicians only get a trickle after [Spotify payments] have gone through the major label executives.
“How the stream of revenue gets to the artist, particularly the younger struggling artist… it’s really hard to make it in real life if you’re a young artist. So I’m hoping that all the music services would look at that.”
[audience smattering of laughter, applause]
“Because it’s one thing when it goes to the record label, but most of it doesn’t get to the artist.”
Daniel Ek: “Obviously I agree. At first there were a lot of artists that didn’t understand streaming, was it good, was it bad for them. And Spotify, quite quickly started becoming the biggest music service, and right now we’re about 70 percent of all revenues in Sweden, including physical as well. So this is a massive part of the music industry which has actually gone up in revenues.
“But the biggest thing that happened in that process is transparency. So we started showing, actually the number of streams the artist had. And as a consequence they started asking the labels, ‘okay, what does that mean, how much will actually go out?’ And already today, we have an artist website where we say roughly how much 1,000 streams or a million streams actually mean in terms of dollars back to artists.
“And because we started publishing that, that started creating the dialogue between the artist and the industry. And as a side consequence because streaming became such a massive part of the revenues, labels even changed how they started paying out the artists. So instead of once a year, they started paying out much more frequent.
“And right now, we’re actually paying out more than a billion [dollars] in rights payments this year, and more than 70 percent of our revenues go to rights owners.”
Buffett: “But that’s actually still lower than what we used to get.”
Ek: “Of course.”
Buffett: “Which is why I was hoping for a raise.”
Irving Azoff (moderator): “If you’re looking for money, you’re better off selling one of your planes.”