That infographic is just wrong, I wish people could stop linking to it all the time.
The data it is based on is some small numbers from the first months after Spotify launched, before the revenue strems had actually started. No hard numbers are released, but it is generally acknowledged in Sweden that Spotify is now the largest online income for artists.
If that's not enough money for an artist, then the problem is really that the artist isn't popular enough when people get to decide for themselves what to listen to.
Exactly. According to this article[1] (in Swedish) about Lady Gaga making $340 from a million Spotify listens to a single song, the same number of listeners on the radio would have made her $15.
I clicked on that to bookmark and translate later, and holy-crap-my-eyes-are-bleeding. And I thought some sites in the US were bad with ads.
Click at your own risk.
Sorry about that, Expressen is one of Sweden's two main tabloids. Here's a rough translation:
Lady Gaga had the most popular song on Spotify, with one million listens. Now she gets her money from STIM [Sweden's collecting agency for artists etc]: 1,150 SEK ($170 USD).
Lady Gaga's "Poker face" was the most popular song on Spotify during the music service's first five months, according to the first payment of STIM money made on behalf of Spotify, according to STIM's own paper "Stim-nytt". The song was played one million times - which yields 2,300 SEK ($340 USD) that Lady Gaga and songwriter partner Redone share.
Dogge [Swedish artist] upset
Rapper and songwriter Dogge Doggelito is upset when he hears the sum. - It's sick. We musicians have no rights, you don't get paid any more. Lady Gaga would have made more money driving an unlicensed cab one night at [known place in Stockholm].
"Better than file sharing"
Artist and songwriter Alexander Bard [another Swedish artist] doesn't want to comment on the sum without knowning how Lady Gaga's contract with her label looks, but says: - 2,300 is more than zero which she would have gotten from Pirate Bay. It's better than file sharing, says Alexander Bard.
The future
Both Alexander Bard and Dogge Doggelito believe that Spotify and similar services are the future.
- These are teething troubles. I hope that we creators one day in the future will be paid reasonably and fairly, says Dogge Doggelito. "Stim-nytt" compares the sum to if "Poker face" had been played in the radio show "Sommar" that averages a million listeners. Then the STIM payment would have been only 100 SEK ($15 USD).
Sorry, why is radio a relevant comparison? When I listen to the radio, I listen to songs that are selected by the radio station. I don't get to play any song I want as often as I want. The correct comparison is not with radio but with an mp3 download. Radio didn't stop people needing to buy an album/single if they wanted to listen to a song. Spotify does.
(I also note that the amount referred to in this article is the amount given to songwriters. Not all musicians are songwriters.)
It's relevant since with both radio and streamed services the artist (or mostly the artist's label...) gets paid every time the song is listened to. With an MP3 you only count the number of downloads, not the number of times it's played.
This means that with downloads you get a rather crude measure of a song's popularity - you count the number of listeners instead of how often the song is actually played. It also means that a popular song will never stop being a source of income with a streaming service, as opposed to downloads where every user pays for the song only once.
About the privilege of selecting songs, according to the numbers in the article you pay 23 times (or maybe 12 times, it's a bit unclear) as much for being able to do so than you do if someone else selects the song for you.
Also, unless I'm mistaken it's the recoding's copyright owner - the label in most cases - that gets paid, and they in turn pay the artist. According to that other infographic, the artist gets about 15% of the amount the label gets.
So I got downvoted based on a comment that alleged the data in the graphic was wrong but provided no data to demonstrate that? The link later on the thread that does include some data shows that the songwriter (not artist) earns $0.00017 per listen.
Can someone explain how this makes the data in the infographic grossly wrong?
The data linked later on in the thread is the exact data used for the infographic, and it was just tabloid make-belive news. The reason why the numbers are wrong is that Spotify had recently launched at this point, and had essentially no real revenue stream yet (almost everybody on the free model, not a lot of ads yet).
It has been reported later on that the amount of money paid out has increased substantially, but no hard data is given since that seems to be considered a trade secret.
That data is also skewed. Notice they say "album - $10, song on amazon - $.99" thats wrong. An album may actually be say 10 songs. So 10 songs at $9.99 == 10 songs on amazon at $0.99 -- OPSE miscalculation there.
Furthermore there is the complication of "likelihood of sale". If I self-promote a CD, I may not sell my needed quota of 143 albums per month. In fact for an unknown the best chance to earn cash is playing at a bar. Streaming provides a longer-term ROI AND simultaneously possibility of having "pirates" actually buy your work, which equals profit.
Furthermore new free model for spotify = less chance that an artist will get many plays as you can't listen to that song over and over.
Yes, let's blame the people that are trying to solve illegal file-sharing issues. Spotify is competing with free and they offer such a great service that people are willing to pay 10 euros a month for a subscription. Most of my friends use more money on music streaming services now than they ever did back when they where buying cd's, and these are people who have been "pirates" for the last 10 years or so.
I hope programmers are so sanguine when their work is "correctly" priced into oblivion. I do think that subscription services are the wave of the future but I don't see how you can argue that Spotify helps artists.
> I hope programmers are so sanguine when their work is "correctly" priced into oblivion.
On the whole, I think they are. I haven't heard anyone here (or anywhere else) complain that hardly anyone bought their iPhone app that they put a lot of effort into.
I hear programmers constantly lamenting outsourcing, undercutting by cheap contractors on Elance, cheap & shoddy work done by consulting companies etc. Your iPhone analogy is poor because what Spotify is doing is displacing an existing, profitable product with an unprofitable (for the artist) product. Maybe it's inevitable but it's churlish to so smugly call it "correct".
I remain skeptical that programmers will be so happy to see their livelihood "disrupted" when and if it happens to the extent it's happened to artists.
Not-much-$ is still better than none-$-at-all. It's not exactly the choice of Spotify vs. buy a CD in shop, it's a choice between Spotify and BitTorrent.
That does not make it the correct price. The correct price pays back the production cost (including paying for the time and creativity of the artist in making up the song) and adds some profit. Get that from volume or high price but low price is not correct price.
Correct pricing, in an economic sense, is that which an undistorted market will bear, using whatever definition of "undistorted" you like. It's that simple.
> using whatever definition of "undistorted" you like
My definition includes the absence of violence, threats of violence, or dishonesty.
If the only reason people aren't using BitTorrent downloads is threats of violence (which is what threats of internet disconnection are, albeit at several levels removed), then it isn't a free/undistorted market.
> The correct price pays back the production cost (including paying for the time and creativity of the artist in making up the song) and adds some profit.
So if I wrote a program, say an iPhone app, using lots of time and creativity, but no-one wanted to buy it, do you think I should get paid for it anyway? If so, where would the money come from?
Unless you want to see the product disappear from the market, the "correct" price must also compensate the production costs and provide for a little profit for the author. Thanks to digital piracy the price many customers are willing to pay falls far short of that mark. If stealing physical goods was as easy as stealing digital goods you'd see the "correct" price of a car far fall below what it costs to make it too.
Except I have a plethora of buying cars and plenty of dealers willing to take my money. In the digital space a considerable amount of piracy is due to no legally available outlet for purchase of digital goods in a manner commiserate with what users want. Look at the success of iTunes and spotify as filling consumer needs. Besides if the price consumers are willing to pay for your product does not cover its production costs then you have no market (i.e. product)
And we want to prevent that. Just because it benefits ONE guy or one small group, does not mean its a good idea. It just means that one guy will suffer and have to actually work for a living while the rest of us have a chance.
In my experience, the software industry is a bit more open to the idea that business models will need to adapt to the realities of the internet age. And yes, many of us are quite sanguine about it.
Since Sweden adopted anti P2P laws (IPRED) in 2009 Spotify usage has grown. In 2009 France adopted an anti P2P law (HADOPI). Since then music sales in France declined at a lesser rate than global sales and therefore artist earnings declining less than on global level (http://www.fortherechord.com/hadopi-and-cartes-musique-franc...). This would point to a correlation between "piracy" and music sales.
Right now I have a hobbled together iPhone meet car stereo set up.
I was just thinking I want Spotify in my car and the ability to talk to my car to play any track (Ford already has cars you speak to start listening to iPod music).
When Spotify or another has created this feature/service then it's worth the $10 per month. Until then I'm using my hobbled system to listen to tracks on YouTube and Vevo for free (Pandora too which lately has tons and tons more commercials then it did in 2009 and 2010).
How much of that is due to Spotify, and how much can be attributed to IPRED[1]? (Either by people actually not downloading stuff or people not being counted due to services like Ipredator[2])
In Canada, spottify is illegal. So I had to "hack the system" to get an "illegal" software in order to get music legally. (Had to register and download the app from a us proxy and asked a friend living in us to pay with his credit card.)
Spotify is 100% licensed. AFAIK, Grooveshark is more like Napster in that it's a free-for-all with user uploaded content, though they have worked out deals with some of the record companies.
As far as I know, barely anyone use Grooveshark in Sweden while practically all my (University) friends use Spotify. Doesn't Grooveshark have some quite dodgy habits when it comes to paying the artists/using legit music files? Or was that some other music streaming service?
If nothing else Spotify has received a lot of good press in Sweden simply because it is Swedish. Patriotism :) And this was a Swedish study after all.
"Pirating" music and DL'ing an app that you can listen to copywritten music is the same thing. Major differentiating factor is that on spotify, you now have the option to be a paid member. Love spotify nonetheless, but is just pushing %'s around to make the article sound like "Its working"
Yes, that is correct. I could however just look at it as paying $10/month for a service that I know will only be around for the short term, or around in the short term in a format that I like to consume but will change dramatically and without notice in the near future due to the magical* whims of some product lead over at the Parent Company (Fb).
* I'd like to know what sort of of process a product person goes through whence writing stories or making suggestions for a product. Do they eval their own ignorance, stupidity, pettiness and laziness, choose two for average and proceed to operate forward using only those two qualities backed up by a mid-ranked college's beer-stained diploma?
