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Comment by djaychela | Hacker News Reader

Was going to say much the same here. I release trance music with a friend of mine (nothing serious, just a couple of friends who spend an evening a week working on music together), and have done for years. Pre-spotify, we used to make some money from sales of tracks - not a lot, but enough to have a few nights out here and there. Now we make literally nothing, due to the way that royalties are paid - we see tiny (£0.0001-scale) royalty payments for the hundreds of listens that the tracks get, where we used to sell a few tracks a week.

Most spotify listeners assume that their monthly payment goes to the artists they listen to, but that couldn't be further from the truth.

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For a long time the industry relied on an external cultural of independent producers and distributors - all genres, not necessarily "indie" music - to keep the system running.

The indies generated, promoted, and distributed the next generation of music. The majors would then either sign the bigger artists or buy out the bigger indie labels. Both would get rolled into the big machine and the cycle would start again.

Spotify has killed that. Never mind earning money - indie artists can't get significant exposure. Not from unit sales, not from touring, not from streaming, not from anything.

Sooner or later someone is going to realise that an indie-Spotify has to be a thing, because there's always going to be a significant market for people who want to discover non-mainstream music and music is going to stagnate and choke on its own products if the main distribution system is a monopoly.

I don’t understand this take. Can’t indie artists get their music ok Spotify? How is the situation worse for them?

Big labels negotiated good deals for their own artists so royalties from streaming benefit them, not the indie artists.

Although, music industry is even worse. A pyramid scheme where old, still living artists negotiated big deals and the label gives peanuts to new.

> Most spotify listeners assume that their monthly payment goes to the artists they listen to, but that couldn't be further from the truth

Yeah I assumed the pay a flat rate per listen to the artist.

> Spotify pays about $0.006 to $0.0084 per stream to the holder of music rights.

Which is pretty flat, and you should have got at least a dollar surely. Is this not the case?

> For example, Spotify says that its average payout for a stream to labels and publishers is between $0.006 and $0.0084 but Information Is Beautiful suggests that the average payment to an artist from the label portion of that is $0.001128 – this being what a signed artist receives after the label's share

https://www.theguardian.com/technology/2015/apr/03/how-much-...

This seems to clear it up

> We aggregate all of this revenue from these two streams, and distribute back 70% in royalties based on a pro rata share in accordance with the popularity of a piece of music. For example, if one of your songs has been streamed 1% of the total number of streams in a month, you will get 1% of the 70% of royalties we pay out to rights holders.

http://www.musicthinktank.com/mtt-open/how-does-spotify-pay-...

If the latter is true, let’s assume everyone pays $15 a month for Spotify and there’s 1 million subscribers each listening to 1000 songs a month

900k listen to Ed Sheeran exclusively 1000 times

100k listen 1 times to each of 100 indie bands.

Total revenue $15m Total royalties $10m

Ed Sheehan gets 900m listens

Each indie band gets 100k listens - total 10m listens

Ed Sheehan gets $9.9m Each indie band gets $1k

You’d think that the $15 the Indy subscriber would pay would go equally to the 100 bands - giving 15k per band, and 9.4m for Ed, but it apparently doesn’t work that way.

Those who binge listen are subsidised by those who listen rarely.

That’s my understanding anyway, but it seems to be based on a line from an “artist in residence”

It's obvious when you think about it. Artists get paid per stream but users only pay per month. When someone listens to more streams than they have paid for, the money has to be taken from someone who has listened to less streams than they paid for.

I guess the confusion comes when 10 fans only listen to Band X, but band X gets less that $100 a month.

I listen to say 1,000 songs a month on Spotify, at $10 a month royalties that’s 1c per song. If I listen to song K 10 times I would think they’d get 10c from me, but they don’t neccersarilly - it might be 1c, it might be $1.

There’s a sad effect - if I listen to 2 hours of Band A and 3 hours of Band B, but Band A has an average track length of 2m and Band B has a length of 4m, Band A would get more than Band B!

A fair algorithm would look like this. A user pays $10 per month. They listen to music for 1hr per day. That is 1,800 seconds. The bands they listened to should be paid 0.55c per second.

You need a per user second rate (Calculated monthly), applied to the streams they actually listened to on a per second basis. Yes, it is a large calculation, but simple compared to most ML problems.

3600 seconds a day, or 108,000 seconds a month, but the point stands.

That would be 1 cent per 108 seconds, so listen to an 8m35 version of American Pie and Don McLean gets 4.75c. Listen to Heartbreak Hotel, 2m08, and Elvis gets 1.18c. Listen to a 1 hour podcast of "The Infinite Monkey Cage", and the BBC get 33.3 cents

If you listen 24/7, or 2,592,000 seconds a month, then your $10 means that Elvis gets a mere 0.05c

Oh yeah, hehe - that should have been obvious to me. 108000 seconds a month.

You calculation are bang on. Elvis getting a mere 0.05c seems fair in the case of this super user when the user needs a flat rate to consume and all the content providers need to be fairly compensated. If this doesn't seem fair then your issue is with the flat pricing per user per month. Which, without this, I'd bet the pie is much smaller.

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