Carving out a niche as a small artist on Spotify

I’m a professional musician and categorically reject the “but at least it is possible to be heard at all” angle. No. That is bullshit. Spotify is replacing BOTH album sales and radio play, and yet it pays multiple orders of magnitude worse than either.

You might have misphrased, but in the event you didn't: How does listening to a CD generate revenue?

Embedded in what you’re saying is the expectation that radio plays/streams/etc are primarily for “exposure.” It’s a tired argument and not one any professional musician cares about past a certain point, especially considering that, yes, radio plays ideally drive album sales. But in the world of Spotify, streaming replaces both. What matters is that a [radio station | streaming company] is licensing my music so that they can have something to attract people to in order to expose them to ads. Without the music, the model doesn’t work. Sure, some people pay to not have ads — I don’t care. That should only raise, or at best have a neutral effect on, my per-stream rate.

You’re right that the real loss is the CD purchase. Radio plays used to not only pay me and THEN lead to that further CD income, but now Spotify has replaced both and pays far worse than either.

“But Spotify pays $31.80 for 10,000 streams while radio only pays $0.12 for the same exposure!” I hear you saying. Wrong. Spotify pays $0.00318 per stream while radio pays $0.12 per “stream” (broadcast), and that’s the only number that matters (due to the aforementioned way in which radio works). So, not even counting the much larger cost of CD sales, Spotify has reduced my income by nearly 38x. This is all fuzzy math, but that checks out with my anecdotal experience and talking with older folks who were selling gold or platinum records pre-Napster.

Streaming is NOT okay where it is right now. As a music listener I can’t argue that it’s not a better product, but as a music creator having my income slashed by at least 38x isn’t worth it.

To give you an idea of a still-decent avenue for income making music and how far it’s fallen, I’m primarily a composer for film/TV, and broadcast royalties for a single broadcast of a single minute of underscore can pay between $0.99 to a few dollars for broadcast, cable, terrestrial TV. On the other hand, an entire yearly quarter’s worth of earnings for that same minute of music on a streaming service (untold thousands of streams) rarely pay a single dollar — usually more in the single-digit cent range. Do the math — it’s worse than 38x. On a recent royalty statement I calculated that streaming services paid 70x worse than cable. And to top it off, some streaming services are outright refusing to pay legally mandated writers’ royalties (the portion I’m supposed to retain and get paid for, no matter what, by law). It’s moved to cable, too — Discovery tried to pull a stunt last year where they just decided “no more royalties.” They walked it back, thankfully, but we all took it as a warning shot.

Imagine your coding salary getting slashed from $100k to $2k, and imagine never having benefits in the first place, and having had all the costs associated with doing the job shifted from the company to you over the last twenty years, and you’ll get an idea of what it’s like to be a working musician or composer nowadays.

breath

To further clarify my point about streaming:

Radio and albums were how people consumed music in the old days — the deal was that if you want something on-demand, you gotta shell out and buy the thing. Otherwise, endure ad breaks while waiting for the song you want to come on, listen to it once until who knows when, and hopefully you like all the other music along the way. Right?

Now, we can listen to any music we want at any time, on demand. Album ownership is pretty much moot. And that’s great! Again, as a music listener, I love it. But this means that we’re getting the benefits of album ownership in the format of radio. What do people demand more — the benefits, or the format? Obviously there’s a bit of intertwining between the two, but I’m sure most people would say “I care more about being able to listen to what I want when I want” than “I care about being able to stream music” (even though obviously the latter enables the former). This is why piracy was so great for music listeners — it enabled the former. Now, for a small fee, we get the convenience of radio and the benefits of not only album sales, but also piracy, which we now have to compete with. They’re basically the same thing, though: you “own” the album and can thus listen to it whenever you want.

At the end of the day, though, we’re paying for the more important of the two (album ownership) with the payment model of the lesser-valued (radio). Radio licenses worked for stations because they were (and continue to be) distributed amongst a large number of artists and labels, and could be negotiated down via the leverage that radio was ultimately driving album sales.

Now, those ad payments are distributed amongst literally hundreds of thousands of more artists, and instead of a radio station going cheaper with the argument “but this will lead to more album sales via exposure,” Spotify can just use its leverage of “well, fuck you, what else are you gonna do?” It’s a mob mentality. They’re essentially the only game in town and they know it. Furthermore, not all streams are equal — just as radio stations would license in order to play a popular song more often (getting more ears glued to the ads in between), Spotify doesn’t pay Beyoncé and Joe Amateur the same per-stream rate. The lions get the lion’s share and the rest get the scraps divided up between them — but “the rest” is the overwhelming majority of the artists present on Spotify. The curve is exponential.

Consumers are getting a categorically better product in every conceivable way and yet the payment to the actual creators of the product, the reason they’re actually there — to listen to the music - has gone down by such a degree that it’s laughable. It’s an unbelievable amount. It’s disastrous on a scale that is difficult to comprehend unless you live it.

Music is rapidly becoming a field that only the already-extremely-rich can do professionally.

No wonder some musicians complain loudly about Spotify's rate.

Interesting stuff!

If selling CDs through a store could earn you (using simple but realistic numbers here) $100k per year, and Spotify streams to the same audience size earn $1k per year, it’s not unreasonable to expect that Spotify should add a hell of a lot more value on its end, perhaps in the form of driving listeners to artists — especially if Spotify possesses the means to.

One day, we can hope.

Labels are dead. Studios are dead. The onus to procure the gear and space to make music is entirely on the artist now. Yes, costs for some gear have come down, but to do truly professional work you need to invest at least a couple thousand in a computer and software (DAW, plugins, etc), another thousand minimum in speaker monitors, another thousand minimum in acoustic treatment, plus let’s call it another thousand or two for various misc stuff (display, keyboard, mouse, a few instruments, a decent mic and audio interface, midi controller(s), cables, etc etc etc). I’d say dead bare minimum you need $6k, and that’s ignoring the fact that so much music software are going to subscription models. You can easily add another zero to that.

Plus you need the space where you can actually make a decent amount of noise, the time (and money) to learn to produce, mix, and master your own music — all lifelong and singular skills in their own rights with their own masters, totally apart from actually writing and performing anything.

Add on distribution fees (which aren’t quite as low as you think in order to get to any sort of “professional” echelon), business and legal fees, etc etc etc, and things get expensive fast.

The important distinction here between coding and music is that the cost has entirely moved from a label/management firm to the artist themselves. No one really makes music in a studio with a console anymore. Yes, it happens (I’m a film composer writing orchestral music, so I’m still doing it — yes, we typically pay for the orchestral recording sessions, whereas in the past film studios took on that cost, and that alone can cost well over $100k), but all in all music is made on a computer. Just because that’s the same tool you use to code, don’t think it’s at all the same to you buying your laptop compared to the days when IBM built its own mainframe (and of course businesses still routinely give out laptops to their employees). Coding can be done even on a shit $300 Acer with free VS Code, but you’ll have a hard time making any professional music on that same computer with free software.

There’s a lot more wrong with your assumptions (such as amateur and pro musicians making the same income) but I’ve typed enough for the moment.