Maybe radio does haven't that many listeners? But by my math, if your radio play goes out more than 265 people, you are getting less per listen than on Spotify.
The real loss is the $15 10 track CD, which someone would have to listen to 471 times to reach Spotify pricing.
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.
It's a shame, because realistically the last 20 years should have been a golden age for small music production. You can now produce professional quality music with nothing more than a PC. I remember going with my dad's band to a recording studio and them recording onto an 8 track tape.
You can take your recordings and publish them on the same platforms that the professionals do, all from the comfort of your own bedroom.
Funny enough, I remember by dad's friend produced an album and, in the early days of CD recordings, convinced the manager of HMV to let him sell it directly from the counter in the store. My dad burned every one of them on our 2x CD burner. Man that cut into my flightsim time.
If I wanted to listen to some of the music you where involved in what would I search for?
The better argument you make is that Spotify shouldn't be compared to radio, because it is "on demand". It is more like a CD purchase. There is some truth to this, and it should probably fall in the middle pricewise (and it does) it's just a matter of which direction it should move. It shouldn't cost as much as CD, because you have to keep paying every month for access and have no resale option. You don't own it, you're just renting for 4 minutes. I did a lot of CD trading- spent way too much time and money in used CD stores which paid the artists nothing, but meant you could a least capture some residual value from a CD you purchased.
Having streaming access has really changed my music listening patterns. I hardly ever listen to an album on repeat. There's so much more to listen to, but I listen to each thing less. Patterns of consumption may have changed for others as well.
I don't know how to best try to get more money. You still have some artists selling directly, not putting all material on Spotify, only putting it on the higher paying places, putting it on well after release, treating it as a sample shop.
You say that you “know” that terrestrial broadcast isn’t based on the number of listeners, and then go and make the same argument that Spotify pays better than radio based on “radio plays with n listeners.”
> You are acting like a terrestrial broadcast to n listeners is equivalent to a Spotify non-broadcast to one listener.
Yes, I am, exactly! Please tell me you understand the difference between 10,000 people individually seeking out a song on Spotify vs a radio broadcasting a song one time to n people (and sure, n can equal 10,000).
I like how you say “$0.12 per stream is not a viable model for music” while somehow pushing that $0.00318 per stream is. You’re right, though —- $0.12 per stream isn’t a viable model for music without the album sales those streams used to lead to. Spotify, if it’s to replace both radio and CD sales, needs to pay at least comparably to both. I’d say $1 per stream with a small bonus on top if someone listens to an album from start to finish all the way through would be a decent model.
Your last paragraph betrays your ignorance of the subject. The situation in which an artist voluntarily choose to not put their music on Spotify is so rare I’m not sure it’s even statistically significant. A more common reason is due to the publisher refusing for some sort of money reason, but those situations are eroding all the time. Spotify is the de facto king.
And it’s not like “some artists sell directly.” Everyone does! They do so because they have to recoup the utterly disastrous rates paid by Spotify somehow. So yes, by all means pay for music directly. But it’s not a better product than Spotify, because both allow the listener the same experiencing of “owning the album” (due to the benefit of “on-demand access”), so direct music purchases are just a “nice to have,” nothing a musician can actually depend upon. In other words: who cares about the edge cases when the majority use case is so shit and is actively pushing edge cases even closer and closer to the edge. Direct music sales are not a remedy to Spotify’s abhorrent per-stream rate and overall effect on the music selling landscape. Only one thing is: negotiating better per-stream rates. Period.
What I am saying is that even though the $0.12 isn't based on the number of listeners, there is a number of listeners (n). So that $0.12 should be divided by that n in order to calculate how much money is paid per listen. If that n > 265, then Spotify is paying more per listen. I agree that the on-demand nature means Spotify should cost more than radio. Still, the argument that Spotify does pay less than radio per listen is wrong, and it makes your case a lot weaker if insist on that, because it's contrary.
When I said $0.12 a stream isn't a viable model for music, I didn't mean because it paid the artists too little, I meant it cost too much! Paying the artist and songwriter $0.12 per stream means charging the user about $0.15 each time they listen to the song. (Which doesn't seem right when compared to the purchase price of a song, unless people listen to music they purchase fewer than 8 times on average.) If they stream 25 hours per month, at average song length of 4 minutes, that's about 375 songs per month, or about $56/month. For heavy listeners, it would be a lot more. I don't think many people would sign up at that level. It definitely couldn't be covered by advertising. That said, you could probably get a lot more than Spotify is paying. Still, it does indicate some room there to get more than the $0.00318.
It is surprising to me that we don't see more exclusivity with music like we do with video content, where subscriptions to various services end up being necessary if you want to watch a particular show. The consumption patterns are quite different. However, given the number of competing platforms out there and the low switching costs associated associated, probably the best strategy is for a whole company with a lot of publishing rights to pull their content from the lowest paying services. Something like what Disney did to Netflix.
No wonder some musicians complain loudly about Spotify's rate.
You might have misphrased, but in the event you didn't: How does listening to a CD generate revenue?