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Comment by ilamont | Hacker News Reader

“We all know that one of the greatest challenges is access to capital. And that is why I’m sharing today that I will devote €1bn of my personal resources to enable the ecosystem of builders”

He's made his billions on the backs of builders, the musicians who can record music all day long but will be lucky to receive pennies for a million listens. The 98.6% of artists outside of Spotify's top tier are making an average of $12 per month (https://www.rollingstone.com/pro/features/spotify-million-ar...).

Why can't Ek share his largesse with the builders who make it possible for his service to exist?

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Historically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness.

I see spotify more like as an audio-based customer acquisition channel, like the radio.

Maybe it could build in some kind of "donate" patreon-like feature into the app. I wish Soundcloud had this.

Historically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness.

In the early 1990s I worked for Jimmy Cauty and Bill Drummond's record label, back when they were dominating the UK and European pop charts as The KLF (https://www.npr.org/sections/therecord/2017/07/20/537708922/...).

They never made a pound touring. Their success and much of their impact was tied to European club playlists, the sales of singles, album sales, and the media.

You can talk to many other artists from that era who did depend on touring and merch, but also used distribution and sales of singles and albums (and advances on record deals) to establish themselves.

While plastic media was doomed long before Spotify, this "audio-based customer acquisition channel" is, by design, set up to benefit Spotify, record labels, and top artists, in that order.

Everyone else in the 98.6% tier gets the scraps.

> Everyone else in the 98.6% tier gets the scraps.

yeah because they're getting 1.4% of the listens.

Ask yourself why they are getting fewer listens than the 1.4% who get the most listens.

It's not because Spotify is a meritocracy for music.

Have societies justly and fairly treated individuals in the past? If not then there’s little reason to point to it when talking about a person in power “doing the right thing”.

While artists made much more of their money on tour or selling merch, it didn’t take all that many sales of physical releases for an artist to top $12/month. Yes, the distributor and label took their share, and the royalty paid to the musicians was a minority of the sale price, but they could still make more money than they do now on streaming platforms.

> Historically, artists never made much money selling music.

Yup, so why start now, right? That would go against tradition.

what do you propose?

> That would go against tradition.

a tradition of it being unprofitable, perhaps. It just goes against the numbers. Small artists just don't get enough listens.

Everybody complains, but you aren't entitled to success. Once you're popular, there's plenty of ways to monetize.

The only solution is basic income, because you probably aren't gonna live off your music otherwise.

SoundCloud does have a donate button. At least in the sense that an artist can setup a paypal button that shows up on their profile.

I have created something similar with SoundRat (https://soundrat.com) that connects more with the patreon-like features and makes listening of music free but gives fans an option to donate to artists and get some perks for doing so.

I meant like a patreon model, where I can donate $5 recurring and it bundles with my soundcloud monthly payment.

Pre-radio, the music industry was much healthier, because ‘winner take all’ did not exist.

Each location could have their share of top talent to perform for the region.

> Instead of finding a singular solution to a problem we need to think about a system-wide solution, healthcare is a great example of this. There are many structural problems in healthcare and just like we did with Spotify, you need to go, piece by piece and create something that actually is a win-win for all stakeholders.

Ah, Spotify, famously a win-win for all its stakeholders, including the musicians who can no longer make a living by recording music.

It seems so misguided to ask Ek to share; if he distributed his 3 billion it would not materially change the lives of the millions of artists on the platform.

The guys who always get paid are the majors, and the majors are the one who ensure the top artists (who are signed to thos labels) are always given the majority of the share.

Because in terms of potential benefit to society, this is orders of magnitude more efficient than giving artists a few more bucks.

I don't even agree that they deserve it. The aggregate musical output is valuable, sure, but individually it's commoditized and worthless for all but the top musicians.

Most of the cash goes to the labels, not spotify. Universal music alone has an implied valuation of $30bn

> He's made his billions on the backs of builders, the musicians who can record music all day long but will be lucky to receive pennies for a million listens.

Ah, you surely mean recording companies and copyright holders that take up to 70% of Spotify's revenue and pay out pennies to artists. Why don't you ask those companies where all the money is going?

> Why can't he share his largesse with the builders who make it possible for his service to exist?

Well, he is sharing it. At IPO Spotify disclosed that had paid "$9.7 billion in royalties to artists, music labels and publishers since it launched in 2006." [1] The thing is, Spotify doesn't have direct contracts with artists (and can't afford to for fear that the Big Four[2] will pull their content). So the question is: where did those billions go?

Let's read the article you're commenting on (emphasis mine):

--- start quote ---

Spotify pays the major record companies a 52% share of all net receipts attributable to streams of their artists. This was a figure the parties agreed to during negotiations in 2017, and it’s believed to have remained unchanged since.

According to Spotify’s Q2 results, the firm generated €1.89 billion ($2.05 billion) in the three months to end of June. We can therefore broadly assume that 52% of this money, or $1.07 billion, is being paid in recorded music royalties to labels and distributors, who will carry a portion of that over to their artists.

--- end quote ---

The article then continues being disingenuous pretending that 100% of the money that Spotify pays out goes to artists and that Spotify is solely responsible for that money.

So what is that "portion that labels and distributors carry over to their artists"?

Oh, look, only 12% of music revenue goes to artists [3] But obviously, it's the sole responsibility of Spotify (and Amazon, and Apple), and not of the Big Four that hold the music world hostage.

[1] https://www.cnbc.com/2018/02/28/how-spotify-licenses-and-pay...

[2] https://en.wikipedia.org/wiki/Music_industry#Consolidation

[3] https://www.techdirt.com/articles/20180819/00051140461/only-...

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