80% of musicians earn less than £200 a year from streaming | Hacker News Reader

80% of musicians earn less than £200 a year from streaming

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164 pointselorant242 comments

The fundamental problem isn't streaming, as much as it is that natural systems follow power law distributions. There will always be superstars that make the majority of the money, and tons and tons of wannabe artists that make almost nothing. That was just as true 20 years ago as it is today. If anything, streaming makes it possible to find those smaller artists and sample what they're making without having to go to some esoteric store and pay $20 for an album that you've never heard before.

The system may be broken, but I'm not sure going back to the old system is the right approach.

Isn't that just a truism of the Pareto principle? Is there any field where that's not the case? 20% of lawyers make 80% of the money. 20% of doctors make 80% of the money. etc etc.

The difference I think is if 80% of professional musicians can't make a living & it's not clear that's actually the case (i.e. streaming isn't the only source of revenue). Similarly, music may have a higher "stickiness" for tenacity where people see it as a higher calling for them even if they're not making money (vs someone not cutting it as a lawyer/doctor to even pay the bills is going to quit & find something else if they weren't even weeded out during school).

I don't think it's true for doctors, the wealth there is more distributed.

Some professions are lottery professions. Others aren't. I suppose a lot of it is a demand/supply thing. Also independent contractor vs. employee.

Not to say employees all make a lot of money. Janitor probably makes a fairly predictable minimum wage level in the US.

On the other hand an employed software developer or other engineer might have a 5-10x wage disparity (even within a given country) for various reasons. But it won't be an "actor" waiting tables versus an A-list celebrity.

Once you expand this to doctors all over the world. This will become definitely true. There are enough doctors in third world who make < $10K a year.

Even in the West, a doctor who becomes the CEO of a successful medical supplies company or the administrator for an upscale hospital will make more than a doctor running their own practice who make more than a regular doctor employed by a corporation. Keep in mind there’s also a wide variety of “medical practitioners” like chiropractors, therapists, various “unlicensed medical practitioners” who practice eastern medicine etc. Even within traditional medicine you’ve got your small GP whose struggling to keep their practice afloat (it’s a regular business) and extremely wealthy surgeons or other doctors who identify a niche they can make extremey lucrative (eg unscrupulous pain management doctors who process high volume and low effort clients).

There’s a wide variety of outcomes even after the great filter that are MCATs and medical school.

For example, Thomas F. Frist Jr. is worth ~13 billion. Now granted at those levels he’s more an entrepreneur/businessman as all such people are. Still, the difference between his net worth and a regular GP making $400k is probably about the same difference as a musician worth $300 million and a musician making $200/year.

Perhaps the problem is there are simply too many musicians all fighting for the same fixed size pie. I'm guessing the reason is there are a lot of people willing to work for a very low pay because they want to be a musician and not that they see it as a profitable pursuit.

This is what is known in economics as a compensating differential. It's also my pet theory for why bog standard backend devs tend to get paid a lot more than game devs, even though the game devs tend to be more skilled and harder working.

So what you are saying is that because the job of the backend dev isn't as interesting as game dev,they are paid more? I very much doubt that's the reason.

No, it's the other way around. Gamedevs make less, because there are so many people that want to work as gamedevs.

While I absolutely disagree with the above comment that "bog standard" backend devs have less skills than game devs [0], the call to "passion" does tend to deflate salaries and inflate working hours (at very real costs of work/life balance and burnout/early "retirement") in games. (It's among many reasons game developers pretty much need to unionize to avoid mistreatment from management, because "passion" is always going to be a weakness in negotiation.)

[0] The call to "passion" tends to work the other direction too in that game developers are overwhelmingly young, fresh out of school, and the turnover ratio in the industry implies a huge turnover of skills and experience over time as well as consequent losses to institutional memory. There aren't a lot of safe spaces in games to build skills and game companies have fewer incentives to retain skilled workers than a lot of the, for instance, "dark matter" enterprise uses of backend developers where the backend developer becomes an institutional knowledge bottleneck.

Exactly this. No need to drag Pareto out of the barn just because you see 80%. The fundamental issue is a huge supply of wannabe musicians. If the distribution were completely flat, nobody rather than a small percentage would be making a living from Spotify. Not exactly new or groundbreaking stuff.

Pareto is an observation of the distribution, not some special insight into “why” the result is Pareto. Just saying this phenomenon appears everywhere - the underlying causes may be the same or they may be different but the distribution remains the same.

Although if that's the case there then the average earning of the top 20% of musicians is at most £800 a year.

If you fail MCAT or LSAT you can't even study for a medical/law degree. If you throw random samples into FL Studio and publish the result on iTunes or Spotify you can claim to be a part of the oppressed 80% that earns less than £200 a year.

But once you get your medical/law/MBA/HR degree you can be incredibly mediocre at your job and still get six/seven/eight figures a year.

It's entirely down to organised (guild) gatekeeping and managed perceptions of value, not actual value provided.

More, it's covertly about political power.

Medicine and law are not the sure fire lucrative professions they once were.

Law and medicine aren’t winner take all fields so that’s not a fair comparison. Should 80% of authors be able to make a living from their book sales? Athletes? Social media CEO’s?

Fair or not fair is subjective. In my opinion you shouldn’t go into fields with heavy power law dynamics unless you’re comfortable with a very high likelihood of coming out a ‘failure’.

At least it’s gotten more meritocratic than in years past.

This is confusing cause and effect.

Should 80% of middle managers be able to make a living from their work? Politicians? Bankers? Investors? Backend developers?

The fact that there's no question that these people are somehow magically worth it, while musicians and artists somehow magically aren't, is a symptom of the covert beliefs that define value, not a cause of them.

Realistically this is just a different kind of social credit - and no less brutal than the Chinese kind, even though the values are (somewhat) different.

People might think developers should be able to make a living from their work, but that doesn't translate into thinking that developers somehow "deserve" to make a living selling apps on the App Store. One is a job, the other is being an entrepreneur. Most entrepreneurs fail, of all kinds. I don't think it's a value judgement on art or music.

> 80% of professional musicians can't make a living

It might hurt people's feeling, but most of those are not professional musicians.

I don't think it is judgemental to say that to claim oneself as professional, one need to demonstrate that they could make a living out of it. Otherwise, it is no different than a hobbyist, albeit much more time is dumped on it.

In case of streaming, now more people can declare themselves as musicians, since the barrier of publishing has been significantly lowered comparing to physical CDs. But that doesn't mean profit would follow.

To produce hit music isn't easy, and luck is certainly a factor of it.

I think too many non-musicians believe this is a case the population being comprised of a small number of professional musicians and a huge number of untalented hacks.

The reality is that there is while there are a lot of hacks and untalented musicians alongside the professional musicians, there are also actually a ton of talented musicians that are working very hard to write, record, and release music, and just simply never get heard. They submit to pandora or Spotify or wherever and it never makes it into the algorithms. It's up to them to do all their own marketing. We're influenced by survivorship bias and it's easy to say "they should just tour and play out and submit to music blogs!" and it's difficult to communicate just how hard it is to find any traction at all.

This is true, but what ought to happen instead?

I personally don't have strong opinions on a solution, because I think it is a very hard problem. A lot of people that listen to music don't have any interest in discovering new music, or finding music that is a distinct match for their unique personality. They're just happy to listen to what is shoved in front of them. But if you change your approach away from what is good for each listener, and more toward what is good for a healthy culture, then maybe that starts suggesting some paths. I'd personally like it to be more of a combination of aggressively introducing people to new music, making hard not to rank/react to music, and heavily rewarding artists of new music that yield positive response. I also think there should be a form of progressive redistribution of the power law. Just because there's a power low doesn't mean the slope can't be flattened a bit.

Percentages are different than absolute numbers, though. It would be surprising if, for instance, 80% of lawyers earn less than 200 GBP a year.

They wouldn't. They could just work in something else, as probably the majority of people with a law degree do. Only a fraction of those are actually lawyers.

^ this. Eighty percent of actors work as waiters & waitresses. Eighty percent of startups make $0. Why is this article topping hn?

Actors are paid very well, on union scales, when they do get gigs. I suspect well over 80% of actors who get at least one gig per year are going to make at LEAST 10 x $200.

Startups are a different situation, but in fact so different it seems silly to compare.

But the real reason this is on HN is because this is the consequences of applying technology (smartphones, cellular data, cloud scale web services) to an industry (music sales).

I don’t think it’s silly at all giving both a hand.

Both are risky, both Take skill and luck, both rarely work out.

I don’t agree

Are startups such a different situation? You have a few people with a new creative vision and their success is largely determined by how well they can communicate that vision and how many customers they can acquire before their runway expires. Music is a subscription business, and the clever people have an eye to CAC, ARPU, MAU and LTV just as much as startups.

There are probably more people supporting themselves from creative endeavors than ever before. (Proportionally and absolutely.)

Think about all the tiktok'ers, OnlyFans, youtubers, instagram influencers, etc., who might have been otherwise dismissed as “the pretty face in the office”.

This is not to say any significant proportion will end up “rich”—no different than the rest of us—but there have never been more “exit ramps”.

There are many places in between the place we are headed, aka "everything is streamed, streams pay basically nothing" and where we used to be.

A collective action by artists to force streaming services into a better deal seems like what is required, tho the general appetite for collective action in 2020 still seems a little lacking.

Wouldn't negotiating a "better deal" for the 80% of artists earning less than £200 likely just raise costs on the already-expensive streaming platforms to help pay for it?

But then if you look at Spotify's earning report, they are losing money. A large percentage of the cost is music licensing. I think the solution is the streaming services like Spotify either 1) comes up with more revenue streams 2) Raise prices on their core business, the subscription prices higher than $10 a month. If the second option is happening, I am sure we will get another HN discussion post, with some people complaining its too expensive. So we have to think, are we the consumer, by demanding that we want cheap "all you can eat" music subscription, we are hurting the musicians? If you think about it, $10 a month is two cups of Starbucks coffee. I drink more cups of coffee a month than that. And how much effort is it to make two cups of coffee and the coffee beans are industrially produced? Versus a musicians writing a song and perform the song? I claim the latter involves much more effort.

Also lets remember how we ended up with the $10/month all you can eat subscription. Pirating, CD rips, online MP3 sharing, Youtube music videos, etc. The majority of the people don't want to pay for music anymore. I feel people are more likely to value a physical good. For example: I feel somewhat balanced for paying $5 for that Starbucks coffee because I get a physical thing in the end. In the early 2000s, the computer and internet was the new thing, not everyone used it, and it was a bit complicated. So using it made me feel like I am "smarter", more frontier chasing, more elite than others. And there were ideals like internet freedom, free access to information. And then when I discovered there is MP3s, copy and paste, BitTorrent and Napster, I felt like I have just been bestowed special powers. Through my "hard" work with computers, I gained the rights to listen to music for free. I actually felt I was righteous to download music from the Internet and listen to them. Had content locked behind a paywall, had to pay for that? It was against internet freedom, it was an outrage. Then I remember when Steven Jobs later came out with Itunes and every song is 99 cents. I felt, 99 cents? alright, it's only a dollar and really not that much. That was the first time I started to actually pay for music. But the music industry and musicians were outraged because Steve Jobs is making their work worth only a dollar. Job's point was that if you charge people more than 99 cents a song, people would just pirate. I agree with him. The later "all you can streaming" subscription came out with the competitive advantage being even cheaper than Itune's a dollar a song purchase scheme.

But then everyone as the desire to seek for cheaper prices and better access. Maybe its just natural progression of things and we can't fault for that. Stakeholders have to adapt for change in behavior and landscapes. I believe the advantages nowadays for a musician is that "getting yourself known and advertise yourself" is cheaper than ever. And there are so many people out there that you can easily reach that even a niche artist can find audiences. Its much easier now to create a fanbase and consistently communicate and maintain a fanbase. And when you have a fanbase, you just have to figure out how to monetize that. Concerts, fan items, album sales, even sponsorship and advertisement, a Youtube channel makes you a lot of money already. Look at the amount of fans a Youtuber and TikTok star has and how much they earn money from the fanbase and popularity, they make a lot. Justin Bieber became a star on Youtube and that jump started his career. Lindsey Stirling became a star because of Youtube. Without the internet and "free access" to content the internet is providing, I don't think both will be as well known as they are now. Not sure if they would even stay as artists.

Think about how weird the past 100 years have been.

Musicians have existed far, far longer than recording technology has. In the past musicians got paid For performing. Maybe the odd thing is expecting to be paid for decades for a few weeks in a recording studio.

The new system only works because smaller bands are subsidising the bigger ones.

For example. I only listen to smaller indie bands on Spotify for a month. I give Spotify my £10 for the month.

Does my £10 go to those smaller bands? No. It gets given to Lady Ga Ga because she got 100 bazzillion listens that month. Even though I never listen to her music.

Spotify should work out who you’re listening to and give them a direct slice of what you have paid, rather than putting everyone in a pot together and dividing by number of plays.

It would be fairer, but it would mean the bigger bands earn less, and expose the fact that streaming really isn’t making anyone enough money.

How could it when I’m now paying only £10 a month for what used to cost hundreds?

But it’s better than piracy!

sorry, but I don't think what you're proposing makes sense. The same way you're listening to small bands, millions of people are listening to the #1 hits. The result would be the same, the big names getting millions and small bands getting a few bucks.

Thought experiment.

Imagine I only listen to one song in one month by one band who currently make ~0 on Spotify.

In my new system, they now make £10.

Sounds like this only works if people who listen to smaller bands/indie music listen to fewer songs on average. I'm not sure if this is true. People who find themselves exploring niche tastes are probably "enthusiasts" who do more listening and listen more broadly.

It's all hypotheticals until there's some data.

You could just as easily have an enthusiast who finds a few new indie albums per month and listens to them all the way through, or someone who leaves a top-40 playlist on in the background.

From the article: 82 per cent of respondents earned less than £200 from streaming in 2019, including some with “millions” of streams.

This just could not happen with what I’m suggesting.

Example: The band above, which earned < £200 must have at least 2 million streams a year = 166,666 a month

For simplicity let’s assume each of those 166,666 streams is a unique user. Each also listens to 1999 other songs that month (about 5 hours a day of music seems average?)

So each owes the artist 1/2000 of their £10 subscription = $0.005

166,666 streamers * $0.005 = £833.33 a month = £10,000 a year.

If we assume that they'd make more from your (plural) personal 10 than they'd make from their tiny fraction of total revenue, then yes.

The whole point of the article is saying 80% of bands only make £200 a year.

A band only needs a few hundred fans to easily get above that.

Let’s do some math:

100 fans listen to their music only 5% of the time.

100 fans x £10 x 12 months = £12000.

Your 5% of their listening gives you £600.

3 X higher than 80% of bands. And with only 100 fans. And only listening to your music 5% of the time!

Sorry, I didn't mean to give the impression that I was disagreeing. Yes, I agree with you.

Haha. Sorry! I though it was a sarcastic yes! It was good to actually work it out anyway for my own peace of mind :)

Next somebody will say they need to be weighted according to song-length because the concertos of Vivaldi are much longer than a pop-song. Of course, ultimately, every playthrough must be tracked down to the second.

Let the law of large numbers do its work.

I know you’re joking, but I believe bands are already gaming it by having loads of short songs. So maybe that is actually fairer!

> In my new system, they now make £10.

I am not sure how this works in regards to economies of scale. However all artists are free (except for contractual agreements) to release their art independently and keep the whole pie.

Let's take your £10. Now spotify has operational costs, staff salaries, operational costs. How much is your £10 worth now?

Well its not actually too hard to work out you could take a look at the balance sheet. But I gather your £10 is worth quite substantially less.

This does not include any further cuts like for the record label, song writers, produces, marketing etc.

TL;DR; your £10 is not worth £10 if you factor in other overheads.

Of course it makes sense – if all of the OP's 10 pounds per month went to the bands he's listening to, they would get his 10 pounds every month.

Right now they get almost nothing, because the current model redirects his money to the major labels' biggest artists. Understand?

>Spotify should work put who you’re listening to and give them a direct slice of what you have paid, rather than putting everyone in a pot together and dividing by number of plays.

I think this is what YouTube does with their premium subscription service for content creators. You get a chunk of the YouTube premium revenue based on how much people with the premium subscription watched.

It’s obviously the fair way to do it! Possibly they’re able to do it because there’s more money available there than music streaming?

> Spotify should work put who you’re listening to and give them a direct slice of what you have paid, rather than putting everyone in a pot together and dividing by number of plays.

I'm not sure this is really fairer, or practical.

Listeners that listen to less music (well, fewer artists at least, but that feels like its often going to correlate) being more valuable feels like it creates weird patterns and incentives.

If you only listened to one song in a month, should that band get your full subscription cut? What if you listened to no songs, but didn't cancel?

In any case, I imagine there's an aggregate effect where the whole pool of spotify listeners habits ends up being something that approximates a normal distribution and paying per-user vs paying per-stream would end up basically the same. You listen to 40 niche artists one month, 10000 other people listen to 40 popular ones, the popular ones get 10000x the revenue... There are bands with thousands of monthly listeners, and then ones with tens of millions of monthly listeners. The few in the latter bucket are gonna dominate the payouts.

Basically my opinion is, yeah! Why not? If I only listen to one band, have my money! Why does anyone else deserve it any more than they do?

Or if you want Spotify could do it over the year rather than the month so it’s less extreme. I just want my money to go only to bands I listen to. Is that so crazy?

If I listen to no music, maybe then it can just go based on my average listening history, or last month.

Don’t let a few edge cases put you off a much fairer way of distributing the money in general.

I have to agree. I'm not sure I understand why any other artist should receive that subscription money if I paid for a service abd only listened to a single artist. The service got their cut. Shouldn't the artist make their money for my listening preference? I clearly would not have paid for that service if that band wasn't there to listen to. Beyond fair, it seems well deserved.

The opposite of that is strange to me. Seems akin to buying a record at a record store and having my money go to other artists because people usually buy their records.

> Seems akin to buying a record at a record store and having my money go to other artists because people usually buy their records.

When you spell it out like that it shows just how insane it is!

We'll technically most of the revenue from record sales goes to the label, which they usually use a part of to find and sign new artists (so other artists do benefit).

Ha, you’re probably right! I bet that’s what the main problem is anyway! I’ve been trying to work out some math and forgetting they’re all getting totally screwed but the label!

It's definitely true that the label gets the majority, and Spotify in this case, but there is (usually) a per-record cut for the artist in the physical album version of this transaction.

> If you only listened to one song in a month, should that band get your full subscription cut?

I don't understand why this hypothetical would be an argument against user-centric payments. If you only listened to one band in a month, what claim does any other band have on your (net of Spotify's cut) payment?

What if you didn't just listen to one band for a month? If you mostly listened to one band, but then also to another band just once, should it be 50:50?

If not, then you're somehow going by number of plays.

(Definitely though, only those two artists should get any of your money, no matter how it is sliced.)

Yeah exactly. I’m just using the one band thing as an extreme example. My money would just get split between who I listen to.

There’s some evidence that current streaming habits are actually affecting how music is produced. For example, it seems most listeners will spend a few seconds listening to a second before deciding whether to skip it, so intro sections in pop music are disappearing.

If your money was split between what you listened to, wouldn’t it make sense to split by time listened or length of the tracks? That might start incentivizing musicians to create inordinately longer songs to try to get a bigger slice of your money... hmm...

Listening habits has always shaped how music is made.

David Byrne explains that quite well in "How Music Works", his take on the history of how music is made and how it sounds being correlated how it was usually played is quite interesting. Tribal music could be more beat/drum focused as those are played in open air, where the bass sounds can propagate without room interference. Going from there to the point where he talks about concert halls and how different architectures (from cathedrals to halls designed for orchestras) shaped how music was made to sound in that kind of room. And later on how recordings have changed all of that.

So music has been shaped and will continuously be shaped by how people listen to it. Nowadays music is a very personal experience, listening at home, on our headphones, we experience it outside of the context it's existed for millenia before good recordings were possible. Where the experience of listening live music was always attached to the place it was played. Now we listen to it completely devoid of space, this shapes the kind of music made, how it sounds and so on.

>What if you didn't just listen to one band for a month? If you mostly listened to one band, but then also to another band just once, should it be 50:50? If not, then you're somehow going by number of plays.

Going by ratio of plays of bands I listened to makes total sense.

That being difficult, even a 50:50 between my 100 streams band and one I listed for 1 stream is still better that sending those money to third bands...

Would you count total time or total plays? In one case you give too much to ambient noise recordings and similar genres, in the other bands like Ramones would get an unfair advantage.

A composite count metric that smooths play count for larger tunes vs more plays for shorter tunes would solve most of that.

E.g. 10 plays of Ramones 2.5 minute songs == 10 unit's worth == 2 plays of an hour-long ambient piece.

The equivalency could be adjustable to something that most accept as fair.

What the system should reward is material that is actively chosen by users. Whenever the system chooses a track, that should not be rewarded as much (or perhaps not at all) compared to when the user chooses a track.

>If you only listened to one song in a month, should that band get your full subscription cut?

Yes, totally. That's why I pay my subscription.

>What if you listened to no songs, but didn't cancel?

Then the money from those should be put in a pool and handed to artists with actual streams that month, proportionally...

If there's a niche artist which has a 1000 dedicated and loyal listeners, that's an audience paying $10k per month to listen mostly to their music. The platforms and the labels should get their cut, sure, taxes paid, and so on, but if the system is fair this kind of revenue may suffice for a small indie artist to make a living. How many listeners should an artist have to break into four digits monthly?

In a similar vein, I'd like to get my company to give money to OSS projects. I'd love to send a minimum of $20 a year to every project we use, and a far larger amount to 1) the ones we enjoy using and 2) the ones that save us the most effort.

But that would be writing a lot of checks and a pretty big total overall. What else can you do? A lottery system? Round Robin? 3 years is a long time. Ultimately I think you need a bigger pool, and I have only suspicions what that might look like.

User centric payments are a big debate in the industry just now. Deezer has been trialling this. As some people below have said it may or may not be the answer - the jury is out. Chances are it would have a smallish benefit to smaller musicians, very little impact on the revenues of globally recognised superstars, and almost no change for those in the middle.

Interesting it’s being explored and thanks for the ‘user centric’ terminology.

I just replied this to a comment below. Would like to get your take since you clearly know something about what’s happening.

The whole point of the article is saying 80% of bands only make £200 a year.

A band only needs a few hundred fans to easily get above that.

My attempt at some math:

100 fans listen to a band 5% of the time.

100 fans x £10 x 12 months = £12000.

Your 5% of their listening gives them £600.

3 X higher than 80% of bands. And with only 100 fans. And only listening to your music 5% of the time!

A few hundred fans is a LOT though. I think a lot of people outside music significantly underestimate how hard it is to get to “a few hundred fans” and how much time, budget, talent and sheer luck that takes.

In real terms acquiring 100 fans - who listen consistently and repeatedly - could easily cost tens of thousands of pounds.

Here are some numbers plucked not entirely from thin air:

If you’ve got a band of four people who write and record enough music to drop out a new track every six to eight weeks (often required to build momentum and sustained engagement) then you’re probably talking about at least 50-60 hours of their time per track between them - and that’s a pretty conservative estimate going from initial song concept through rehearsal to recording in 15 hours - so four or five sessions per song. In reality it’s probably a lot more unless you are super focused, very talented and work well as a band.

If you take average UK wages then that’s a cost of around £920 per track. You’re looking at £10k just to write rehearse and record nine tracks - before any production, mixing, mastering, additional session musicians or anything else. Throw in maybe another £500 for those costs, per track. We are close to £15k now.

Add marketing, promo, photography, video, design and everything else you need to maintain a significant presence to attract and maintain engagement from fans and you’re easily looking at a year one total cost of maybe £30,000.

Sure you can do all of this yourself - but if so you’re going to have to give up your day job. And marketing and promo of music is HARD with lots of gatekeepers and lots of stuff you can easily get wrong, so it’s going to mean you move slower than hiring in someone who knows what they are doing.

Add in a tour - and for a lot of musicians, playing live is the best way to add new fans - and you’re looking at doubling or tripling that. For most artists playing live is a cost until you’re playing headline shows in decent sized venues. If you’re headlining a 500 cap venue where tickets are £12 then there is £6000 on offer. Take off the VAT and there’s £5000. Venue takes 20-30%, promoter a similar amount, there’s maybe £2500 left to pay three bands. Headliner gets the lions share - so maybe £1k. But that’s for at least four people - and likely sound operator and a tour manager/driver all of whom need to travel, sleep and eat. At this stage you probably have an agent taking 15% and a manger taking 20% so there is now maybe £700 to get you and your two crew to the gig, into a hotel, fed and back on the road. You need to pay your sound and you need to pay your tour manager - and you need to hire and fuel one - or more - vehicles. Sound is going to be £150-£200 per day - more if you’ve got complex requirements - and your driver will be similar. So now you’ve got £300 per show for food, beds and fuel for 6 people. You get some cash from selling merch but you have to front those costs. A good night selling 30-40 t-shirts brings you another £500 clear after costs. So for an artist big enough to headline a 20 date tour over six weeks (3 shows a week) in 500 cap venues they are going to walk away from that tour losing £120 a day each for lost wages and then the other out of pocket costs. Could be a loss of £1000 a day unless you’re crashing on floors and eating supermarket meal deals. Your tour just cost you £40k+

18 months in you’ve spent £100k.

Now, sure, after writing that music, effectively promoting it, and building your audience touring you’d have more than 100 fans. You’d hope.

Let’s say you’ve got 25,000 monthly listeners on Apple Music who have theoretically shifted to user centric payouts. (I’m choosing Apple Music because they are premium-only so it’s easier to model).

Subscription is £9.99. Take off the VAT. Take off Apple’s 30%. There’s £5.82 left to split each month, £70 per year.

If you are 10% of your fans listening then you’re getting £7 a year.

Your 25,000 fans are bringing you £175k.

Your manager gets 20%.

To maintain this, your operating costs are something like £100k a year.

> Spotify should work put who you’re listening to and give them a direct slice of what you have paid, rather than putting everyone in a pot together and dividing by number of plays.

Representation based on number of plays

Problem is, suppose you listen to almost nothing but some indie band all month, and you happen to land on Lady Ga Ga just once or twice by accident somehow. Now since proportional representation by number of raw plays has been replaced by number of deduplicated plays tabulated to the artist, £5 goes to Gaga.

Squashing repetitions probably won't make much difference, because some people who like unpopular music listen to it repeatedly like crazy, just like people who like popular music. The big stars are not winning due to more plays; it's really due to just being more popular.

Suppose every Spotify subscriber streams music 24 hours a day. Then is it still unfair to go by plays?

By the way, no mater what, I suspect out of any £10 subscription, something like £9.95 goes to Spotify itself.

The alternative proposal is not to dedup the plays it is to devide the money per user.

Also I don’t know the exact amount of money but it is substantially more than 5%. I don’t know where I read it but I have a memory that involves me hearing or reading that Spotify takes about 30%

How often do you listen to Spotify?

If you listen to smaller indie bands more than the average person listens to Lady Ga Ga, the indies artist you listen to actually get more than £10 worth and Lady Ga Ga gets less.

Some people think it is less fair than a "one subscription one vote" system. It is up to debate, but the payment system does not favor celebrities, network effects combined with good marketing do.

I posted below with some back-of-en-envelope math. It seems obvious to me that anyone with at least a few fans would do better.

It doesn’t many fans at all giving them a larger slice of subscription pie to put them over that £200 a month

> When I was nine years old, I bought Vanilla Ice's "Ice Ice Baby", and I listened to that shit (I'm not joking) like, 250 times in a week. Like a fucking idiot. That's who's listening to this shit. Getting a billion streams in a month. It's fucking nine-year-olds. Our fans have, like, a hundred and fifty albums that they listen to, on a sort of rotation, at least one of them once a month.

- Patrick Carney (of The Black Keys)

I have no qualms with Spotify's business model: a 30/70 split seems fair. But their incentives are absolutely aligned with the record labels and the huge artists, not the smaller artists.

The promise of the golden era of music piracy was that it'd be a force to level the playing field for all artists and give the little guys a fair chance to compete with the bigger guys.

Spotify should give a subscriber's money to the artists one listens to. It's not just what's fair; it's common sense, and it would absolutely breathe a new life into the music industry.

I’m gonna have one more go at justifying this. Probably just talking to myself at this point...

Imagine Spotify only has 2 users. Both pay their £10 a month.

One listens to 2 hours a day of their fav band on their commute.

The other listens to Taylor Swift on repeat 18 hours a day.

Current system, Taylor swift gets £18 and the other band gets £2.

Use centric version I’m suggesting, both get £10, just as they would if it had been a CD they were listening to.

This seems more fair to me.

You're a sample size of one and so you really think that's representative of Spotify as a whole?

As far as I’m aware Deezer does just what you’re suggesting.

It's funny you mention Lady Ga Ga, there was an uproar around her back in 2007, that she only gets 170$ out of a million plays. I'm not sure how many millions are there in your "100 bazillion" listens, but it could be she is also not earning a significant percentage of her income through Spotify

https://www.independent.co.uk/arts-entertainment/music/news/...

An other problem is commoditization of music. With modern DAW software, a good autotune, youtube tutorials and some time you can make commercial-sounding music from the comfort of your home with a shoestring budget (especially if you pirate said software).

Even if the music industry dies, music itself is going nowhere. It sucks for people who really love making music and want to live from it but from a purely capitalistic perspective it just doesn't add up: there's a massive amount of offer and a fixed amount of demand. You can find dozens of incredibly gifted artists on Youtube, Twitch or elsewhere who'll never manage to live from their craft.

It's like becoming a pro footballer, it's amazing if you make it but it's not a reasonable long term career prospect if you're not incredibly gifted and incredibly lucky.

> The fundamental problem isn't streaming, as much as it is that natural systems follow power law distributions.

I disagree. The fundamental issue isn't power law distributions either, it's the fact that £200 won't even pay for a new guitar.

It's not hard to imagine that the distribution of earnings in other fields is lopsided too, but even average-earning teachers, corporate lawyers and secretaries make a wage they can get by on. Music as a whole might just undervalued.

Music is also very unequal. I haven't heard of teachers earning less than £200 a year, nor of teachers earning as much as say, Taylor Swift. The parameters of these two earning distributions are widely different.

It's interesting, since Music is and has always been very valuable in every culture since time immemorial. Is it undervalued because the post-industral world just tends to undervalue creative work in general? Is it not really that undervalued, and we just get that impression because such as small part of the industry captures such an insane percentage of profits? Could be both to be honest.

There is a fundamental difference here though. Being a teacher is a form of employment, where at least theoretically there is a match of supply vs demand.

Music in this context is more like a business, where there may not be demand. You don't get to create a random business and expect a livable wage from it. Music as a whole may be valued, but music from any particular band may not be.

No, the fundamental problem is not Pareto / power law. The fundamental problem is simply a huge supply of musicians. There's only 8bln total revenue / year in total to be divided. That's just not much for more than a million artists, even without any other middle men. No change in distribution will change the fact that only a small fraction of the artists can hope to make a living from it.

> There will always be superstars that make the majority of the money, and tons and tons of wannabe artists that make almost nothing. That was just as true 20 years ago as it is today

I partially disagree. The power law dynamics were present 20 years ago. However the DEGREE of inequality between the 'superstars' and average musicians has skyrocketed, possibly due to technological changes.

On one hand, ease of access lets a wider demographic become musicians (think of the proliferation of SoundCloud rappers and YouTube singers). On the other hand, popular artists are able to reach a wider audience and grab a wider slice of aggregate 'attention'.

> The fundamental problem isn't streaming, as much as it is that natural systems follow power law distributions

I think that's an important truth to keep in mind when discussing this.

> That was just as true 20 years ago as it is today.

Hmm. Let's consider 3 different periods of time.

1. Olden times before radio. To listen to music, you had to play it yourself, or go see it in person.

2. Radio and Records exist.

3. Internet streaming.

Each artist has a problem along the lines of: how much of my time do I spend figuring out how to make money, and how much making music or performing?

Obviously, after a certain point, it is way more efficient to let Warner Bros. do the marketing, etc.

However, the power dynamic of this new business model means that that "natural" power law (if each musician were doing all the business stuff themselves), is more like a power-power law. Each step above increases the max payout to the Mozarts and the Jay-Zs, but more importantly, it concentrates power in the hands of the rights-holders.

Among other things, now your cost of entry to the super-star lottery is to give up rights that would otherwise give you a better chance at a lower, but more certain return in another system.

I agree that we can't go back. But the fact that someone twice as good may get 10 times the attention is not the only effect at play.

In an ideal society, we get to choose how the market works. And it should probably work differently for businesses that have different functions in society. For example, some different classes might be Entertainment, the Internet, Power & Water utilities.

I object to the description of lesser-known artists as "wannabe". Mainstream commercial popularity results from a combination of luck, connections, and palatability for mainstream tastes. Vast numbers of talented, passionate artists will never achieve mainstream popularity because they don't strive for it or because the selection process is mostly arbitrary.

The Long Tail[1] talks about this in detail.

[1] https://www.amazon.com/dp/B000JMKSE2/ref=dp-kindle-redirect?...

In Spotify, Youtube and a great deal of content platforms you don't necessarily make money on it. You generally make money on conversions to buy merchandise (which you can easily increate profit margins) or going to shows (which also gets people to buy merchandise.

Eh, when I started playing and recording with my first serious band some 20 years ago, our physical EP that sold around 1000 copies made considerably more than spotify would give us today, for 1000 listens.

Of course, Spotify (and the likes) would give us much, MUCH more exposure to listeners all over the world - but buck for buck, it's a worse deal on the scale a lot of amateurs are operating.

The best way to support smaller acts is:

1. Go to their shows.

2. Buy their physical or digital copies.

3. Buy their merch, if there's any.

4. Donate.

Digital streaming services will pay them pennies. So one needs to actively support artists.

You can't really compare 1000 sales to 1000 streams. Each individual sale would (hopefully) have resulted in many streams over its lifetime.

Also many of the streams wouldn't have translated to sales. If it wasn't for the algorithm to pick the tracks as background music when the user was doing whatever else, the song wouldn't have been played at all. Similar how pirated game downloads wouldn't translate to sales - often the game wouldn't have been bought at all, and the person would have just done something else with their time.

>The fundamental problem isn't streaming, as much as it is that natural systems follow power law distributions. There will always be superstars that make the majority of the money, and tons and tons of wannabe artists that make almost nothing.

Well, for millenias it wasn't that way. So not 100% "natural".

It happened because of the extra distribution power recorded and now streaming music allows.

When you didn't have recorded music, musicians all around the globe could make a living in their local communitities.

I used to be a performing pianist in the limited gigging world. I got paid to play cocktail hours, charity events, contra dances, and folk festivals. These were once in a while gigs, netting me usually 100-150 on average. I took home 3k total over years of doing this.

To record would've been a whole new world. Either shell out a years' plus worth of performance wages to get an album made, or use my coding gig to prop it up. I decided I am only good, not great, and meager streaming revenue and occasional $20 buys couldn't be worth it.

In summary, play music for fun. If you see anyone making a decent wage off music, great for them, but unless you're prodigious or attractive or well connected, it's a 1% craps-shoot.

I recently saw some numbers from who I thought was a very popular author. Content creation is a labor of love.

Thanks for playing the music.

Yeah, Devin Townsend (who I would consider a successful musician) recently discussed how much he makes in an average year - and it was something like (going from memory) 70K per year before you factor in all the expenses associated with being a musician and creating records (which are quite large!). Touring is where much of his income comes from and he had recently “invested” in creating a new album and setting up a tour, but COVID wiped that all out putting him in a less-than-ideal financial situation.

I think that much like working at McDonalds or dealing drugs most people don’t make much - the financial rewards are fairly concentrated to a few individuals.

Would be interested in seeing a source for this if possible

I could have sworn there was a relatively recent FB post on it, but I wasn't able to locate it.

That said, there's a 2015 interview where he said $60K per year - not sure if that's in CAD or USD.

https://metalinjection.net/shocking-revelations/harsh-realit...

I have friends that love pottery, knitting, photography, painting, and a million other creative pursuits. But they also have day jobs because it's difficult to make money in the arts unless you have millions of fans.

With any other job we would say, "well, if you're only making £200 a year, maybe you should get a better-paying job." I'm not sure why this is different.

> I'm not sure why this is different.

There isn't an industry with a handful of corporations like Spotify making billions of dollars off your friends' pottery while millions of people spend hours gazing at it.

Spotify has never posted an annual net profit.

If you want to blame somebody, I’d say you should blame the listeners who overwhelmingly listen to a small number of popular artists.

Alternatively, blame the record labels who contribute less and less value while still skimming massive amounts of money. See: https://www.techdirt.com/articles/20110707/03264014993/riaa-...

> Spotify has never posted an annual net profit.

Because a company choose to roll all of its revenue into growth does not mean that somehow that money doesn't exist and couldn't have instead gone into musicians' pockets.

Spotify made $7.4 billion in 2019. Imagine a world where Spotify had only made, say $1 billion, and all of the world's streaming musicians had made $6.4 billion more, distributed among them. Call me crazy, but that latter world sounds more like the one I'd prefer to live in.

What do you think they spent that 7.4 billion on exactly?

They literally did give it to the artists, or at least, the record companies.

I’m confused as to what your second paragraph is trying to say. Spotify made 6.7B In revenue last year - not profit. Of that about 5B is paid out to the world’s musicians and record labels (technically bandwidth is probably in that number too, but it’s likely not a huge factor). The remaining 1.7B is marketing, R&D, and admin.

In other words, Spotify’s 1.7B cut is about 25%.

For comparison, in 1995 if you bought a CD the record store would take a ~35% cut.

https://www.nytimes.com/1995/07/05/arts/pennies-that-add-up-...

>There isn't an industry with a handful of corporations like Spotify making billions of dollars off your friends' pottery while millions of people spend hours gazing at it.

Facebook, Instagram, Twitter, Pinterest, Etsy...? What are social media sites if not just the Spotify for your eyes? Every time you post anything about your pottery to try to drive a sale (or not), the platform gets more free content that directly influences literally billions of their own profits -- and all you get are people spending hours (if you're lucky) gazing at it.

> Facebook, Instagram, Twitter, Pinterest, Etsy...?

Yes, I would lump all of those in the same general category. (Though the effort it takes to post something on Facebook is much less than the effort to write, perform, and record a song.)

The effort to post a song is the same as it is to post anything else. The creation of the song is what takes time. But then it also takes time to create a painting or vase or quilt or whatever else.

Etsy is like the Spotify of pottery and other crafts. Most people on there make very little, some make a lot.

Surely you could say this about almost anything? 80% of an unspecified group of self-identified musicians don't make a lot of money in music isn't a very interesting statistic.

This just in as well, "over 80% of basketball players make less than $200 playing basketball" if you count recreational leagues.

There was also a line "Including some that have millions of streams" but it looks like those are the ones in the 20% that didn't earn less than 200 in the year.

Maybe someone with more knowledge can answer this for me but what exactly is a label for these days? You don't need funding to distribute CDs these days so why can't the artist just put the content on Spotify and Youtube themselves?

AFAIK you still need to have a label to publish on streaming services, but there are now services that will act as your label and publish for a very low membership fee (<30/yr).

A label will often pay to record your music, including hiring the best producers or session musicians, getting other established artists featured in your songs, getting the best people to mix and master it to make it sound great. Then they pay to market it and put it on the radio (which is just one big ad network these days).

Really it's very similar to raising venture capital. You don't need to do it, you can bootstrap a company with almost no money and people do it all the time. But if you have the chance to work with an expert who's willing to put in a lot of money upfront, it can really accelerate your trajectory.

Right, so if you aren't forced to use one, how can they possibly overcharge since if the value wasn't in the service you would just drop the label.

I want to know how many % of developers earn less than $200 a year in the App Store.

Probably 80% :)

Except how hard is it to learn to code, write a actual app, pay money up front to even get in the exclusive store and have your stuff vetted, versus just record and upload an mp3 to some music service.

The distribution might be much worse in music land than in commercial software repositories.

(Edit: changed "spotify" to "some music service" because apparently it's not so easy to upload to spotify as an independent artist. It was more about the general idea.)

Edit 2: y'all are making a good point about making music not being easy either (I did underrepresent that), but there is no point posting the same reply five times. The subthread where I replied to that is here: https://news.ycombinator.com/item?id=25352484

You can't even pay money up front to upload to spotify, you have to get a paid subscription to a service last time I checked.

Paid subscription? As an artist you pay to be on Spotify? Tried finding it just now but it just says

> To get your music on Spotify, you need to work with a distributor, or with a record label who already has a distributor. They handle all the licensing and distribution, and pay your streaming royalties.

Kinda odd, why would Spotify not just let you enter an IBAN and send you your share as soon as you accumulated a minimum of €10 or something? Regardless, I see this is not as easy as signing up for YouTube and making money off of adds there.

I suppose I didn't mean Spotify very specifically, it just happened to be the example and I figured they'd rather have a broader selection of music for their subscribers; the point however works just as well with YouTube or other services.

I don't get it either, but there are distributors out there that make the process fairly cheap and painless.

I used CDBaby[0] since I had only one album and don't expect the 9% revenue cut they take to amount to more than the one-time $30 fee.

If you're more prodigious and commercially ambitious, Distrokid[1] charges $20/year and takes no revenue cut at all. (It was even endorsed by the founder of CDBaby on this very site[2]!)

[0] https://cdbaby.com/ [1] https://distrokid.com/ [2] https://news.ycombinator.com/item?id=6519175

There’s no “just” in “just record”: this comment either overestimates the difficulty of learning to program or underestimates the difficulty of music production

I am curious if you have tried to learn a musical instrument or learn to sing? Learning to play a musical instrument (or sing) at a level were someone would want to pay you, is probably equally hard, if not harder.

You don't have to actually play an instrument to mix things together.

But I take your point. With that analogy one can probably find an "app maker" that similarly is just drag & drop for some basic CRUD app. Just not sure that anyone actually makes those and tries to publish them to commercial repositories whereas I did get a lot of mp3s sent via MSN because half my friends were making music, and honestly many of those tracks were hard to distinguish from what I'd expect from a professional. Nowadays there wouldn't be much stopping them from signing up for a random music site account and uploading the songs there.

And yes I did learn to play an actual instrument, I know it's shit^W painfully slow (that's why I stopped taking lessons).

I think there is something about my brain that just wasn't meant for music. I found it really easy to teach myself programming but after years of trying to understand music I was never able to progress past learning other peoples songs.

There is tons of info online about music theory and such but if you follow it literally you end up with something quite uninteresting.

I recently took up drawing after quitting music and found it somewhat easier. I guess it makes more sense to my brain when the target is "Replicate what you see with your eyes but with a pencil" instead of trying to understand the complexities of why music sounds good.

Learning to play music and paying for recording equipment isn't exactly easy either.

I wonder the portion of apps by solo devs versus songs/albums/whatever music units by solo artists (who also didn't have anyone else involved in the process). I definitely don't have a strong prior for which has a lower barrier to entry.

We aren't talking "hello world" nor "row row row your boat."

Not to mention that you need an upfront investment to buy an instrument, followed by putting in the hours to learn it.

There's very little upfront investment in learning how to program. There's some investment in distributing a finished product, but it doesn't come even close to the investment of recording a single song.

> Except how hard is it to learn to code, write an actual app, pay money up front to even get in the exclusive store and have your stuff vetted, versus…

… how hard it is to learn to play an instrument, write an actual song, pay money up front to go to a recording studio, and have your stuff "vetted" by a curator after pitching it?

That number should go down (a little) with Apple's Small Business Program and the reduced commission rate: https://news.ycombinator.com/item?id=25135410

I spent 2018-2019 making a puzzle game in my spare time. Revenue model was opt-in ads. Released for iOS and Android. Didn't do a ton of marketing, but that's okay, it was just a little passion project that I hoped might gain some traction.

Got up to around 70 installs peak, made $6 my first year on Android, and $14 my first year on iOS. Which is to say I made -$80 total since I had to pay $100 to publish in Apple's App Store. I cancelled the iOS app since it wasn't making enough to pay the annual $100 fee, but the Android one is still up[0] and makes ~$1 every couple of months.

Now I'm just waiting for a twitch streamer to pick it up and turn me into an overnight millionaire like "Among Us"!

[0] https://play.google.com/store/apps/details?id=com.umvirate.e...

Just curious, why is this app not available on the Icelandic Play store?

Mainly because I didn't translate it to Icelandic and I didn't want to get dinged by Google for putting an untranslated app in Iceland Play Store. Funny you should mention Iceland though because I recently saw a Tom Scott video[0] in which I learned tons of people speak English over there.

I updated the country availability so Iceland is included.

[0] https://www.youtube.com/watch?v=qYlmFfsyLMo

I would reconsider trying again with a larger budget and try to do some targeted marketing. I wanted to buy it just from your description on the play store but I’m IPhone only unfortunately. If not maybe there is a marketplace for selling your game (the rights to it not copies) like there is for selling businesses. This completed project would likely be an easy buy for someone with more capital than products.

Either way congrats and finishing and shipping, that’s a serious battle in and of itself for a side project!

Most developers are working for companies which pay them salaries, so likely those app generate more than $200/yr. I would say only ~5% of developers.

If the question was worded, what % of apps generate < $200/yr, then I would say ~98%.

A better metric is to work out if that 20% is bigger and better off than the previous generation of artists. I'm willing to bet streaming has made the industry better when looking through that lens.

I kinda doubt it. Streaming rates are akin to radio instead of actual music purchases.

Would you control for population growth? It's always tough in these questions. Do you need twice the music for twice the people? You sure need twice the music jobs, from the artist side. So even if the 20% is bigger, it might be relatively smaller.

Overall revenues are still below 2000 levels[1] and split between more artists thanks to streaming. It's probably worse for the "middle class" who are not getting millions of plays per month but also losing some of the potential income to the "long tail" of artists getting a few hundred plays each.

[1] https://www.statista.com/statistics/272305/global-revenue-of...

It hasn't. I've seen numbers for folks like Dolly Parton. She makes less in a year than I spend on coffee in streaming revenues. It is several orders of magnitude less than she makes in music sales.

Anecdata: I make music with a friend of mine [1]. It's mostly a social thing, but we release music fairly regularly, and have done for about 9 years. When sales were a thing, we used to make some money. Not a lot, but every year or so, we'd break the payout boundary, and get £60 or so. Always a running joke between us about 'phoning Sunseeker' or whatever.

Since streaming became the thing, we make almost no money, and it's a tiny fraction of what we used to make.

In 2013 Q2, we made £29.49

In 2020 Q2, we made £3.00

Don't get me wrong, I know we're nobody, but I'm sure it scales in the same way for a lot of people who are taking this more seriously. Unless you're doing a lot of streams, then you make no money, and certainly not the money you did from sales.

Another bit of info, looking in a recent statement.

723 streams of a track earned us £0.0236.

1 sale of a track earned us £0.4297

Looking at the data, I'm pretty sure that people who listen to our tracks do so multiple times (if you filter by area, demographic, etc., you can pretty much tell that the same person in the same area likes a track and listen to it a lot - say 20 or 30 times) - exactly what you would do if you bought it. But now even if someone listens to a track 100 times (which, let's face it, you probably would in a lifetime), it will earn a tiny fraction of what a sale would for you.

[1] - https://open.spotify.com/artist/6mCvg6sz3K2WfFLaVYvHGl

In almost every discussion of musician income and Spotify that I've, two entirely different questions seems to get conflated together:

1. How big is the pie?

2. Who gets what share of it?

Here in this thread, almost everyone is saying that the total pie for music isn't that big compared to the number of people making it today. As production costs get lower and lower, more and more people can be become musicians and that pie gets sliced into smaller and smaller pieces. Meanwhile, there are only so many hours in the day one can listen to music, so demand is relatively fixed. I agree with others that this is maybe unfortunate, but is basically just reality. Just like writing and working in zoos, occupations that have massive intrinsic reward are rarely compensated well financially.

But there's an entirely separate question. Given some pie of whatever size, are companies like Spotify getting a fair share of it relative to musicians? It's sad if musicians can't make a living can't make a living off their music. But theatre actors and poets rarely do either. But it seems wrong that at the exact same time, businesses are raking in billions of dollars off that exact same music.

We aren't outraged that poets are underpaid because there simply is no money there. There isn't much money to go around in music, but even so, the distributors are taking almost all of it and leaving little for the actual musicians.

Absolutely right. It seems almost every other thread here is missing the crux of the article, which has nothing to do with some alleged musician-listener supply-demand issue. Rather:

Graham Davies, CEO of The Ivors Academy said: “This survey is further demonstration that the song and the songwriter are undervalued. Too much streaming money is going to the major labels, this is an outdated model and needs reform.”

The survey results come amid an ongoing government inquiry into the impact of “the business models” operated by the likes of Spotify, Apple Music, Amazon Music and Google Play.

It doesn't sound like musicians are (necessarily) arguing that we should pay more than $10 to stream their music. Or that they should get more than their share of the pie relative to other artists.

It's that musicians' share of the $10 as a whole should be way more than it is now, and Spotify + labels should get less. And that's a fair claim to make that's worth talking about.

Actually, that quote is "musicians" fighting over share. In this case, a songwriters' group (Ivors Academy) is complaining that performers (via labels) get too big of a share. This fight has been going on since recorded music began and has nothing to do with Spotify or any recent development.

Yes, but 80% of music on streaming services is not that good.

80% of the music you listen to which is probably part of the 20% most popular content.

If you had better discovery you might find something in those under used 80%.

> 80% of the music you listen to which is probably part of the 20% most popular content

"Did you just assume..."

Its nice to uncover a hidden gem, and my tastes have always skewed towards the obscure. In Spotify's defence- they are actually really good at digging up old, unknown stuff that I really like. (I say all this as an ex-professional musician who spent far too much time flicking through vinyl in second hand record stores in his youth.)

Its not as if 80% of the music on Spotify is offensively terrible, its just that its not good enough to buy, and therefore it should come as no surprise that 80% of artists make less than £200 a year.

https://en.wikipedia.org/wiki/Sturgeon%27s_law

£200, divided by £0.0045 (rough conversion or payouts) is 44444 streams a year. 44444 is an exceptional small audience. Even if you 10x the payouts, they would still on make £2000 a year, and the complaints would still be there, 80% of artist are making less than £2000 a year narrative.

The Nadine Shah mentioned in the article, has 5 recording labels, I would say at least one manager, pr manager, marketing manager, producer etc etc. Of course she is finding it difficult. The majority of artists in any field do, in fact a lot of people find it difficult, athletes, musicians, painters, etc, the majority being from the creative or talent side of the fence.

80% of artists probably have extremely low streams per month, and maybe even 0. 80% of 80% make music which 80% don't listen to and make 80% of basically nothing.

If you turn your art in a commodity, then you get paid for its market value. Currently 80% of musicians aren't worth £200.

I’m surprised it’s only 80%. I would have thought it would be higher.

I read things like this but most indie bands I listen to heavily promote themselves on streaming services. One of my favorite artists actually releases music on Spotify before anywhere else.

As always, most of their money comes from gigs and merch. Streaming is advertising more than it is an income source.

> As always, most of their money comes from gigs and merch. Streaming is advertising more than it is an income source.

It hasn't _always_ been this way, though.

Well no, but it's been this way for a very large chunk of the time between the invention of the LP and the advent of streaming music. Historically unless you were in the tiny minority of gold/platinum artists album sales were not a major income stream. Even with non-independent labels it was common for album proceeds to reimburse the label for recording costs and fund advertising and touring. If you received a non-negligible amount of money from recording an album you've certainly already "made it".

Pareto Distribution:

" Originally applied to describing the distribution of wealth in a society, fitting the trend that a large portion of wealth is held by a small fraction of the population.[3] The Pareto principle or "80-20 rule" stating that 80% of outcomes are due to 20% of causes was named in honour of Pareto, but the concepts are distinct, and only Pareto distributions with shape value (α) of log45 ≈ 1.16 precisely reflect it. Empirical observation has shown that this 80-20 distribution fits a wide range of cases, including natural phenomena[4] and human activities."

https://en.wikipedia.org/wiki/Pareto_distribution

I've never been able to develop and intuitive understanding of what sort of phenomenon should obey a Pareto distribution, as opposed to a normal or logarithmic one (which I do feel I understand.) Any nuggets of insight here on HN?

Systems with positive feedback loops tend towards power law distributions. If some success can help increase the likelihood of later success, then for participants they'll reach a level where there's a snowball effect that runs away to enormous returns. Most won't get enough to get the snowball growing.

If you're a musician and you have enough fans, they'll start creating more fans as they tell people about it, large numbers of people will be going to your shows and other people will hear about you, you get on the radio, you get listed as "trending" on Spotify, etc. There's also nothing to slow it down, since once you record a song once, people can listen to it effectively infinitely more times without you having to do anything else.

Many phenomena that are unbounded by physical laws follow power law distributions. Nassim Taleb uses book sales as an example: popular authors get more popular exponentially. But something physically bounded like height follows a normal distribution.

To put it another way, let's say you have two randomly selected authors. Their average earnings are $1,000,000 per year. Is it more likely that they each earn roughly $1,000,000 per year, or that one earns $1,000,000+ and the other almost nothing?

On the other hand, you have two women whose average height is 1.7m. Is it more likely that one woman is 30cm tall and the other is over 3m tall or that they are both roughly 1.7m?

It breaks down for wealth distribution.

It is inevitable given the network effects, the scale, and the limits of human attention. Specifically:

1. A single consumer has the attention span to follow/support only a handful of performers.

2. Performers with higher number of followers are more likely to get recommended, hence get new followers.

3. Having 100 vs. 100000 followers doesn't change the performer's costs. Hence, once a few superstars are established in a niche, you have very low chances of outcompeting them.

If you want to realistically make a decent amount of money, you need to either look at the markets where your costs scale up with the number of clients (e.g. doctors, lawyers, consultants), or at emerging/rapidly moving niches where the dominance has not been established yet.

Of course, the human brain is bad at natively feeling linearity at large scales [0], so a tiny chance of a huge payoff will always feel lucrative, even if the actual chances are against you. There are whole industries relying on people NOT calculating the chances [1] and the whole "become a streaming superstar" thing appears to be one of them.

[0] https://en.wikipedia.org/wiki/Weber%E2%80%93Fechner_law

[1] https://theconversation.com/designed-to-deceive-how-gambling...

I've seen this mentioned here before, but not really that clearly, so let me try:

This is not an unsustainable model. Musicans nowadays get their money through fans, not casual listeners. Music is released for free (Soundcloud) or semi-free (Youtube, Spotify, Apple Music, Deezer, whatever) and the real money is moved through concerts and sometimes merch.

This isn't always enough to pay everything, indeed many of the musicans I listen to have day jobs to pay the rent and the revenue through music is a bonus at best.

Has it been different for unsigned artists at any point in time? After all you basically had no distribution channel before the internet, now you have one that doesn't make much money, but also doesn't cost anything. That sounds like a mild win for getting an audience to me. People do it because they like making music, not because they want to make money.

One of my favorite artists, Professor Kliq, offers his music for free and under a Creative Commons license. He makes money through his day job as a web developer, licensing it on music portals and selling music on Bandcamp. I personally like that model a lot (along with the music itself), which makes me much more likely to send over some money for an album on Bandcamp.

Lots of my friends are musicians. I have every sympathy for artists that can't live off their art (because that's the dream, right?). But I'd be curious how any of this would compare to record sales and artists that made money in the past. Arguably your chances of "getting heard" now are far, far greater than previous generations when you'd actually have to get out and play (or sign a deal with a label). Now you can have fans without ever leaving your bedroom (assuming you understand a little bit about marketing), you can operate completely without a label, or distributor, or manager, or anyone but yourself - if you choose.

I think the trouble is a lot of people are literally equating streams to record sales, a bit like an extension of the old MP3 argument (every download is instead of a sale, but now every stream should equate to a sale).

A rough google reckons a PRS royalty for a Radio 1 play to be about £38 for the song. The Radio 1 breakfast show is 5.13m listeners. I'd hazard a lot of the plays on Spotify are just as passive as the radio (and it's probably replaced the radio for a lot of people). If you're working to the same metrics, Spotify pays considerably more per play (again, based on some Googled numbers).

Not everyone is going to make a living from music. Even in a world of hyperconsumption there's still more music being shared than ever before and can ever be heard. And I keep seeing this argument about how awful Spotify is (and YouTube, and streaming etc etc), but personally I think it's fantastic. And I say this will a box of unsold "I was in a band once" records under my bed.

> A rough google reckons a PRS royalty for a Radio 1 play to be about £38 for the song. The Radio 1 breakfast show is 5.13m listeners. I'd hazard a lot of the plays on Spotify are just as passive as the radio (and it's probably replaced the radio for a lot of people). If you're working to the same metrics, Spotify pays considerably more per play (again, based on some Googled numbers).

I don't disagree with your whole point, but I have to point out that Radio used to be a marketing channel for a product (a record), and any profit was secondary, while Spotify streams are the end-product itself, which replaced both the marketing channel and the previous products.

Sure, it's not a precise equivalent, but then Spotify pays more - and it's (again, arguably!) easier to end up on some Spotify playlists than it was/is to get played on the the radio in any significant promotional sense. But I get your point :-)

"New media" economics have been enlightening. It's been kind of a dump on ideas of openness, and its economic consequences.

Here we are in a world where artists don't really need a "label" or whatnot, for any of the legible reasons of the past. Recording is cheap. Artists reach audiences themselves (or via algorithm). No one needs to front a million dollars to press records or print books. The digital version of cable channels, or broadcast licenses are basically free and unlimited.

In theory, it's totally open. Musicians can record music. Get it to audiences. DIY talk radio. DIY TV shows. It's popular.

Obviously, monopolies control all the distribution channels... but I don't think the money problems stem from this.

The problem is that a sufficiently open (economically) system does not generate much cash. Producers are commodified, their power totally diluted.

The only way to make money is cutting exclusive deals with strategic advantage for a monopoly, aspiring monopoly. That serial show which will covert netflix users to amazon. The half dozen podcasts who cut a deal with spotify to help them "own" podcasting. The Beatles or Metallica, holding out for something similar.

It's not a (simple) Competition Problem either. Yes, being open means more competition, but some still find large audiences.

Youtube's ad sharing, spotify's streaming royalties, etc. These all pay pennies (or less) on the dollar like-4-like to old media. X number of viewers on TV can support a professional TV show. The same viewers and the same show on youtube cannot. The actual economic mechanics are different, but openness results predictably regardless.

Not a professional musician, but I have some friends with some success in the industry.

I don't think any professional popular musicians expect to make money from streaming. They seem to make their money from (pre-COVID) performances or from "sync deals," which is basically when you license music for an ad/show/movie/etc.

I really wish Deezer's user-centric payment system would get traction. It would apportion royalties based on a subscriber's listening instead of all plays across all subscribers. https://www.deezer.com/ucps

Most of the data I've seen around music streaming and revenue still applies the out-dated mindset about plays. In the past, an album on CD sold for ~15 dollars. With that, a purchaser owned unlimited plays as well as the ability to copy the CD.

Now, with streaming, 1 play is nothing more than 1 play. Sure, the argument that a musician used to make more off of 1 CD sale than they currently make off of streaming, but I'm not understanding where this perceived value is from? If I only stream 1 song, off of 1 album, I would assume that's worth less than a single cent to the musician.

Most musicians don't make money selling their music - this has always and will always be true. 80% of musicians make less than 200 a year, but compared to pre-streaming tech, would they have made more?

The number of musicians who earn zero is even larger still.

Larger than the number that earns less than 200 quid?

Less than 200 pounds already covers those who earn zero.

I’m not sure that’s true. I don’t think it takes much. I made a baby sushing album and that’s net me around $70/year.

I made it to help put our daughter to sleep. My wife and I got really tired and it helped to have a recording. I thought that others might find it useful, apparently it does.

Maybe it’s just the utility that brings in listeners, but it’s literally just shushing.

From the article:

>The figures come from a survey of members belonging to songwriters’ body The Ivors Academy and the Musicians’ Union

Combined membership of the two organizations is around 32,000 [0][1] dues-paying members in the UK. We can safely assume the survey response rate was not 100%.

I believe that most musicians make little to nothing from streaming. I would be shocked if this survey data was representative of professional musicians more broadly.

[0] https://en.m.wikipedia.org/wiki/The_Ivors_Academy

[1] https://en.m.wikipedia.org/wiki/Musicians'_Union_(United_Kin...

It seems like art consumption doesn't keep up with population growth, especially for art like music. Twice the population doesn't need twice the songs, so more people leads to fewer music jobs per capita. That alone is going to make it harder and harder to make it as an artist. Exponential population growth is probably making it exponentially harder to compete. I really feel for these super impacted fields everyone wants in on.

That probably applies to our field eventually too. You don't need twice the google workforce to serve twice the population. Hopefully by the time it's relevant to us, population growth isn't particularly exponential.

And a ton of books through publishers probably earn in the four figures range. (Independently published probably less on average.)

It's really hard to earn a good living directly based on anything along these lines.

How much did they earn from their music prior to streaming?

Musician for most isn't a job that sustains your livelihood, to speak the truth. Most musicians takes it a passion driven side gig besides their regular day job.

Much more - see my post elsewhere on here... for me it's 10% of what I was getting when sales were a thing.

I put myself through college largely by playing in clubs and bars on the east coast.

Because the change happened so slowly, many people don't appreciate exactly how streaming killed musician's incomes.

For the most part, they were cover bands, and we never made much money at the door. Most of our income came from selling $15 CDs to drunk patrons who were having a great time. Live music isn't as popular as it used to be, but the move to MP3 and streaming took away the impulse purchase that made so many local bands profitable.

Reminds me of what Joe Bonamassa said a year ago: https://youtu.be/JJERw-JSVO4

The current music industry model is not sustainable. It was barely sustainable before the current system but now it's well and truly dead, and with the inability to make money by performing live at the moment, it seems nobody would ever make a living wage from being a musician.

The problem is that on the small scale you are one of hundreds maybe thousands of on average equally good musicians that are producing songs that can be copied and distributed ad infinitum, why exactly is there an expectation that this should be worth significant sums of money?

Performances of some form are potentially more unique and engaging for an audience and potentially provide more opportunities for monetisation if that's the desire.

Imagine if 20 / 30 years ago when MP3 was first going mainstream the music industry had, instead of suing Napster, just bought them out and turned the whole thing into a subscription music service.

Back then it cost £4 to buy ONE SONG (RIP Woolworths). I’d have signed up to £20+ a month for unlimited music even at 2005 prices.

Instead they let everyone get used to the idea music could be free so Spotify had to price incredibly low to compete. Hence, crap money for artists.

In 2017 Forgotify[0] had playlists with songs that had 0 plays on Spotify. It was 4 millions songs or about 10% of Spotify's 2017 catalogue.

[0] https://www.zmonline.com/the-latest/spotify-releases-playlis...

This article is too thin, details are almost non-existent. We need some kind of reference numbers or artist names to really understand what this means. Who sits at that £200 mark? Are we talking bands with 200 die hard fans I've never heard of? A band who was popular in the 80s but almost unknown now? What about a band like Cake who have a few hits and actively tour?

> The vast majority of musicians earn less than £200 a year from music streaming platforms

This is no surprise and also corresponds to what you can expect if you're a member of a copyright collecting society as a "normal" (i.e. not super famous) musician.

I have had this discussion again and again with my musician friends who still think they can live as musicians from copyrights. Just have a look at an annual report like e.g. https://www.suisa.ch/de/suisa/publikationen/geschaeftsberich.... I did a detailed analysis some years ago and found that the probability for a decent living from copyright income is < 0.1%; in comparison the probability of being seriously injured in a traffic accident in Switzerland is > 0.2%. The personnel expenses of the collecting society are roughly equal to the amount paid to the composers and musicians. For the given number of full-time positions, this results in an average annual salary of over 100,000 Swiss francs. A musician therefore earns considerably more when working as a clerk for the collecting society than when working as a musician. What an irony. It is not without reason that most of the musicians I know work as music teachers in permanent positions.

I'm curious how much content these artists produce on the platforms. That is, what percent of the content on the platform is produced by these artists rather than simply how many artists there are.

I thought this was a more interesting takeaway from the article--

> 92 per cent of respondents said that less than five per cent of their earnings came from streaming last year

Spotify's total revenue is around 8bln/year. It's a bit hard to establish how many musicians are active on Spotify, but the sparse info on the web suggests that it's at least a million. Those 2 numbers tell you enough if you're want to make a living from music and are not already famous.

That's just the business model of streaming—unlike labels, there is no cross-subsidization (e.g., a more popular artist "paying for" an obscure critically acclaimed artist who doesn't sell well). You're incentivized to get plays, which ultimately gets everyone to converge.

It's going to be really tough for the "middle class" of independents—whether you're in content creation or apps. But if you use streaming platforms purely as a way to get discovered, and build direct relationships with your audience, you can price and sell your own stuff. No more $0.006 per stream or whatever. (https://qz.com/1507361/mariah-careys-record-breaking-day-sho...)

That requires self-reliance, which is tough, but will be worth the payoff. I write more about it here: https://herbertlui.net/own-your-marketing-own-your-income/

Ryan Leslie is a good example of this—took his music of Spotify and went direct to audience, sold fewer albums but made more money. https://shift.newco.co/2017/03/10/ryan-leslie-shifts-the-con...

Increasing more relevant: Derek Sivers writes the way to be happy while being creative is to keep a good, steady, easy, full-time job and to create just for its own sake: https://sive.rs/balance

Without a definition of what counts as a musician on Spotify, and how hard it is to be considered one, these numbers are useless.

By simply increasing the difficulty of uploading your music to Spotify, they could easily make that 82% a 40%. Or by letting anyone upload anything, they could make it a 98%.

Covid-19 obviously impacted festivals and touring which makes up most of the income for smaller musicians.

I'd like to see, in turn, how much the average musician makes a year from Bandcamp sales.

I used to make $100 a day singing on the subway in NYC. Live and in person is the way to go.

Pardon me but I'd pay for some peace and quiet on my commute. In Europe, so much as a loud phone call, let alone playing music on loud, is generally considered rude. Is that different in NYC?

I don't think anyone experiences quiet in Manhattan.

Doing it on the platform is generally considered acceptable by all; doing it on the train leads to mixed responses, but NYers just kind of accept it, despite any muttering under their breath.

There's a metric ton of street performers (during the better times) in throughfares of most European cities. So no, not that different.

From my experience the more touristy cities might have a handful (e.g. Amsterdam yes, most other Dutch cities no), so for me it's way more rare than "a metric ton" in "most European cities", but maybe I haven't been in the right places, I wouldn't know if it's more common around the mediterranean for example.

Also, on the street it's much louder and more bustling around than in a subway (or on a train or even in a bus for that matter).

shrug I see them everywhere. Hague, Nuremberg, Minsk (again in better times)… and certainly here in Norwegian cities.

And since there's a lot more life going on on Manhattan than in any European city it's nothing surprising.

Wow that sucks. Live living in a cemetery. Is it like that in all of Europe?

In NYC I heard two dudes screaming at each other over walking into each other by accident then yell at each other over who was going to back down from the fight then yell at each other over all apologies about who was more sorry about the whole incident then actually fought over who was going to buy lunch for all the drama

I miss NYC all the time

Man, you would hate Germany with a passion. Ask someone on the street here about the noise laws and whether it's even legal to put your bin outside after 10pm or mow the grass on Sundays :-)

I love quiet so much more. The only downside is that without a constant background noise, every little thing will disturb you, but when the choice is between hearing what I want to hear and hearing background noise to cover other annoying things... the former, please.

If it's an "outdated model" the first questions to ask are about what came before that model.

How much did 80% of musicians make in 1990 from radio? And from all sources, for that matter?

It seems very dishonest to have a discussion without those numbers.

> If it's an "outdated model" the first questions to ask are about what came before that model.

How does what came before have anything to do with the issue? Wouldn't for an “outdated model” the question be “what new model exists that has rendered the old one obsolete?”, not “what existed before this model?”

I mean, unless it was proposed to be “outdated” specifically in a two-model alternating cycle.

The vast majority of musicians have nearly no one playing their music.

It's pretty standard artists have to do other day jobs to sustain, there's simply no way to change the public's taste, it's not a problem that can be solved.

If we want artists to earn more where do we think that money is going to come from?

People aren't going to be willing to double their streaming bill - just not going to happen.

In the past people spent more on music than they do today. Extracting more rent from consumers is definitely still an option on the table.

[0] https://www.visualcapitalist.com/music-industry-sales/

But I don't think music delivers the same value it used to. It's competing with other things. People compare to things like Netflix, and they have fatigue with how many services they need to pay for. It doesn't matter what they used to pay. And people are poorer now than they used to be! They're not going to pay more now.

Household incomes are at an all time high, even after adjusting for inflation [0]. I disagree that music doesn't deliver the same that it used to: music is one of the great joys of being alive, as essential to mankind as food and water. The value of being able to instantly stream hundreds of millions of songs on demand is a significant service improvement compared to the CD days, where you had to go to a store to shop for music and could only discover new music based on the radio or a friend's recommendation.

[0] https://www.pewsocialtrends.org/2020/01/09/trends-in-income-...

> as essential to mankind as food and water

I think we all know this is nonsense. I've got a couple of friends who never listen to any music. I don't have any friends who never eat or drink.

When the pandemic is over, there is going to be a lot of pent-up demand for live entertainment.

It has been this way for a long time, including selling albums. Musicians and singers make money by performing. The real money is made by song writers.

That's why I like buying mp3s/flacs from bands. They may not make much off me but at least the money is headed to the band, largely.

How much were they making from cd sales before?

This is one reason why I still buy CDs. I know that a far bigger proportion of my money will be going to my favorite artists.

Does it? I'm not really asking for sources, but more if you ever looked that up or if it's an assumption. Not saying it's an unreasonable assumption, just wondering whether I should be doing the same or if I should look into it first. Because afaik record labels still get the vast majority of cd sales whereas concerts and merch is where it's at to help the artist.

It does if you buy the CDs (or MP3s) directly from the artist!

If the artist makes and sells the CD themselves, it could be close to 100%. This old article from 2013, says a typical figure for major labels is 13%: https://www.bbc.co.uk/news/magazine-23840744

How many times would I have to play an album on iTunes or Spotify before the artist received the same contribution? A thousand times? This source suggests so: https://soundcharts.com/blog/music-streaming-rates-payouts

Since I have limited space, I use Bandcamp and buy digital releases. They take 10-15%[1], which leaves quite a lot to the artists.

[1]: https://bandcamp.com/pricing

Why don't the musicians get together and make their own streaming service where they get more of the revenue?

I guess they're not Apple or Google with instant access to a huge number of users. Bandcamp is a place where, as far as I know, it's very artist-oriented, but how many people use that compared to the established services?

The network effect is a bitch, is what I assume the problem is here.

I think this was the idea behind tidal https://en.wikipedia.org/wiki/Tidal_(service)

Because the issue isn't the skim. It's that there's only so much money to spread around in a world where "everyone" expects to get access to all the world's music for $10/month.

Services like Bandcamp are working on a similar premise to that, but it's stuck in a bit of a catch-22. They need a lot of cash to sign licensing deals with the sort of big ticket artists that attract the numbers of mainstream customers they need to have that amount of cash. They have carved themselves out a nice niche as an artist-friendly music store, but their path towards competing with companies like Apple for the mainstream is about as uphill as it gets. Bandcamp isn't exactly a streaming service, but it's the same battle to be fought.

Because nobody will sign up for that and they'll get zero.

People don't sign up to Spotify for the mentioned 80%, and if you include the mainstream music then you have the exact same problem with different branding

Is this like Amazon though where 80% of books and authors are basically unknown amateurs?

This is a stupid metric. Maybe 80% of artists don't earn much because nobody wants to listen to them.

A better metric is how much artists are paid per stream. If it's the same for everyone then I don't really see how you can complain. If big artists get sweetheart deals then that is an issue.

Spotify pays based on popularity not streams. This means people who exclusively listen to one genre of music might have little or none of their money go to the artists they like.

Streaming could be good but as it is it's just piracy without the RIAA fighting it.

Do you have a source for this?

This is well known. They pay out based on percentage of total plays rather than percentage of a given user's plays.

If a band has exactly one fan total who only listens to them instead of getting whatever is left of that person's fees after the platform cut the band will get almost nothing, despite commanding 100% of one person's attention.

There is some advocacy around this that explains it better: http://subscribershare.com/

Oh let me also describe it the other way.

Let's say there are two total users of a service, you and I for the purpose of this example. You listen to your favorite band one time per month, I listen to my favorite band twice. My favorite band gets 2/3 while yours gets 1/3.

Similar situations across a lot of platforms. Just look at apps

Alternative headline: “80% of musicians aren’t good”

That's a sign of excess supply vs demand

80/20 rule?

I would say it’s probably almost exactly the same situation for AppStore developers.

I wonder if 20% of musicians make 80% of the streaming revenue.

The pareto principle rears it's ugly head!

Shouldn't wealthy musicians, mainy of whom claim to be socialist or at least progressive, redistribute their wealth to the poorer musicians?

If there was an easy and definitive way to become rich, everyone would do it.

Be born rich. Most people don't hit that genetic lottery though.

I was going to say, that isn't genetic, but then realized it kind of is. Maybe saying family lottery might be more accurate.

Can't find it now but I remember an article talking about how to get rich like Bill Gates that started off with "pick better parents".

https://philip.greenspun.com/bg/

Why don’t artists just release music under different names? E.g. an artist who only made $200 could create 5,000 different variations and now be making $100,000 which is awesome.

Don't have the foggiest idea what you're talking about. Payouts go a lot lower than $200, all the way down to $0.00 in fact.

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