In big tech’s dystopia, cat videos earn millions while real artists beg for tips
theguardian.com
theguardian.com
This is quite disingenuous. Spotify pays out about 75% [1] of their revenue as royalties. That's better than for example the App store.
You can make the argument that they give too much to non-paying users or that subscriptions are too cheap, but comparing total revenue with payout per stream is utter nonsense.
[1] https://www.statista.com/statistics/370618/spotifys-cost-of-...
All the money from a small percentage of people or a small percentage of money from everyone is the same.
Yes.
> All the money from a small percentage of people or a small percentage of money from everyone is the same.
Only if you assume that people with lots of hours listen to the same mix of artists as people with few to medium hours. If accounts that are left on all day have a bias, then they will steer everyone's money in the direction of that bias.
That's the big assumption, which is most likely false. Even though it's not allowed, entities like gyms or bars have the top40 on repeat throughout the day.
Although there is a problem that "money paid per user per month is fixed", "per-stream payout is fixed", and "money allocated to recipients matches in proportion to plays" cannot all be true at the same time.
Are people asking for (in the limit case) paying £10 to spotify for a month and listening to exactly one track once by Taylor Swift to result in a single royalty payment of X% of £10 to Taylor Swift?
Is it fixed? I thought the article gave an average per-stream payout by a simple division of royalties and number of streams.
Anyway, under this system, there are a lot of inequalities. According to official SACEM statistics, about 2/3 of their registered artists (who pay for membership) never earn a single cent every year. And in 2011, only 150 artists (less than 1%) earned over half of all redistributed revenues... then again, the amount that is being redistributed has been severely punctured by the execs/administrative types who get paid no matter what. The highest french financial authority, la Cour des Comptes, has many official reports over the years about the misbehavior of SACEM & friends and how they swindle artists through legal though dubious schemes (moving money around many orgs, each applying administrative fees until there's nothing left). So that's for "independent" artists under collective management.
Then there's artists giving away their rights to publishers/editors. They will be pressured to accept a small percentage in exchange for having their album/book/movie published "for free". But they've essentially sold their soul to the devil. If their art doesn't bring a lot of money, the publisher has essentially lost nothing. But if it does, then it's making tons of money, some of which will pay for the same kind of capitalist bloodsuckers (execs/investors), and the rest will pay more well-known artists who had a position to bargain for better contracts.
But even if your art fares well, your publisher may decide to stop publishing it, and there's absolutely nothing you can do about it. Under some jurisdictions you can bargain with the publisher to buy back your rights (that's gonna cost you some serious €€€), but under others you're simply left powerless because distributing your own production is now a violation of the publisher's copyright. How fucked up is that?
Then there's live performances. If you're a more-or-less unknown artist, all the money you're gonna make is with a live audience. But once you've sold the rights to your music, movie, or theater piece to a copyright vampire, then you have to pay them off to play your own works and you'll only retain a portion of whatever should have ended up in your pockets.
There's plenty of other aspects to consider and i'm not familiar with all of them as i'm not an artist myself, but i have enough artists in my close circles who've made the mistake of dealing with copyright, editors and such nonsense and will never do that again. I don't personally know a single artist who plays by the capitalist rules anymore because they were all fucked by the bigger fish. Now my friends all either publish free art (copyleft) or do pirate art (zero fucks given for copyright).
Taylor Swift may argue that she's entitled to a better deal since she drives traffic, similar to how Apple Stores can negotiate better rents in shopping malls.
As an example; big music aficionados might listen to 75 different bands in a month, which will mean 1% of their subscription money will go to each of them.
The large majority of music listeners though listen to 5-10 big-name artists only.
Distributing money fairly after what each premium subscriber listens too thus would end up favouring the big name artists much more than the current model they have.
I have no way of knowing whether this is true, but thought it was an interesting perspective...
Discussed at the time: https://news.ycombinator.com/item?id=25024552
Clarity edit: I mean a tipping system on top of the existing system.
I got Spotify, but it's a family plan due to my SO. I buy just about all the music from Bandcamp anyway.
Your statement is equally disingenuous. How much of that 75% ends up going to the artists?
In fact, Spotify has improved this situation, as self-publishing is now a lot more viable than 20 years ago.
https://investors.spotify.com/financials/default.aspx
https://s22.q4cdn.com/540910603/files/doc_financials/2021/q1...
Page 4:
> Revenue 2,147 1,848
> Cost of revenue 1,599 1,376
So 74%, but cost of revenue is:
Page 32:
Cost of Revenue
===============
> Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. We incur royalty costs, which we pay to certain record labels, music publishers, and other rights holders, for the right to stream music to our users. Royalties are typically calculated monthly based on the combination of a number of different elements. Generally, Premium Service royalties are based on the greater of a percentage of revenue and a per user amount. Royalties for the Ad-Supported Service are typically a percentage of relevant revenue, although certain agreements are based on the greater of a percentage of relevant revenue and an amount for each time a sound recording and musical composition is streamed. We have negotiated lower per user amounts for our lower priced subscription plans such as Family Plan, Duo Plan, and Student Plan users. In our agreements with certain record labels, the percentage of revenue used in the calculation of royalties is generally dependent upon certain targets being met. The targets can include such measures as the number of Premium Subscribers, the ratio of Ad-Supported Users to Premium Subscribers, and/or the rates of Premium Subscriber churn. In addition, royalty rates vary by country. Some of our royalty agreements require that royalty costs be paid in advance or are subject to minimum guaranteed amounts. For the majority of royalty agreements, incremental costs incurred due to un-recouped advances and minimum guarantees have not been significant to date. We also have certain so-called most favored nation royalty agreements, which require us to record additional costs if certain material contract terms are not as favorable as the terms we have agreed to with similar licensors.
> Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. Cost of revenue also includes discounted trial costs.
So assuming "predominantly" means between 50% and 60% (otherwise it would've been specified and used for marketing communications), they're spending about 44% on royalties.
The other 30% is easily "spent", rather allocated, on: "credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets"
This is in line with the "Apple spends pays twice as much royalties with Apple Music".
For example, they said they're spending 450M on google cloud in 2018-2021. So one quarter would already be 37.5M, based on only that, about 2%. Then you have the payment processing, let's say 2%. They have 5,584 employees, of which a big chunck is probably support. etc.
> Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. Cost of revenue also includes discounted trial cost
Also, Apple's App Store charges 15% for subscription, and includes most of thath.
Apple Music pays double the rate of Spotify.
While there is increased competition, it has allowed many writing voices to be heard that would have not been heard pre-internet.
That said, I understand that people like absolute ranking systems because they're reflective of what is popular.
These people fail to realize that lowering barriers to entry applies not only to them, but also to everyone else equally.
You are not stuck in traffic, you are traffic.
Thanks, I really like that quote. I'll reuse it.
[1]: https://medium.com/soundeon/what-is-the-typical-revenue-spli...
The article is raising a flag about the trend
The spotify Q1 financial statement
https://investors.spotify.com/financials/default.aspx
https://s22.q4cdn.com/540910603/files/doc_financials/2021/q1...
Page 4:
> Revenue 2,147 1,848
> Cost of revenue 1,599 1,376
So 74%, but cost of revenue is:
Page 32:
Cost of Revenue
===============
> Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. We incur royalty costs, which we pay to certain record labels, music publishers, and other rights holders, for the right to stream music to our users. Royalties are typically calculated monthly based on the combination of a number of different elements. Generally, Premium Service royalties are based on the greater of a percentage of revenue and a per user amount. Royalties for the Ad-Supported Service are typically a percentage of relevant revenue, although certain agreements are based on the greater of a percentage of relevant revenue and an amount for each time a sound recording and musical composition is streamed. We have negotiated lower per user amounts for our lower priced subscription plans such as Family Plan, Duo Plan, and Student Plan users. In our agreements with certain record labels, the percentage of revenue used in the calculation of royalties is generally dependent upon certain targets being met. The targets can include such measures as the number of Premium Subscribers, the ratio of Ad-Supported Users to Premium Subscribers, and/or the rates of Premium Subscriber churn. In addition, royalty rates vary by country. Some of our royalty agreements require that royalty costs be paid in advance or are subject to minimum guaranteed amounts. For the majority of royalty agreements, incremental costs incurred due to un-recouped advances and minimum guarantees have not been significant to date. We also have certain so-called most favored nation royalty agreements, which require us to record additional costs if certain material contract terms are not as favorable as the terms we have agreed to with similar licensors.
> Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. Cost of revenue also includes discounted trial costs.
So assuming "predominantly" means between 50% and 60% (otherwise it would've been specified and used for marketing communications), they're spending about 44% on royalties.
The other 30% is easily "spent", rather allocated, on: "credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as the amortization of podcast content assets"
This is in line with the "Apple spends pays twice as much royalties with Apple Music".
It infects rats to make them less afraid of cats. We get it from cats. Maybe cats are less afraid of us? There's data that suggest that a third of all people are infected. Perhaps these are cat lovers. Perhaps when we are infected we promote and show off our cats so that other humans get infected.
Thus cat videos and pictures on the internet are a by product of the Toxoplasma brain parasite.
Sounds like something that would be both extraordinary and easy to find a correlation if it was true, no?
https://www.scientificamerican.com/article/are-cats-responsi...
Its all internal politics. Directors, producers, money people. Without the great shows die because 'numbers' and trash keeps on coming.
Also a lot, a lot of people have terrible taste. And they stick to what they already know, even when its trash.
Nothing.
But the cat video has far more universal appeal and can make the money up in micro value per user.
I think the underlying problem is the same. People assume they don't need to support good stuff, because it's good and therefore somebody else must be supporting it already.
>Whatever their failings, the best of the organisations and companies that kept the show going – from publishers, through record labels, to old-fashioned TV channels – worked on the basis that the mainstream success of their biggest attractions would help subsidise less bankable talent, and also allow adventurous, driven people to take chances.
Hard disagree, but at least artists have the choice to disintermediate now. That's not dystopian, because the system of modern patronage from nobility isn't being razed but competed with by the tips the author already acknowledged.
https://en.wikipedia.org/wiki/List_of_most_expensive_paintin...
The best art isn't just a commodity or an object, it's an event with lasting cultural influence and impact.
A culture that stops making that kind of art - because "the markets" decree that cat videos generate higher short term returns - needs to ask itself whether that's really such a great metric for assessing real value.
It might seem shallow and pointless but it's the human impact that really makes it valuable.
You can't lift the emotions of millions with a dozen pieces of art like the Salvator Mundi and the technical mastery of it can only be appreciated by those with an understanding of art.
The closest everyday people can get is listening to the story of DaVinci, and dreaming a little.
The millions made by cat videos are a reflection that millions of people enjoy them and advertising companies are getting lots of money out of it.
Maybe a unique breed of cat would be worth millions, if they existed.
Because cats are mostly fungible[0], and easily supplied, there isn't the exclusivity that would otherwise give them a high price tag.
[0] There are rare, expensive breeds. But even there there is a limit to what will pay for basically a cat.
I think this article tries to make a complex problem into "fair/unfair" situation.
In my point of view, the "problem" is globalization itself. Everyone thought it would be the most fair thing ever. We would have access to more people and more things that were made all over the world, and we would see a boom of diversity. In reality globalization simply makes large players even larger, funneling the majority of the wealth and resources to few players.
That's why there's a handful of tech players getting-ever more wealthy. Everything compounds on a global scale, they can run businesses at loss, have access to unlimited capital, hoard every competitor, making them even more bloated and large.
Yet this is funny because within the artists industry, the exact same thing is happening. The big popular artists are getting most of the attention/wealth, probably at a scale never seen before. The Beatles have never reached so many people, and that's taking away from other artists - so it's not just cat videos. Why aren't artists complaining that other artists are taking away from them? At least radios had to manage a pool of time, now people can listen to the same artists, everyday, in a loop.
Should popular artists have a pool of time that gets empty after so many streams?
Which brings me to the point of: reach. Just because you can reach more people doesn't mean that everyone would have the interest/attention to invest their time to listen to music. Maybe the cat videos time was spent watching commercials in the 90's, or reading through a SEARS catalog in the 70's. The difference is that now it's funneled to few media companies.
So the question shouldn't be if it's offensive to have tip jars that help struggling artists, or if watching cat videos is culture decay... maybe should be, is globalization good for culture? Is globalization a fair and balanced system?
What are these things? There are many who don't want to "enrich" at all, so much as forcing their values (often their ego-centric self-worth) onto others via harassment.
If your efforts enrich the lives of others, they should be seeking you for that benefit. If that isn't the case, you either need to advertise your wares more, convince others of your values more; or, maybe rethink your initial value proposition (maybe you are creating something valuable if the market isn't agreeing).
There are a lot of caveats to this but it's such a fundamental of how capitalist societies are supposed to work (ideally, on paper, anyway) that any diligent discussion should at least address the issue. If the situation goes unaddressed, I assume ignorance or malintent.
> That's why there's a handful of tech players getting-ever more wealthy
That's the argument of tech monopolisation. An important subject, but that doesn't seem to be the issue this article's framing appears to address.
The implication of this article is that cat videos "should" get less than "real artists", for some subjective value of "real". This begs a lot of questions. But without addressing them I'll simply state: tech platforms reduce the barrier to global reach, are there are just enough competing tech platforms to be competitive (this is an issue to watch out for though) - Hence platforms such as YT (before it began actively censoring channels/videos and hence publishing vs providing its content) only make things fairer. Art has a good few decades head-start in content creation, so why are they losing a content war to youtuber amateurs? I suspect the real answer is: the most successful artists had some kind of monopoly, as such their content quality has been diverging from their audience for some time. It's a similar question to "Why so little public funding for the arts?", and "Why do the Arts need so much funding?", and "Why isn't it the Arts job to find willing funders?".
I was just stating that cat videos may get less per interaction then "real artists", the difference is the reach cat videos get that makes them earn so much.
The problem of the global tech platforms disrupting the barrier of global reach is that it's funneled to very few platforms. That's not good, it's what makes the mentioned cat videos explode and earn more, because one choice of one algorithm was enough to do so. How is that "fair" in the sense that was a low effort endeavor that got picked up and boosted to reach millions of people?
And then, like you mentioned, we're at the will of very few players and their decisions (political or not).
>Art has a good few decades head-start in content creation, so why are they losing a content war to youtuber amateurs?
Certainly there were other gatekeepers, but you never had single entities with so much reach. Distributors had to work with other distributors globally, no matter if it was for the film industry or music industry, no media alone company could reach more then a billion people and enforce their choices on everyone - which is what Youtube does in the end.
You can say that chain of players is just inefficiency and cost overhead, which is true. But also it was truly diverse. By being diverse I'm not saying it was fairer, it was just diverse and the act of competing with such small players (in comparison to Google, or Amazon, that have unlimited money) was still up for grabs.
> It's a similar question to "Why so little public funding for the arts?", and "Why do the Arts need so much funding?", and "Why isn't it the Arts job to find willing funders?".
Well some of those guys actually put some effort into things, and the majority are not trying to game a algorithm, hopping on a trend, or looking for some sort of "art-market-fit" (jesus, imagine that), they do things for the sake of expressing themselves - and this shouldn't be ruled by capitalism, much less ruled by Google or Facebook.
> How is that "fair" in the sense that was a low effort endeavour that got picked up and boosted to reach millions of people
This seems very similar to the radio/record-label issue. Whatever subpar trash band band Simon Cowell picks up gets boosted, whatever the radio channels choose to air over gate-keeped frequencies. The web is different in that such a monopoly is harder to maintain, not easier. We are still in the early days of internet media.
If cat videos are truly "low effort", then competition should be high, so expect the boost to be short lived as the competition starts to kick in. I'm actually somewhat surprised any particular cat video is able to make a lot of money still.
> which is what Youtube does in the end
YouTube won't necessarily be only game in town for long, I hope. Google rose to fame on the basis of a better search algorithm. Maybe the future of video streaming is a competitor with a better video recommendation algo?
> the majority are not trying to game a algorithm
The algo changes so much that this isn't necessarily a winning strategy.
> looking for some sort of "art-market-fit" (jesus, imagine that), they do things for the sake of expressing themselves
If you aren't ruled by capitalism, don't expect to earn as much capital. What else do you want: those ignoring the needs/signals of the market, get equally rewarded by the market? To quote:
"I write.. erotic novels. For children."
"What.."
"They're wildly unpopular."
If you're paying $10 a month to listen to music 8 hours a day, a 3 minute long song costs you $0.002 per play. And that's ignoring people sharing accounts.
Presumably Spotify's economics rely on customers who don't listen all that often - i.e. people who don't wear headphones at work.
A little less than two decades ago before HADOPI was adopted in France, a considerable share of the population/parties were defending a "global license" that would have legalized filesharing and instituted a tax on Internet access to finance arts. Basically, spotify-netflix-as-a-public-service. I'm not saying it's the best model ever, hell i'm for abolishing money entirely. I'm just pointing out alternatives were imagined and are entirely possible.
Compared to a private corporation profiting from the situation and dictating what music will/won't be available tomorrow (i used spotify before i lost some songs i loved due to their contracts expiring or whatever), such a system would be much better.
In a publicly funded version of this you just have the government deciding what will and won’t be available. Look at the existing cultural departments of national governments, they’re full of arbitrary decisions made by bureaucrats. At least with the current model, if someone comes up with a better way to get paid while giving artists and consumers a better deal they’ve got a chance of displacing the existing model, when you legislate something into existence it’s nearly impossible to renovate it.
That's not how Bittorrent works, fortunately, but i see your point. I'm not a fan of government either. I stand for the abolition of government and copyright at the same time (among other things).
I'm merely pointing out that alternative proposals do exist (most people are not aware) and it's really disgusting that a private company is making business out of people trying to access culture... and gets to decide what albums to remove at what time.
> if someone comes up with a better way to get paid while giving artists and consumers a better deal they’ve got a chance of displacing the existing model
That's not how monopoly works. In a capitalist economy, you basically need a billion euros (or at least 1% of that) on the table before you can try and maybe change something. Otherwise, other companies will not even start talks for a contract with you. See copyright mafia, telecoms/ISP mafia, large retailers mafia, social netowrks / advertisement mafia, etc... Hell, even for running a simple mail server it's so hard to reach gmail.com or outlook.com users ;)
I'm all for open content protocols and services, it's just historically reasonable that corporate solutions appear first. Once these are established, with proper shifts in copyright system, open solutions could build on their learnings.
Yes that's why i'm mostly opposed to a global license. It's broken by design because it's a capitalist proposal. Artists need to live well, but so do other folks (free software devs, cooks, etc..) so this is a problem to be solved as a whole and not to be approached for each individual branch.
> Funkwhale don't even come close to Spotify functionality
Funkwhale looks pretty cool. Need to try that out!
> it's just historically reasonable that corporate solutions appear first
I don't believe that was the case so much. I mean spotify and youtube were born as pseudo-pirate platforms where nobody cared at all about copyright until maybe 5y ago? 10y ago? They couldn't have grown at all if they played by the book (because no editor would have licensed their works to a tiny platform like theirs).
And i don't know about your local context but i know for sure here in France Bittorrent was REALLY popular, everybody was using it and that's why they passed laws like the HADOPI. They knew they couldn't control the Bittorrent network so they started to threaten people with fines so they would move to streaming platforms, to a passive consumption model where it's easier to sell them subscriptions. It's only because law enforcement went after non-profit p2p initiatives (and even for-profit ones like Napster) that platforms like Spotify could emerge at all.
I'm not sure what the morale of the story is. I'm just sure we're doing everything wrong as a society. The best artists are starving while the worst are raking millions of €€€ in. We keep producing useless hardware/software that'll be obsolete/broken by next year, and we keep on destroying our own planet so that the next generation will have to fight for drinkable water. All in all, copyright is not my biggest concern. It's just a symptom of our fucked up capitalist society.
The reality is, the software and infrastructure isn't what we pay Spotify for.
It's the licensing, and the legal work. Maybe we shouldn't have to. Maybe no one should have to. Maybe the whole copywrite system needs reworking - if if anyone had the means to do that, I would pay more than a Spotify sub (as would the many corps who don't want reform).
But until such a solution is available, and the US/world operates under the corrupt system that it does, there is only large corps capable of filling legal coffers to do so. Corrupt? yes, but it starts from the government down.
Sure, but that's precisely the problem. So-called intellectual property is a scam, like all forms of so-called private property. How come there's empty houses and people sleeping on the streets?
Noone should have to pay ANYTHING to live. Let's abolish money and government and suddenly things will be a lot easier for everyone :)
To flip this around: why should ANYONE pay for music?
Why should anyone pay for anything? The simple fact that you have to pay to live is a pretty modern invention.
> Houses (and utilities) don't build themselves.
True. It's a good thing then that some people are interested in doing that. And if there's a task that noone wants to do (washing dishes?) we can share the burden in a fair way: i'd be happy to collect trashes for my community once a year or once a month, if others do the same.
Also, while houses don't build themselves, you'll note that money doesn't build them either. It's intended as a motivational force for people to work. However people can "work" (if we can call it that) out of conviction/ideals as well.
We could collectively abolish money from one day to the next and housing would still be there, fields would still grow... Life would go on, except the capitalist bloodsuckers wouldn't know how to extract value from their wage slaves anymore.
(Also, most people would probably quit their job because it doesn't make sense or actively hurts others/nature. See David Graeber's Bullshit Jobs on this phenomenon)
> why should ANYONE pay for music?
Well as long as you pay for housing and food you probably should pay for music, too. But money doesn't make any sense to "ensure fair compensation". It does make sense to extract value from the poor to the rich in a very abstract way... it's basically "grow food for your king all year long and they'll come with soldiers and take 90% of your production" but with layers of subtlety added over the centuries.
So yeah the business model isn't enough, the fact that some very popular artists can make it work is actually the exception that proves the rule, everyone else needs funding outside of Spotify.
Who decides that?
So no. Cat videos and memes and makeup tutorials will rule the internet till the end of its days.