How Good is Spotify for Indie Musicians? (Not Good)

Agreed. Not to mention you can make some seriously sweet profits selling merch at shows ($25 T-shirts, $0.25 stickers, and every price point in between). If you want to pay the rent as a musician, you HAVE to do it by playing a lot of shows and drawing a bunch of fans with you.

speaking from experience

Except Spotify isn't for discovery and virality. What your talking about is getting people to discover music. Usually done through blogs, social media, youtube. But when your talking about a service like spotify which is really a one dimensional store for storing, putting music on your mobile device that doesn't drive merch sales or concert tickets or even fans then they should be paying there fair share to artists. Granted maybe with FB open graph integration this is changing. And of course this isn't just a Spotify problem this is a label problem (of course now they're one and the same). Anyways the question isn't whether giving your music away for free or not is a good idea -- The question is why isn't Spotify doing what they say there are there to do?... Pay artists.

As I have posted elsewhere here, as a fact-on-the-ground 'discovery' is highly over-rated and over-emphasized. It is much easier to connect with 100 people deep enough to get them to come to a show than to connect with 1,000 or 10,000.

This idea that music should and can function like spam email doesn't actually work in the real world.

I suppose for a musician, taking the leap of faith from cash-in-hand to maybe-cash-down-the-road is a big one. Even if ultimately it might pay off. It's a pretty fundamental transition between business models.

Edit: Also forgot to mention an important distinction in my point, which maybe wasn't clear enough: I will definitely put my music on Spotify eventually... just not at first, so I can capture a few sales that might otherwise have been lost to it.

Perhaps you don't listen to CDs, but lots of people still do. My experience is that for performers on Dan's level, at least a third of their income from concerts comes from CD sales.

Of course, I've no idea how Spotify would affect that one way or the other. If most of those buyers bought the CD despite it being on Spotify, no harm done...

The long tail exists for the user. For the content provider it is a myth. The long tail rewards platforms that deliver the content, not those that participate in it.

An example from the world of books:

http://www.baekdal.com/opinion/the-myth-of-the-99-cent-book/

I like a lot of what you say in this - especially the last sentence. Out of curiosity, though, does anyone have numbers on the "spread the word" free model? I'd love to see some hard evidence (it that's even possible to collect) that it works.

A lot of people are essentially saying "focusing on album sales to the exclusion of free streaming is shortsighted" -- but how do we know that's true, aside from an intuitive gut reaction? Are tour revenues for Spotify artists increasing? Are more people going to gigs? There must be numbers somewhere.

I should also note that a large percentage of tour revenues are from album sales; I don't know to what extent Spotify is cannibalizing those. So it's true that tour revenue is probably the number one income source, but don't forget how important physical merch sales are on those tours.

Some facts on the ground here are just wrong - although the intuition feels correct: "The bigger the audience you have the more you can make from live shows, which is your staple income unless you're the Rolling Stones, Sting, the Beatles, etc."

As someone who has been in the business I can tell you that touring is very expensive and complicated - especially when you get into the middle-zone for a band where they want to tour regionally rather than just play out in their home town. Touring has become more competitive for bands and listeners-attention as well. Even for bands with small ambitions the amount of so-called 'fans' is often uselessly misleading because you can get a false sense of how committed a 'fan' is and how many true fans you actually have.

On the higher end, take an artist like Imogen Heap - who has a huge, cult following, has had some hits on the radio, won a Grammy, has a very lean production situation, and plays out by herself. That sounds like the perfect situation in the modern scenario - but she decided not to tour after her last Grammy-winning album because it was too expensive.

Touring does not in any way solve any of the problems of people not paying for music.

As far as streaming services being viewed as a means of discovery and creation - that benefit is for the listener and not the artist. There is a hugely compelling argument to be made that the enormous and chronic amount of choice actually prevents people from forming deeper relations to things.

To give one example, drawn from an Economist article maybe 5 months back - in a British supermarket shoppers were given a choice between a table with 6 jams to try or 25 jams to try. In either case, anyone who tried jams was given a coupon for the jam of their choice. Many more people stopped by the table with 25 jams, but the redemption rates were hugely different: 30% for the those who stopped by the table with 6 and 3% for those who stopped by the table with 25.

One can debate it many ways, but there can be no denying that the range of choice and access has fundamentally changed how a consumer relates to the possibilities in their environment. I deal directly with plenty of indie bands: exposure hardly matters because it does not equal attention. That's what boosters of the free-model don't appreciate. Things that people get for free are assigned less attention, less care than things they have to decide, and pay for, and own. That's the bitter truth. If you want a fan's attention, inspire them to pay for something - and not .30 for a download, but $10 for an album.

My counsel to young bands is to try and do just that - charge real money and make real product. Then at least you know where you stand. Chugging along on a illusion of fandom by getting people to 'like' you and stream your music for free is a lesson in futility.

Spotify is more like a search engine for music. It's a nice thing for the user, but truly meaningless for an artist. The new people making it big are doing so in spite of things like Spotify, not because of them - and that hardly makes Spotify qualifiy as an asset/savior in my book.

Think about it: 1 million spins on Spotify would gross you $2000 - which is a small budget to produce a truly professional single track. 20 million spins would throw off enough money to give you the budget [$40,000] that was granted to low-end rap acts in the late 90s for an album-length release - not counting promotion of any sort of course.

Consider that 20% of our mythical 20 million spins were actual iTunes dloads instead of Spotify listens. A band - even one on a major label - would earn well over $300,000 - and from a single track.

No matter how adroit the magical thinking the truth is the same as it has always been: sales = money.

sorry, the $1 per stream is referring to Concert Window's royalty to artists (the artists get $1 per webcast ticket sold). Then as for Spotify, which is separate, I had originally thought that Spotify paid 1 cent to the artist/record label per stream, but in actuality it's a little under $0.002.

It is a ridiculously short sighted analysis but the point is that the thousand bucks you cited is likely to be a fraction of that if anyone can go listen to the album whenever they want for free. There are plenty of ways to market your music without making it pointless for anyone to purchase it.

Well, a lot of new media companies, including Grooveshark, have made exactly that argument. It might work for larger artists with a built-in fanbase, which makes virality easier to achieve since it'll start with some sharing momentum. But for indie artists with very small fanbases (I'm talking hundreds of fans, not thousands), having your music available for free doesn't do as much for you. The fans who would have bought your album will now listen for free and not buy it, and nobody else has heard of you. Plus, explosive virality will be harder to achieve - in general - with such a small number of people to begin with.

Again, I'm sure Spotify pays out a significant amount to the record labels and major artists, but I'm talking here solely from the perspective of a small indie musician with a, say, 200 person fanbase. In that case I don't think your argument makes sense.

Some quick math: One million (1,000,000) streams comes out to $2,000 for the artist.

Helps give perspective to the artist's deal in numbers we can actually comprehend.

I don't know if this is it, but it's very similar: http://www.informationisbeautiful.net/2010/how-much-do-music...

Linked from the OP