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Comment by kennywinker | Hacker News Reader

Those numbers are shocking. $0.00029 per streamed song. I just back-of-the-enveloped my iTunes library, and with 8649 plays, it's worth $2.51 on Spotify.

That's disgusting, considering the value I've gotten from it.

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"Derek, this is your manager. Let's start with the good news: your royalty check this month has a LOT of zeros..."

I'm not arguing that what Spotify pays artists is reasonable, but what many fail to understand is that streaming is very different from buying. I don't own the songs I listen to on Spotify thus pricing must be different. And I listen to a lot of music I would normally not buy making it more similar to radio in many ways.

I'd buy an argument like that for pandora, where you can't control play order or exactly what you listen to, but come on. Spotify is a total substitution for purchase: listen to pretty much whatever you want in the order you want as many times as you want up to and including 24x7. The $5/mo subscription gives you most even moderately popular music you want for the price of 4-5 cds, with shipping, per year. So obviously spotify shouldn't be forking out $.70 per track per play, but hearing things like artists like Jons Hopkins getting the price of a cd for 90 thousand plays (ie if a song is 5 minutes long listening to it for three hundred and twelve days) is far far too low. [1] I don't know how to set the right rate, but this isn't it...

[1] http://news.ycombinator.com/item?id=3293892

Does "owning" a song makes any sense in the digital world, or is it a relic of the physical album days?

Even besides the licensing/ownership fact (you have always purchased a license to listen to the music privately), I bet there's more music released in a given day than hours in that day. I keep thinking that the model where you can just listen to whatever you want for a flat flee makes a lot more sense in this universe.

You NEVER "own" the songs you buy. You only "own" the right of listening to those songs whenever you want.

So how is "owning" a CD any different from Spotify?

Also, the value of a song diminishes the more you listen to it. Seriously, even if you love a song, put it on repeat for a day and you probably won't listen to it again for a couple of months.

So it's not like Spotify customers will one day buy the music, unless they really have very specific needs, like being somewhere with a bad or expensive Internet connection, but if you subscribed to Spotify in the first place then I doubt that.

If you don't think it's different, wait for publishers to pull albums from Spotify. This happens all the time. poof gone. Does this happen to your CDs?

> So how is "owning" a CD any different from Spotify?

Because if you quit Spotify you lose all the music. The CD you can keep for life without having to pay $10 every month.

One thing to bear in mind is that you are comparing the price of buying something to a one-off rental. The rental business has always paid poorly, with retailers only purchasing a single copy and reusing it (i.e. they pay once, then rent it until it becomes too damaged). At least with Spotify, they hopefully pay each time.

I'd completely agree. However, imagine the next news item is that Spotify increases their prices 5 fold, to pay out more to the artists. The comments would be full of "there is no way it should cost that much" and "I'm not paying that"!

That's the real problem: Spotify seems to be anchoring prices at an unsustainably low level. Netflix streaming is trying to do the same to video, but Hollywood is resisting.

(Although some are claiming that Spotify's pricing is similar to the amount that the average person used to spend on CDs, so why are labels getting less from Spotify than they did from CDs/iTunes?)

> Netflix streaming is trying to do the same to video

Think about the prices for a moment. Suppose you pay $7.99 per month for streaming. According to some recent estimates (http://blog.nielsen.com/nielsenwire/online_mobile/january-20...), the average Netflix customer watches 11 hours of streaming video per month. That means about $0.73 per hour of video watched. Seems relatively reasonable. Even for users who watch several times that many hours, it still seems reasonable.

You don't really own songs you buy on iTunes, either. Try reselling them...

Your definition of ownership is outdated. (I’m also not sure what you are responding to.)

Weird, my comment really seems to be attached to the wrong parent. Sorry about that.

If you mean my definition is outdated, you mean that there is no such thing as ownership in the future anymore? Ownership is outdated?

With the music I buy in the iTMS I can do most of the things I can do with a CD I buy in a store somewhere. Some things I can’t do. That’s all. It’s not dramatic.

So you don't really own songs you buy on iTunes the same way you own CDs.

So then you don’t.

Does it matter, though? I don’t think so. It’s pretty clear what you can and cannot do as compared to CDs. It’s a non-issue.

Ah, the new, up-to-date definition of ownership: it's almost like the old ownership, and it's pretty clear what you can and cannot do. It's not dramatic, it's a non-issue, just don't hold it that way and everything will work.

Again: Does that matter? What – specifically – is the problem?

Ignore the word ownership and its definition for a second: Is the amount of stuff you can do with files compared to CDs really a problem? It’s clear to me what I can and cannot do, I can make an informed decision and I really can’t understand people who think that what they give up with files is a problem.

They might personally prefer to – for example – re-sell their music. That’s fine. I don’t need that. But that’s a question about taste, not any kind of earth shattering problem.

Spotify has paid for the catalogs of the major record labels by giving out a lot of their stock. AFAIK, there never was a whole lot of cash involved.

From the record labels' point of view, Spotify is excellent. Artists tend to have contracts where their paycheck is related to the number of records sold and times their songs are played in the radio. Some countries even have laws to protect the artists in this. However, there is no mention of online streaming, so artists don't really have to be compensated for that.

When you pay for or listen to ads in Spotify, you're mostly giving the money to the record labels and pretty much nothing to the artist. That money is going to spent for lobbying for laws that will life-support the deprecated business model of the record companies. Of course this is a bit exaggerated but in my eyes paying for Spotify is kinda like supporting SOPA.

Although some are claiming that Spotify's pricing is similar to the amount that the average person used to spend on CDs, so why are labels getting less from Spotify than they did from CDs/iTunes

I'm guessing one of the reasons is that iTunes is simply more popular right now, plus it's different demographics and so on.

Spotify's great promise to labels is that once it will become ubiquitous (see: Facebook integration) they (labels) will get money from more people than ever, kids that grow up getting used to free music (YouTube, torrents, etc.) included. There's even a slim chance it will change some habits of these people (for example: convince them to pay some). Who knows, I spend more on music now than before I became a subscriber so maybe there is some ground to that pledge.

One thing that amazes me though is the ability to download an album (= make a playlist out of it and turn "available off-line" option on) in Spotify's mobile apps. Thought labels will strongly oppose that - it nullifies a potential need to buy music completely. Even though I love this feature I sometimes feel it's too much (considering how little artists get from that).

Spotify and Netflix are very different. The vast majority of Spotify users do not opt for the premium service. If most or all did pay it really wouldn't be an issue. It would even be considered a blessing for the music industry.

With Netflix, you have to pay to access the content.

No, Spotify has enough money to pay all their artists.

They do not want to, the money you pay to spotify goes to the owners of spotify which are the recording labels and other stock holders. Spotify is not artist-owned, the money will always go to the stock holders and owners before they reach the artist.

The artists could easily get paid 5x, completely out of the label's share, without affecting prices. Labels screw over artists, end of story.

I thought that these small numbers everyone is quoting from Spotify are not so accurate. I thought there is more data related to artist compensation which isn't public knowledge, so this shouldn't be taken at face value?

Derek seems to imply that major labels get paid more, but it seems this particular small number is accurate for this particular independent artist.

Other known numbers, mostly sourced from wikipedia [1]

"There are indie labels that, as opposed to the majors and Merlin members, receive no advance, receive no minimum per stream and only get a 50% share of ad revenue on a pro-rata basis (which so far has amounted to next to nothing)." Spotify also bought off the labels by giving them a bunch of shares (18%?) Better yet, even if an artist is with a major label, apparently the revenues labels might realize from share sales are non attributable to artists and hence stay purely with the labels. This seems like utter bullshit but there you have it. [2]

A swedish band Magnus Uggla -- apparently well established -- said "after six months on the site he'd earned 'what a mediocre busker could earn in a day'" [2]

A Norwegian record label called Racing Junior earned "NOK 19 ($3.00 USD) after their artists had been streamed over 55,100 times" [1] (english) [3] (swedish)

British musician Jons Hopkins earned 8 pounds ($12.48 at current rates) for 90k plays, or $0.00013 per play [4,5]. Even if a normal purchaser played a song 250 times, (9e4/250 * 0.7) = $252, or 20 times more money.

All in all, pretty appalling. I'm a Spotify subscriber but I'm going to have to rethink it.

[1] http://en.wikipedia.org/wiki/Spotify#Criticism

[2] http://www.guardian.co.uk/music/musicblog/2009/aug/17/major-...

[3] http://www.dagbladet.no/2009/08/11/kultur/musikk/spotify/mus...

[4] https://twitter.com/#!/Jon_Hopkins_/status/13714775382964633...

[5] http://news.ycombinator.com/item?id=3293641

My friend and I with a guitar made $200 every 6 hours busking in nyc, and we're amateurs. Online pennies for offline dollars...

Here's a link from the OP saying Spotify royalties really are as bad as he's saying:

http://matthewebel.com/2011/07/20/spotify-let-the-money-pour...

Hm, Matthew Ebel is being paid around $.0015 per stream while Derek Webb is getting $0.00029 per stream. I wonder why there is such a large difference? Maybe Matthew's main streamers are from Spotify paid accounts?

I heard a recent song writers music playing at the grocery the other day, how much per play do you think the artist gets for that? It would make a more accurate metric than trying to compare CD sales.

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