Comment by Slow_Hand | Hacker News Reader

Comment by Slow_Hand | Hacker News Reader

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I don't disagree with the notion that streaming services are priced too low for what we receive. As someone who watches a lot of film and television I get tremendous value from these services. As a consumer I of course prefer to pay less, but this content isn't cheap to produce and it is often risky to do so. I'm not privy to the financials of running these services, but that's my gut feeling.

At this very moment my iMessage window is open to a group chat between my business partners (who are all professionals in the music industry) about how much music has been de-valued. People are paying $10/month for Spotify and receive tremendous value. That subscription fee is simply not enough to keep Spotify and the artists afloat. If Spotify doubled their subscription cost tomorrow and it went to the artists I would gladly pay it. Unfortunately I think I may be in the minority and I don't know if casual listeners would be so sympathetic to having their subscription rates raised so dramatically.

In short, I believe we've been a little bit spoiled by the wealth of music and film that's been on offer from these services for the last decade.

The competitor is piracy. A mixture of 'too many' streaming services with unique exclusives, which is arguably already the case, or too high of prices will correspondingly drive more piracy.

In a way we're kind of regressing into the scenario that Netflix originally resolved. It sucked having to rent movies a la carte, at movie rental places that often wouldn't even have what you wanted. Now you're basically doing the same thing, except you're renting access to an exclusive catalogue instead of a single movie.

Another competitor for new music is old content. Today's popular music is popular, but the proportion of music played that's considerably older is higher than ever before. Distribution isn't a push model where radio play and what's stocked in record stores drives everything and devalues the old; people have broader tastes than before.

This means that if you try to jack prices, people will substitute existing things they have in their library much more readily.

I pay for a streaming service and watch about four hours of it a month.

We balance each other out, I think?

The Spotify subscription fee is plenty to keep good artists "afloat", at the level of a middle-class living wage. It probably isn't enough to keep all of the record label executives' yachts afloat. Thus we see more artists going independent in order to keep a larger share of the limited streaming revenue.

You're right about artists going independent to capture more value for themselves, but you're wrong about the Spotify payouts being enough for a middle-class living wage. It's nowhere close to being enough to support an artist. Streaming music is basically a loss-leader for artists these days.

1,000 streams on Spotify nets the artist $2.38 in payouts [0]. For an artist to earn $60,000/year that means that they would have to accumulate roughly 25,000,000 streams on Spotify.

And that's assuming that you're a single person with 100% of the publishing and mechanical rights to your record. If you're a band, divide that by the number of band members or songwriters. Less the productions costs, less promotional costs, less expenses for equipment, less your manager's cut, less your label's cut. It goes on and on.

[0]: https://soundcamps.com/spotify-royalties-calculator/

A year of Spotify is about what people used to pay for 8-10 cds. I don’t know many who in their twenties who bought much more. At least for me the music spend is about the same.

This is true. To the user the cost may stay the same, but the user now receives VASTLY more value for the same spend. They have a seemingly infinite pool of music to listen to. Whereas they would only have 8-10 CDs worth of music for the same amount.

At the same time, the artist are now capturing a significantly smaller fraction (think 1%) from that same pool of money. And that's being generous. It takes thousands of streaming listens of an artist for that artist to receive the equivalent of one CD purchase from back in the day.

The distribution of value and compensation is massively skewed when it comes to music streaming. Subscribers are getting tremendous upside while the creators are getting massively hosed under the existing model.

> It takes thousands of streaming listens of an artist for that artist to receive the equivalent of one CD purchase from back in the day.

In fairness, most artists didn't receive anything from a CD purchase, either, as the costs to make and promote the album are usually deducted from the artist's share of royalties. (Also, said "costs" are often inflated/charged above the label's actual cost).

It’s obvious that it’s the labels that are the problem. If the artists I listened to in a month got part of my subscription directly they would probably make a decent bit. If I listen to 8 artists maybe as much as a buck. Instead I would be surprised if they got any more that a couple of cents each.

Even if you remove the label from the equation Spotify payouts are nowhere close to being enough to support an artist.

1,000 streams on Spotify nets the artist $2.38 in payouts [0]. For an artist to earn $60,000/year that means that they would have to accumulate roughly 25,000,000 streams on Spotify.

And that's assuming that you're a single person with 100% of the publishing and mechanical rights to your record. If you're a band, divide that by the number of band members or songwriters. Less the productions costs, less promotional costs, less expenses for equipment, less your manager's cut, etc. It goes on and on.

[0]: https://soundcamps.com/spotify-royalties-calculator/

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