Spotify will end service in Uruguay due to bill requiring fair pay for artists | Hacker News Reader

Spotify will end service in Uruguay due to bill requiring fair pay for artists

mixmag.net

187 pointspseudolus331 comments

This may be an unpopular opinion but streaming music prices have to rise for artists to get a fair deal.

Current prices are an incredible bargain and only so because they don’t reflect the true value of the product.

Anything else is just trying to square the circle.

Revenue is broadly in line with what it's been: https://www.riaa.com/u-s-sales-database/

I grew up during the age of peak CD sales, and I still only bought like ten audio CDs in my life, all of them on the secondary market. I essentially didn't spend any money on music before Spotify came along. Now I spend 15 EUR every freaking month.

And it's not just piracy, although it is that, too. Before Spotify came along, I listened to music radio, and I also listened to a lot of free amateur music. And that was at a time when distribution was a challenge; now any artist can create a Bandcamp (or whatever) page in seconds and give away their work.

The entry barrier for making music is just incredibly low. I'm sure only gifted individuals can make exceptionally good music. But most music isn't exceptionally good and loads of people can make music that's good enough to have on in the background, i.e. what Spotify is being used for the vast majority of the time.

I think what may be happening is that we hear loudly and often from the mega-stars who used to comfortably earn millions from each new album release or even single release and now get lower streaming revenue. But we never hear from the hundreds of thousands of "long tail" smaller performers who previously would've earned zero within a couple years after releasing their last CD, but who now get a small but steady trickle of income from streaming. I've got dozens of songs on my Spotify playlist that the world has entirely forgotten about in terms of radio or public exposure, and the performers themselves might be middle-aged realtors or office workers by now who have entirely given up their music careers, but their songs were little earworms to me back in 2003 so I still play them occasionally. Not that the people negatively impacted don't have cause for complaint. But we're only hearing one side of the story.

They're slashing royalties to the very same long-tail artists you think you're supporting.

> A new threshold of minimum annual streams that a track must meet before it starts to generate royalties. The threshold, according to MBW, will de-monetize tracks that had previously received 0.5% of Spotify’s royalty pool.

https://www.billboard.com/pro/spotify-changing-how-pays-arti...

That's ostensibly to deter the proliferation of noise and programmatically generated junk where one "artist" might upload hundreds or thousands of tracks in the hope of getting paid due to accidental clicks and the like.

Anyway if the cutbacks only represent 0.5% of the total royalty pool, then they don't impact what's typically meant by the long tail, wherein the smaller back catalog items, in aggregate, end up being a substantial fraction of the total sales.

> I think what may be happening is that we hear loudly and often from the mega-stars who used to comfortably earn millions from each new album release or even single release and now get lower streaming revenue.

I vaguely recall that Taylor Swift took her music off Spotify over concerns for the small artists. Like doing it on behalf of them. I have my doubts about that being the reason, though...

Revenue is NOWHERE NEAR what it was - you’re neglecting to click on the graph that says “value (adjusted for inflation)”. The graph is a clear indication of an industry trying to transform itself by whatever means having been repeatedly decimated. If the entire US music industry was a company, it wouldn’t even make it into the S&P 500.

I clicked the button. It's literally within a few percent of where it was 30 years ago, adjusted for inflation. I call that broadly in line. Yes, it was much bigger in 2000, and much smaller in 2010, also bigger in 1978 and smaller in 1982.

It was never that big, in absolute economic terms. I remember Slashdot was joking 20 years ago that one of the tech companies should just buy all of it to make the RIAA shut up. I guess it's unsurprising that organized culture has an outsized reach.

It looks about 40% lower, not a few percent. I’m not denying that the recorded music industry has been totally overcome, and in some senses they’re lucky to have anything at all from Spotify, but almost everyone in society wants recorded music and the revenue side of it is dying, indeed, almost completely killed except for those at the very top of the pyramid. This hasn’t happened in the same way in other intellectual industries. It is how it is, but it’s a shame that something we all want has to be expensively done and then given away basically for free.

Might be smaller lately because what's produced nowadays is crap. Things exciting this year came from Stones and Beatles, you figure :)

We have Spotify family subscription, always listening one of us' playlist at the dinner table and almost all of it created before 2000, and most before 1990. I'm talking about one 16yo, one 11 yo and two adults.

Recently, 16yo started his A levels here in London. The whole class created a playlist with their fav songs from all genres, 70+ teenagers. Hardly 10% of it is post 2000. Kids' family backgrounds are as diverse as it gets.

There has always been a lot of crap. The reason people think it was better in the old days because most of the crap was forgotten and is not played on the oldies station.

I read somewhere that the typical “classics” station whether it be RnB, Motown, Rock, etc has a playlist of 300 songs. There were many more songs produced during the covered era

> Might be smaller lately because what's produced nowadays is crap. Things exciting this year came from Stones and Beatles, you figure

It is a matter of personal taste, curiosity and influence of people around you. There’s a lot of good music and good songs that were written in this century and in the last 10 years. However, this period of time is very small compared to the time passed since great classical music works were created. No wonder its share is small.

Sturgeon's law: 90% of everything is crap. There was lots of crap pre-2000, you just never hear it.

You're describing your bubble. In mine, young women rappers are being discovered in droves, previously on youtube and now tiktok. They don't have Death Row tier production quality, but by the time they make it to Spotify, they're putting out bangers.

It's little surprise that your nuclear family listens to such a narrow range of music. Growing up, I didn't listen to new music in the house either. We had classical, old country, ragtime, and big band -- nothing newer than 30 years ago. My parents thought everything else was noise.

Oh, and funny thing, I've recently discovered artists from the 90s that I never heard of back then. Music discovery is, in my experience, in a golden era. There's not only a huge amount of new music, but as old music makes it online, it's making it to my ears.

London must be yearning for the older times

Even if adjusted for inflation, it seems middling rather than "nowhere near what it was" and it seems to grow as well.

The 90's were an outlier IMO, because we got CD's for easy distribution but it was before the internet and especially smartphones were widely available.

Companies like Spotify and Netflix basically hinge on being more convenient than internet based piracy, radio, ad supported streaming etc.

The early CD era represented a pre-web period where people were not only making regular run rate music purchases but also replacing some amount of the vinyl they already owned. (And cassette as sibling post mentions.)

> because we got CD's for easy distribution

Not just that, but it triggered a huge rebuy of old music for the format change from cassette. That's literally never going to happen again.

>If the entire US music industry was a company, it wouldn’t even make it into the S&P 500.

Market cap =/= revenue

Ok slight miscalculation, having looked again, by revenue it would be around the size of the 250th largest company, ie the recorded music industry has the same revenues as GAP or Nordstrom. If GAP disappeared overnight, few would be impacted. If all recorded music disappeared overnight, it would be a disaster. Ok piracy then, and free music, but I think there’s a serious crisis in the production of new and innovative music, and it’s indicative that recorded music was a 20th century phenomenon.

it is not my duty to have jayz make another 100 million There are some really rich musicians and music industry people.

What are you advocating for ? More expensive streaming subscription will mostly go music labels and top musicians who are multi millionaires some hundreds of millions Taking the money from parents of school kids and average 9-5 people

No.

This assumes all artists are alike, which patently they are not. Artists that make amazing music that doesn't stream well, are pretty fucked and their revenue stream from recorded music has basically vanished.

Spotify algorithm filters these artists hard.

I call these artists peak experience artists, they make music you might listen to occasionally, perhaps even just a handful of times, but you don't listen to in the background daily / weekly / monthly.

Whereas' pre streaming to listen to it once you bought a CD for £14.99 and the label got £7 and the artist on an indie got ~£3.50. Now the artist gets <0.01p for that listen.

Huge difference and a chiling effect on the sort of music that can be made.

(I've worked for a big UK indie and currently manage musicians and have seen the trends in music distribution first hand since 1992).

Many artists who happily make Spotify friendly music do handsomely if the algorithm is generous. But many do not and can no longer have a full time career in music.

And no, live shows do not make up the shortfall. Not all artists are comfortable playing live and it's harder for artists to reach critical mass where touring is even possible / profitable.

Unless they are already wealthy, which is why you see again and again the same ilk of rich kids breaking out in music (see Fred Again, Fourtet, etc etc).

Very interesting take I can only agree with.

By any chance, would you have some free time to exchange on the matter?

I'm on the other side of the industry, and I'm trying to gain better knowledge of distribution trends nowadays.

How did these amazing artists that no one really listened to get their CD in the store?

I think there is a lot of hindsight bias here. The internet made shelf space unlimited, and artist that used to toil away in absolute obscurity now have a shot. I don't think we're talking about those who would have had a CD on the local store shelves, we're talking about those playing at random bars in their town.

They were signed by labels who also made money from the sale of those records.

Those labels are now looking for different music.

> Spotify algorithm these artists hard

or people just don’t want to listen to that music as much as you think they do, and would rather listen to Taylor Swift and Drake

Let me try and explain again, because I think you missed something.

I don’t think many people do want to listen to this music. And even fans that do might not listen very frequently.

That music might still be incredible, in the same way that any peak experience is. But by kind of by definition, peak experience is not usually everyday. (see psilocybin etc).

CDs enabled those musicians to make a living. Streams mediated by Spotify, which seems to optimise for background listening, do not.

There have always been artists who languished in obscurity. They had no chance of distribution before the internet.

That’s a great take on the background vs focused listening.

We may see the music that demands focus disappear and everything will drown in Taytay et al. loops

> Whereas' pre streaming to listen to it once you bought a CD for £14.99 and the label got £7 and the artist on an indie got ~£3.50.

I doubt any artist ever made 23% on a CD sale. The reason artists are paid peanuts now is because it's the same contracts, giving the label all the money.

Many indies offer a 50/50 net profit split. At volume the costs become quite small with CDs.

Majors usually seek to minimise royalties and have many well documented and some less well documented ways to reduce royalties by either chipping away at the headline rate with deductions or shrinking the base price.

I can corroborate this experience.

As a teenager in the 90s and a young man in the 00s, I barely bought a couple of original CDs in those decades. Most of the music I had was pirated (downloaded, or recorded from radio). I would fill my hard drive with 10s of GB of MP3s, then I'd cycle through it via Winamp. And I have no acquaintances with large music collections, unless that music was pirated.

Currently, I'm paying for a Spotify subscription AND a YouTube Premium subscription, which is way more than zero $.

Artists making money are those performing live, and filling auditoriums and stadiums with people. The kind of artists that have dedicated fans, and that make albums that become collectibles. That has always been the case.

> Revenue is broadly in line with what it's been: https://www.riaa.com/u-s-sales-database/

> I grew up during the age of peak CD sales, and I still only bought like ten audio CDs in my life, all of them on the secondary market.

This is the kind of anecdote that tries to make an example that proves the argument, but it's so wildly different from the average music consumer in the 1990s that it's completely irrelevant.

You bought 10 CDs at a 2nd hand store in your entirely life and now you pay more for Spotify. But most people were buying 10, or 20, or 30, or more CDs a year, .... and now they're paying _less_ for Spotify.

I’m willing to bet that the average poor college student I knew in school was buying at least one album a month—albeit sometimes secondhand and I probably bought a lot more than that after graduation.

The total revenue of CDs sold in 1999 (Peak CD) was $938 million.

https://www.statista.com/statistics/186772/album-shipments-i...

The best estimate for the number of adults that same year I could find was 191 million. Let’s say 200 million to include some teams.

That’s nowhere close to 10 to 20 CDs.

I can’t find a citation. But I’ve seen other places that people were spending $65 a year on music before streaming and iTunes

I believe those are US units not revenues. So depending on how you count relevant consumers that’s actually close to 10 CDs per year per person.

Which puts music purchases in the rough ballpark of streaming which is probably not coincidental.

No one makes money when I play the Funkadelic album I've owned for the past 20 years, but my SO can't make it two or three songs without an ad on Spotify.

Distribution costs are lower without, so any reduction in CD sales seem easily offset by digital sales, ads, etc.

> most people were buying 10, or 20, or 30, or more CDs a year

So most people have a collection of 100 to 300 CDs? And if you include tapes and records, the average senior owns between 300 and 1500 albums?

This seems totally delusional, I think you are in a bubble.

Yeah I mean, I wish people would illustrate their anecdotes with statistics, right? Oh wait, I did. I even alluded to the fact that I was an outlier in not buying CDs in the late nineties. But then the rest of the world got the message. And now we're spending as much on renting music as we did buying it in the eighties.

> Revenue is broadly in line with what it's been

Not if you adjust for inflation.

Not if you adjust for population growth.

Not if you adjust for growth in artists and music avaiable.

So in the end the money that goes to artists is worth maybe 10% of what it was in 1973, while serving a customer base that is 58% larger, probably much larger than that considering everybody has access now. And this money has to be split among many more artists than before, including many artists who have been dead for decades.

No, I clicked the adjust for inflation button. You do have a point re: population growth -- the per-capita spend on music is smaller than it was.

But regarding artists, you're sort of making my point: there are certainly more artists around that address essentially the whole world, as opposed to just themselves or their local area. Playing an instrument hasn't gotten easier (even that is arguable), but mastering music (at a mediocre level, maybe) has gotten easier, and distributing music has gotten way easier (presumably eventually that should affect the revenue split between labels and artists). And yes, all those artists of today are in competition with the artists of the past.

So there's certainly less money for each individual artist today, and there is more music available to me today, and I still don't have more time available to listen to much more of it.

But you do have a point regarding population growth.

> No, I clicked the adjust for inflation button.

Generally we have to adjust much more for inflation, as official inflation numbers are mostly fraudulent.

I agree with you on the cost of producing and distributing music going down, and I think it's fair to say that the creative part is easier and cheaper as well.

But don't people have more time to listen to music today when it is accessible everywhere?

I guess that's probably true. Though the Walkman and its descendants have been popular since the 80s, and music radio was very accessible and routinely running in the background in situations where people now listen to Spotify.

> Revenue is broadly in line with what it's been:

More precisely revenue has just caught up to the level it was 30 years ago

I agree and I see it with my own music habits. I do listen to Apple Music stuff all the time, but really there are a handful of artists I value personally and can recognise by name. Even today, I continue to buy their vinyl records not really for the purpose of listening but just because it's a cool way to support them outside of streaming.

It would be interesting to know how the amount (hours) of music being listened to changed over time, in comparison. With streaming and radio, it correlates in time, whereas with physical media and downloads, purchases stretch over time in relation to when you listen to them, and the revenue is decoupled from how much you listen to it.

People aren’t going to pay more so it is in fact not worth more.

I know every artist thinks their unique vision is infinitely priceless but things are actually worth what people are willing to pay for them. If you can’t convince people to hand over money for it, then it’s not worth that much.

Exactly, things are only worth what people are willing to pay for them and for a lot of people music is relatively low in the pecking order. I pay for spotify but would leave it they raise the prices.

> People aren’t going to pay more so it is in fact not worth more.

Source?

Spotify is a for-profit company and if they could raise prices without losing customers they would.

It may be that they're looking to create a monopoly and price competitors out of the market, and will raise prices (but probably not payments) when/if they succeed. Or perhaps they have already? I don't know of a real competitor to Spotify.

Edit: by real competitor, I mean one that most people will know and hence, can compete. Even monopolies like Google and Facebook have competitors that some random person I ask is likely to know about. Not sure I could say that of Tidal et al.

Supposedly. They have never made a profit.

Heck even if they did raise prices, the record labels will always get 70% of thier revenue.

Circular reasoning. You are basically arguing that for-profit companies never make mistakes, know everything,etc. Is that were true, disruption and startups wouldn't exist

I don't understand this logic. Companies aren't omniscient; they can make mistakes, they can lack some information, etc. They will not inherently make the best choices at the best time just because ... capitalism?

Well... before Spotify people learnt to get digital music outside of platforms, they can learn it again

Same with Disney, Netflix, etc.

Capitalism

That is actually not how it works, at least not in any sense that carries meaning in the real world, and that's easily verifiable be checking the counter factual: People pay more for things than they are worth all the time. For example: Marketing courses.

Where do you find the objective reference value of all things including marketing courses? Do you have a big book with the true value of everything in it?

People have different amounts of money and value things differently. $30k to me would represent a significant investment and probably not worth a single plane flight, but a billionaire might spend that to charter a jet for one flight and consider it money well spent. It’s relative.

Yikes

Artists are free to sell their music digitally on their own websites at what ever price they want then pull their music off streaming services.

I really hate it when people try to use government regulation to twist the arm of business for these types of "fair" deals.

What exactly is a "fair" deal ? It's a very complex question and almost impossible to optimise for.

I really hate when people pretend that you can just go sell your stuff on your website and that would settle the debate. Unless you're already extremely popular, not being present on streaming services is almost akin to not existing at all. Even though streaming services aren't a monopoly, as a whole they have a huge percentage of the market and what they pay out famously is very little and (at least in the case of Spotify) skewed towards the big artists.

Yes, fair is complicated, but the decision of what's fair and what isn't is something a society can take and it seems that Uruguay did take that decision. Good for them, I guess.

Is minimum wage also twisting the arm of business? How much would be fair for minimum wage?

Yes. I a way it is.

Businesses that can't afford to pay a minimum wage can't operate.

Imagine a record label/streaming service had to pay every artist or actor a minimum wage weather or not thier work generated money more than the business invested. I doubt it would be sustainable.

Also, should businessmen making less than minimum wage be compensated by the government to make ends meet?

I think trying to improve the economic situation of the poor by twisting the arms of businesses is bad.

I think the issue of poverty is a serious one and should be addressed by strengthening social safety nets & providing a form of Universal Basic Income.

> Imagine a record label/streaming service had to pay every artist or actor a minimum wage weather or not thier work generated money more than the business invested. I doubt it would be sustainable.

If it's not sustainable without exploiting the artists, then it shouldn't exist in my opinion. Either prices have to rise or something else has to happen to make things more "fair" (again, I agree that fair is a complicated term and it's hard to put a value on it). Artists aren't employed by streaming services, so the service shouldn't pay minimum wage, but setting a minimum payout or some other measure is something that can be argued for.

> Also, should businessmen making less than minimum wage be compensated by the government to make ends meet?

If the business owner makes less than minimum wage, it's ok by me. Their business, they have to find a way to make it profitable. But it shouldn't be made more profitable by exploiting the people that sustain it.

The government shouldn't compensate the business imo.

> think the issue of poverty is a serious one and should be addressed by strengthening social safety nets & providing a form of Universal Basic Income.

You are arguing against a government giving money to business owners that struggle to make ends meet, but giving UBI without minimum wage does exactly that. You subsidize businesses that don't pay a living wage that otherwise would go bankrupt.

I think things would be different if the power balance wasn't so extremely off between artists and streaming services (or employees and employers in the minimum wage example). But since power is extremely imbalanced, I argue protections should be in place.

>You are arguing against a government giving money to business owners that struggle to make ends meet, but giving UBI without minimum wage does exactly that. You subsidize businesses that don't pay a living wage that otherwise would go bankrupt.

Yes exactly. What protections and for whom? Protecting the business or protecting the customers?

Well, the market has spoken. You can no more blame anyone for artist not being able to make money than someone who majored in Ancient Chinese Art History for finding a job.

There are plenty of ways of marketing yourself outside of the streaming services - Facebook, ads, playing at live venues, giving out cards with QR codes that link to your website etc.

Rappers were famous guerrilla marketers back in the day.

There’s no such thing as fair. Whenever anyone uses that term they are just trying to obscure self-interest.

Everybody needs to eat not just CEOs

Then don’t choose to do something that people aren't willing to pay money for.

There are some jobs that people don’t have a choice but to work. Being an artist isn’t one of them.

The first problem is some people are meant to be artists, it’s what they’re good and excell at. Placing them in engineering domains won’t do anyone any justice, they’ll suck.

Second, people will consume and like and pay for what’s available to them. If their government decides that an entity like Spotify disadvantages their local artists they can simply add legislation to fix that.

I really don’t like the idea that artists should just give up because some SV types just rendered them useless. Artists are like a glue to the fabric of community, it’ll be a huge loss to have everyone doing stem instead.

If no one was going to listen them anyway, how were they loss to anyone?

With the fragmentation of media in society today, artists aren’t bringing any “community” together.

So now you’re saying the government should come in and save certain types of music? What pray tell do you want the government to do against Spotify?

And how would the government feel today if Spotify top song were NWA’s “Fuck the Police” or Ice T’s “Cop Killer”? would they support those artists?

> The first problem is some people are meant to be artists, it’s what they’re good and excell at. Placing them in engineering domains won’t do anyone any justice, they’ll suck.

How are you so sure that some ppl are "meant" to be something. What does this even mean.

What are you meant to be and how do you know?

If the problem is poverty I think the solution should be creating a proper safety net for people and offering the a Universal Basic Income.

I'm not sure how you've come to the conclusion that "artists" (who?) do not get a "fair" (how much?) deal.

I'm sorry noone wants to listen to your garage band anymore because they prefer megastars like Taylor Swift or can listen to the newest K-Pop five seconds after a song was released and uploaded, but that's globalization for you.

Sure, 200 years ago you had to listen to whoever could afford an instrument in your village - regardless of skill - but we don't inhabit that world anymore.

> megastars like Taylor Swift ... whoever could afford an instrument in your village - regardless of skill

I would not vall thr current megastars the pibbacle of skill. In fact its well known they are not chosen based on skill.

> I'm sorry noone wants to listen to your garage band anymore

That's exactly the problem. People _are_ still listening to local bands, they're just not paying them to do so.

How we're local bands making money previously? Wasn't it mostly from concerts?

I doubt the margins from records & CD sales made them a killing.

Can't speak for every case, but local concerts usually only made a bit of money when we were the ones hosting the show somewhere, inviting other bands, and selling tickets. Even then it was a bit of a gamble. More than a few lost us money.

Otherwise, if we weren't hosting, the money we were paid for playing wasn't even enough to cover band expenses (instrument maintenance, travel costs, etc). Selling merch helped. Selling LPs / EPs was usually just an attempt to make back the cost of recording them in the first place.

If the band was signed, things were different depending on their specific deal. But those bands probably don't count as just "local" anymore, at that point.

I actually don’t think they are an incredible bargain. At current prices, a single subscription is 8-10 albums a year. That is way above what I would have been buying had the world stayed on CDs.

Ive got the family subscription to Spotify. The four of us each listen to a solid 100,000 minutes of music a year for $15 a month. 400,000 minutes of entertainment for $180 is easily the best value entertainment I’ve ever seen. That’s 37 hours per dollar.

> 400,000 minutes of entertainment for $180 is easily the best value entertainment I’ve ever seen

Does nobody in the group ever repeat a song?

If yes, then that 400K is double counting (or 50x counting or however many time a song is repeated).

Depending on how much replay, at some point it becomes cheaper to just buy those CDs instead of paying for them over and over every month.

If we go with iTunes prices that’s an album and a half a month. Were you really expanding you home collection that much?

I too prefer renting this way, but I don’t think the value proposition is unbelievably good compared to owning.

I never bought music, just pirated it before switching to Spotify. But I listen to hundreds of new albums a year so yea o guess I was expanding my collection much faster than an album and a half a month.

> Were you really expanding you home collection that much?

An album and a half a month?

There are lots of people who would buy dozens of CDs a month. I know many.

So you get a vast amount more choice for the same price? That doesn’t factor into your assessment of value at all?

But you don't own the data as in you can play in different devices, the streaming service has to exist where you want the music and it has to have constant internet access. Before you could load the CD in the car and run in roads that are in no-coverage area. Also you pay for the internet access.

Not true, offline play is possible.

https://support.spotify.com/us/article/listen-offline/

For me, absolutely not. I'd rather go back to listening to the radio and not being able to decide what's playing. I currently buy two to three albums a year on Bandcamp or Amazon, the rest is YouTube.

The price of something is determined by those that are willing to pay for it. And I am a Spotify artist just over the >1000 streams mark.

Spotify (and others) are a discovery service that you happen to get some money for. You are trying to get into the algo and if people like it reads that signal and puts it out. It has NOTHING to do with fairness. If your music doesn’t connect with people then, that.

If interested. Work cost circa €600 (mostly from session drummer) and an awful amount of work from me as the producer. Am I annoyed that I may never break even? No because I am realistic about the product I am creating and how it is a pyramid scheme. But I do get to listen to it https://open.spotify.com/track/5MCvIFKabQfN7gnInX12BB?si=RzX...

Great song. C'mon downvoters, yes he snuck in a plug, but so what, let him have it.

Haha… sorry

It's me who should be sorry, I meant "let him have his day in the sun", not "have at him". Only now did I realise that it could be misunderstood.

Appreciated.

Stone him!

It’s been out for 18 months and missed the train for any success anyhow :)

As the value of reproduction falls towards zero, shouldn't the cost fall towards zero as well?

Yes. And so should the quality

No matter how much prices rise, the artist will never get a fair deal as long as they deal with labels.

On the other hand while they may get more of a percentage of the payout if they don’t deal with labels, they probably will get fewer streams without the marketing.

Streaming music unfortunately needs to be considered marketing for most artist and as a cliche as it sounds - it’s all about live performances and merchandise.

And breaking up the one true monopoly - Ticketmaster

Remove the incredibly bloated middleman aka the traditional music industry. The actual cost of distributing music has come down immensely with digital distribution and streaming.

"But they do so much more, like PR and marketing and stuff". Ironically, those who are already big get the biggest PR plus better deals than smaller artists. I don't think we need to raise Spotify prices just so Taylor swift can get even richer.

Spotify spends millions per month on lavish "creative" team salaries in NYC who do nothing but create gradient playlist covers and other low grade "design" work that is 100% unnecessary. All while they redesign and destroy their UX and product experiences every iteration. All of that money could go straight to the artists.

At least someone in their design department keeps uselessly moving things around. The latest was tucking away the desktop application's search function into the sidebar, even though the space it used to occupy is now just wasted space. It feels like they are trying to go the Netflix way where the normal usage is just consuming whatever they put in front of you. But we're probably not even supposed to use it on desktop...

I don't agree that it is unnecessary.

I think Spotify's aesthetic and design is one of the things that keeps people from moving over to other platforms.

Nobody wants to use programmer art software. And these things are more carefully considered than most people would believe.

Granted, I have this opinion about shovelling money at podcasts creators, and I'm sure someone could tell me the same. But you know, 200mill for Joe Roegan. Ugh.

They can’t demand higher prices because their main competitor, piracy, is free.

I’ve long been opposed to piracy and thought copyright laws should be more strictly enforced, for exactly this reason. Yet most people seem to balk at that idea and think they have an absolute moral right to free content. I’m not sure why.

Lots of people make quite good music for free, or are dead and no longer care if they get any money (even though in the latter case companies are fleecing listeners long after the artist has died)>

Piracy did well for a while in the CD era. There is no evidence that current prices represent a ceiling for what would work in 2023 before people would turn again to piracy.

I'll add to this as well, since it's a comment I see a lot.

I'm not convinced that people would be willing to go back to Piracy. I think the convenience of being able to listen to any song at any time immediately without having to connect your iPhone to your PC, drag the file over, get them recognised, maybe add some metadata. (I know there'll be more modern approaches to this. I don't think they'll be quite as easy as Spotify)

That's not even mentioning music discovery. Most of my music is now from Discover Weekly.

The power of convenience is definitely more a thing than I really appreciated in the Napster era. But I also don’t think people would generally subscribe to $50 per month streaming music.

Why wouldn't a modern Napster replacement a) run on your phone and b) have music discovery? Doing both P2P is only a legal challenge (as in, it is illegal), not a technical one.

Illegal things are harder to do on phones because the app stores act as enforcers in a way that desktop OS vendors don’t. Most people don’t sideload or jailbreak.

In what world would Apple allow a piracy app on their AppStore? This may change with the EU demanding other AppStores - but as of right now it would be unworkable.

Much cheaper content has pretty much been normalized and it’s much easier to make free copies of stuff than it used to be. And the money ends up taken from someone which, in music, mostly ends up being the artists.

> Current prices are an incredible bargain and only so because they don’t reflect the true value of the product.

Seems like many artists are okay with the price, that’s why they stream on Spotify.

There is no true value. That is indeed decided by the people who are willing to pay for it.

The true value of music is pretty much zero, anything someone can get for the "reproduction" of their work is a plus. Now Uruguayan musicians will get the true value for their work, when Uruguayans go to the piratebay to listen to their songs.

Nonsense, if they divided my monthly payment by hours listened they'd get about 1-2 CDs out of that every month, more than I have ever bought in my life. And they don't even have to spend any money to burn and distribute them. So they're already making more money than they would otherwise. The only issue is that the money isn't going to those who actually deserve it. Don't encourage these greedy jackals to charge even more.

Younger people buying one or two albums per month used to be extremely common. And distribution of media generally (also in the case of books) is a much smaller percentage of the costs than most people assume.

It’s worth remembering that it was different greedy jackals getting the lions’ share of money in the CD era, not the artists. Artists rarely got more than 10%.

> It’s worth remembering that it was different greedy jackals getting the lions’ share of money in the CD era, not the artists

What "different jackals". It's the same jackals who are getting the lion's share: the labels.

They do have to spend money to distribute them, servers, bandwidth, software dev, etc, aren't free.

However I agree that they shouldn't raise prices.

They're not free, but they're a hell of a lot cheaper than the cost to distribute tons of CDs all over the world taking up loads of shelf space world-wide.

And the value being delivered to you is a huge amount more than you got with 1-2 CDs a month.

But you’re not prepared to pay more for that value?

Nope. My value to my employer has also gone up tremendously thanks to technology but I'm not seeing an exponentially increased paycheck, nor are most people. Technology exists to make everyone's life's better, not to make you richer.

> Nonsense, if they divided my monthly payment by hours listened they'd get about 1-2 CDs out of that every month

How is that possible?

A new CD is around $14 and Spotify is like $12.

Artists are making plenty. It is just that the supply of artists is much higher than the demand, because lots of people want to make money playing music, but there is only so many hours a day to listen to it.

And while I get plenty value from my Spotify subscription, I also spend much more on music than I otherwise would have.

Will that work if it causes fewer people to subscribe?

Even if it's still too cheap, then they still need to split the money equally, and not just not pay small artists.

Spotify take 70% of their revenue and distribute it split by stream count. I honestly fail to see what's "unfair" about that

They put all the streams in one pool and then split from there. Popular artists get almost all of it.

When you spend $10 or whatever on streaming, you'd expect $7 to be split between the artists you listen to, but it's not. Instead almost all of it goes to the big artists anyway because in the big streams pool the small artists you listen to have a tiny proportion of listens, even if you exclusively listened to them.

This gets worse when you consider all those shops/cafes/etc with Spotify's top charts playing on repeat. They may be a small percentage of users, but they're an outsized proportion of streams, and almost exclusively big artists.

This is the way it is because big artists have big name labels, and those labels are the only ones who can negotiate, so the deal ends up favoring the big artists/labels.

This is definitely not how most consumers would expect it to all work, and therefore "unfair" seems like a reasonable term to use.

The "pool all streams" model doesn't necessarily favor big artists, it favors artists that are listened to by people that stream a lot of music.

For example, consider a bimodal population of 1000 people that listen 10 times to a popular artist (for a total of 10,000 streams) and 10 people that listen 1000 times to a small artist (for an identical total of 10,000 streams). In the "pool all streams" model, both artists get paid the same, while in a "split per user" model, the popular artist gets 100x the payout of the small artist.

An interesting question then is whether big or small artists are disproportionaly listened to by people that stream a lot. I haven't seen any data on it, but intuitively it wouldn't surprise me if it's the latter case.

You're right that it also favours artists that are listened to by people that stream a lot of music, but it does favour big artists too. Big artists can make up their numbers by lots of streams from few users, few streams from lots of users, or both.

Small artists tend to get a lot of streams from very few users, and lose out, so this suggests that earnings are more correlated to unique listeners than to average listens per user.

If with lose out you mean that it's not financially sustainable for them, then it's not at all clear to me that's caused by the way Spotify splits revenue, instead of Spotify just being too cheap for users to make streaming viable. Spotify takes in less than five bucks per Premium user per month, so after subtracting costs you need to quite a bit of listeners to make a living, even if Spotify shares it payout per user.

If with lose out you mean that Spotify pays out less per stream to small artists as opposed to big artists, then that's not the claim made in the parent comment nor one I've been able to find any evidence for.

My understanding is that the amount of money spent on music by consumers has dramatically increased in the streaming age. It's not clear to me that Spotify only passing on ~half after fees is any different to a CD bought in a shop that pays rent and needs manufacturing, physical distribution, etc.

I'm fairly sure this is not about Spotify being too cheap, it's that the revenue distribution skewed in the transition from CDs to streaming in favour of popular artists.

> "They put all the streams in one pool and then split from there. Popular artists get almost all of it."

Like they should, mostly because they drive Spotify subscriptions. It's fair because there is a strong correlation between popularity and work, coupled with talent.

> When you spend $10 or whatever on streaming, you'd expect $7 to be split between the artists you listen to, but it's not.

Even if they'd distribute your subscription to your favorite artists, the total revenue for those artists and their share would still be mostly the same. Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to, would those numbers be any different, and not by much.

> This is the way it is because big artists have big name labels.

Economies of scale probably apply. Like they should. ;-)

Talented artists can often sign with big labels. And isn't it wonderful that in 2023 you can publish your work, on Spotify and elsewhere, without having to sign with a big label?

> they drive Spotify subscriptions

There is no reason to believe this is true - I can download all the main artists in 30 minutes. Its the niche ones that I enjoy discpvering and wouldnt bother to download

> there is a strong correlation between popularity and work, coupled with talent.

Even stronger correlation between marketing spending and popularity

> Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to,

This is waay too disrespectfull

I think he’s using degenerate in the mathematical sense.

Tidal (spotify competitor) takes 2 euro and gives 'em to the artist you've listened to the most. But the rest of the money is probably all going to the big ones as you explained.

Just saying this because it is so weird. Like, hell yeah I sure hope my money goes to the people that I listen to why is this a thing??

> and gives 'em to the artist you've listened to the most

This seems like a way to sound popular without actually solving the problem. IT sounds like it would help "yay my favourite artist gets lots of money!" but when you model it out I'd expect quite similar outcomes – most of your money is still distributed in the way Spotify do, and often your top artist might still be one of the popular ones, and small artists aren't going to be the top of many people's listening.

> They put all the streams in one pool and then split from there. Popular artists get almost all of it.

... but that's because popular artists account for almost all the streams, right? I don't think a per-user split is any fairer, it's just different, and there's no clear evidence on whether there'd be less of a gap between big and small artists with a user-centric split.

What am I missing?

You'd think it should still be fair because money is supposed to be fungible.

So if Artist 1 gets 99% plays, and artist 2 gets 1% plays, then if you split the 70% of revenue at end of month by 99/1 , that should be fair, right?

I'm probably missing something important. Is there a source for the actual formula or so?

Users U1 and U2 have a the same subscription, and $10 of the fee they pay will be distributed to artists.

User U1 listens to tracks from artist A1 ten times.

User U2 listens to tracks from artist A2 190 times.

The $20 that U1 and U2 have paid are distributed to artists according to number of songs streamed. Artist A1 gets $1, and artist A2 gets $19.

It's counter intuitive that U1 effectively pays $9 to A2, without having listened to their songs even once.

The counter is also true that A1 gets money from people who have no idea A1 even exists. It's hard to say if one method is better or worse for the smaller artist. Basically, is it better to get a bigger piece of a much smaller pie or smaller piece of a much bigger pie. Without the data it's hard to know.

EDIT

I'll also add that the big name artists have value beyond the number of streams. A platform without Taylor Swift will have less overall users, less money for the royalty pool, less money for platform development, etc...

An interesting thought idea would be to create a streaming platform which only has artists outside the top..50? and see how it does.

Meanwhile U2-U99999 pay money towards A1 without having listened to them

I tried to pick a simple scenario to make it easy to see the faulty model, and assume that this version of Spotify has exactly two users and a catalog of exactly two artists.

The imbalance remains even if you scale it up. Artists that are listened to by users that listen to less than the average number of streams are underpaid in relation to the revenue they generate for Spotify.

If I listen to 10 songs in a month all by artist 2 and you listen to 1000 songs by artist 1, should my subscription money all go to artist 2 or should it 'subsidise' your listening to artist 1. That is the core question.

Basically do you put all the money in a pot and then split it, or do you treat each subscriber as a unit and split their subscription fee just among the music they listen to.

If I listen to artist 2 only I'd like all my money to go to artist 2, regardless of how popular artist 1 is.

That's how it worked with CDs: I buy the band I like and they get whatever pennies the mafia leaves them. But the pennies go from me to the band I like and to them only, not some $BIGPOPSTAR instead that I never listened to.

Let's say you pay $10 and I pay $10, you listen to 200 songs by Simply Red, while I listen to 50 songs by A-ha.

Spotify takes $14 (70%) of our money and divides it by 250, this means that Simply Red gets 80% of $20 or $11,20 and A-ha gets $2,80.

The unfair part is that my money got to pay for an artist I never listened to. Why not my share moved to A-ha?

> 80% of $20

Should of course be 80% of $14, $11,20 is still correct though.

Spotify charges a flat monthly fee to their customers, so the income per stream varies widely: Someone who listens to only one album a month is providing more income per stream to Spotify than someone who leaves it running as background 24/7, but the artist that recorded that one album doesn't get a proportional share of the income generated.

This is something twitch-style subscriptions get largely right.

> you'd expect

I don't. I expect that when I pay for a streaming service, as soon as the money is in their account all bets are off and no insight is given.

So such a generalisation of what people expect doesn't hold up for consumer products I'd say. I wouldn't be surprised if most customers don't even think about it at all.

I mean, a more fair way would be to split each subscriber's bill by the artists _they_ listened to. That would favor small / local artists more.

There were multiple responses questioning how this was different, so I'll respond here:

- 2 users, A and B, each pay $10/month

- User A listens to 20 Taylor Swift songs

- User B listens to 5 Radiohead songs

- Spotify gets a 30% cut

Currently:

- Spotify gets $6

- Taylor Swift gets $11.20

- Radiohead gets $2.80

If each subscriber's bill was split separately:

- Spotify gets $6

- Taylor Swift gets $7

- Radiohead gets $7

So this change would benefit artists that less active Spotify users listen to.

Right now the less active users are paying to support the listening of the most active users.

Personally this would make me feel like my money is more directly supporting the artists I care about.

Why is everyone ignoring the user side? It's not that there are equal users and a Taylor Swift person just listens more, there are millions of more users listening to Taylor Swift. Radiohead could actually do better with the much larger user base Swift brings. Without more data, it's hard to know.

I was going to make an example of what if restaurants used the Spotify model and how people would hate it because they'd be paying for other people's tables but I guess that's buffets and all you can eat sushi places are like. Not exactly shining examples of quality for the end user though.

> - Spotify gets a 30% cut

This is where you're wrong..

1. The article literally says ‘ “Spotify already pays nearly 70% of every dollar it generates from music to the record labels and publishers that own the rights for music, and represent and pay artists and songwriters," it continues.’

2. It’s a simplified example for explanatory purposes

Sure, that's the general narrative of spotify.. But it's false. It's more like half of that 70%.

There's a reason Spotify is ending their service in Uruguay, and it's not because they're enough.

I don’t think that would necessarily favor small artists. That would just favor artists who are listened to by people who don’t use Spotify a lot.

Right now someone who only streams a few songs gets a very small “vote” (assuming pay is per stream). That would make it so that everyone had the same “voting” power. But I doubt there’s much correlation between people who use Spotify less and small artists. In fact that’s probably a negative correlation if anything, and this could end up hurting local artists.

I'm not sure about spotify, but I have seen this problem with Netflix: I'm an adult paying full for my Netflix subscription and for that price I would love to have a few great and expensive movies every month for my age group.

But what I usually see is lots of movies made for teens who are binge watching Netflix even though they are paying the same. Netflix has some public presentations on their algorithm and from the presentations it looks like they are optimizing for watches without weighting by subscription revenue per watch.

Sorry, I’m failing to see the difference between this and what actually happens. They currently take 70% of their revenue and split it across artists by stream, and what I’m reading is that you’re proposing is that we take each subscriber’s revenue (presumably less some profit factor - say, 30%) and split it by the artists they stream. What am I missing?

Fwiw, the actual Spotify math is a bit more complicated than just splitting by streams - I.e., https://www.theverge.com/2023/11/21/23971616/spotify-royalti...

It's different because if you imagine Spotify only had 2 users, Alice and Bob, and Alice listens to Indie Band X 10 times a month, and Bob listens to Megastar Y 10,000 times in a month, Y would receive almost all of the artist revenue in the current model, but in the model that GP is proposing, both artists would make the same.

Essentially A's money is going towards Y, even though she never listed to Y.

(I'm not expressing an opinion on which of these I prefer)

It can be a huge difference. Say this month I only listen to a completely unknown artist. I am the only person listening (to make the calculation easy). I've listened to 10 of his songs and this is everything I've heard this month.

Now if my 7$ are distributed to all artists I've listened to this artist will now receive 7$. If my 7$ is thrown in a global pool and split by global stream counts this artist gets almost nothing.

Of course this is a extreme example but it should illustrate why this can matter.

> If my 7$ is thrown in a global pool and split by global stream counts this artist gets almost nothing.

Not by definition. If you generate more streams this month than the average user, your streams are a larger fraction of the stream counts than your 7$ is of the revenue pool, and this artist will get paid more than if he only got your 7$.

Splitting the revenue per-user instead of per-stream can certainly make a huge difference, but switching to per-user instead of per-stream benefits artists with listeners that generate a below-average amount of streams per month, regardless of their absolute stream numbers.

Their current split favors big artists. 90% of the music I listen to is jazz and classic, and if I was on Spotify (I use Qobuz instead), 90% of my subscription (minus Spotify's share) wouldn't go to these artists, instead most of it would go to the most popular artists on Spotify. That's not fair, I am de facto subsidizing the biggest artists, even if I don't listen to them, while the artists I like receive less.

And there's the fact that the payment per stream is low on Spotify compared to Qobuz or Tidal.

If I'm listening to only Primus for a month basically none of my subscription goes to Primus.

It’s the weighting. If you listen to very little music, but 1 artist, your $10 (in that scenario) would go to them.

Instead, your listening is not weighted in any special way so it goes into the global pot of money and hours listened and gets diluted by the people listening more.

Alice pays 10$ per month and play (only) a thousand times a song of Madonna each month Bob pays 10$ per month and play (only) a hundred times a song of Queen each month

Currently Madonna will get 1000/1100 of artist's share => 10/11 x 70% x 20 = 12,73$ While Queen will get 100/1100 => 1/11 x 70% x 20 = 1.27$

With a per subscriber split => Queen and Madonna will get 7$

Right now there is an incentive for artists to create shorter songs so they get more stream = more revenue

Not sure how this favors small/local artists. Most people I know who listen to small/local artists listen to much more music than those who listen to big pop artists. That means the current system actually favors the local artists since their listeners have an outsize “vote” when all streams are bundled together.

Is there any reason to believe big artist listeners on average stream more songs per month?

A better way would be for streams to interoperate with a copyright clearance mechanism where, when an artist opts out of the regular stream users still can validate they own a copy and get access through the stream. I have a library of saved songs I never hear on Pandora, and often my favorite artists and songs get dropped leaving a rather bland experience over the long haul.

But in terms of unit economics, the bigger artists/labels (or the artists that bring more users) are responsible for funding the entire platform, no?

In other words: A small artist can _bring_ users to the platform, fair enough, but the platform that gives access to other artists and enables that needs to take the bigger share.

>are responsible for funding the entire platform, no?

No, they all are. I wouldn't be a subscriber and I doubt many others would be if they only had the "top" artists that "are responsible for funding the entire platform".

Go through your playlist for a minute and find how many artists aren't "the big ones" and ask yourself if you'd use the platform if the small artists weren't included. The whole point of spotify is ALL music, so ALL music is important, surely?

Articulating a bit more in depth: Spotify it’s a multi sided marketplace where on the artist side will have a very big power law where the big labels (that has a catalog power) brings most of the users.

What sustain the economics on the Spotify is its catalog that is a composition of the labels catalog + long tail artists and their podcasts also.

When users goes to the Spotify, they are paying not to support their favourite artist but to be able to access the platform, that occasionally will have their long tail artists.

> The whole point of spotify is ALL music, so ALL music is important, surely?

Not necessarily. Catalog + Network effects + Marketplace is important.

What you’re describing in your argument is that “since you’re in the platform due to the artist, it’s fair that this artist receives the 70% of your money”. The flaw here is that this artist is benefiting of a marketplace and all its infrastructure and distribution without paying and the whole point of the platform is to give access to its catalog.

Think on the Spotify price as some kind of “optionality fee”.

No, users are funding the platform not artists. If someone doesn’t listen to major artists then revenue from them shouldn’t go to said creators.

Spotify however wants to maximize its cut and so has incentives to shift money from less popular artists if it can entice major labels to its platform. This has absolutely nothing to do with what’s fair, it’s simply about profit maximization and reducing the risks of competing platforms.

> If someone doesn’t listen to major artists then revenue from them shouldn’t go to said creators.

Well I do not have the numbers here, but I would argue that this is definitely not the case in reality.

> Spotify however wants to maximize its cut and so has incentives to shift money from less popular artists if it can entice major labels to its platform

It’s the other way around, because the platform has competing interests: Spotify wants to have the labels to sell an “optionality” to the users (I.e. get the money from subs) but in terms of reproduction/execution Spotify wants to reproduce the maximum of podcasts and/or long tail artists because in those 2 cases Spotify does not spend a single penny.

The labels has a very high bargaining power over Spotify due to its catalog, so as expected this is the biggest expenditure.

That’s one of the reasons why Spotify is desperately pushing podcasts like crazy.

> this is definitely not the case in reality.

Agreed.

Major labels have leverage which they use to get a larger slice of that 70% than they would otherwise make in a ‘fair’ split.

This is what happens already, isn't it?

No. If you listen to only a single artist for a month, your payment is still split the same way everyone else’s payment is, by total streamed numbers.

It sounds better if they artist got your entire monthly payment (after payment processors and Spotify’s fee), but probably a nightmare for accountants.

I don't see how that would be different.

Do artists have a contract with Spotify or with their labels? If it's with the labels, Spotify pays the labels and they give to the artists what they agreed upon, possibly an unfairly low amount of money but contracts are contracts.

The Uruguay parliament should regulate the contracts between their local artists and the labels. Some of them will ban Uruguay artists but some of them, maybe local ones, will intercept the money no matter what.

Or Spotify makes deals with individual artists, but there is a long and thin tail of them.

Small indie artists will have contracts with Spotify. Larger artists with labels will have contracts with their labels, who will have contracts with Spotify. As you suspected, the labels typically take a ridiculous cut of streaming revenue.

> Small indie artists will have contracts with Spotify.

They won't. They will have contracts with distributors: https://artists.spotify.com/providers

That's false information.. Spotify does NOT distribute 70% of their revenue.

As per their latest financial statement ( https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3... ):

  Revenue:         3357
  Cost of revenue: 2472

> Cost of revenue consists predominantly of royalty and distribution costs related to content streaming.

> Cost of revenue also includes the cost of podcast content assets (both produced and licensed)

> 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.

So all operational costs is included in that "70%", including: infrastructure, payment fees, etc. etc.

A breakdown:

  217 committed Google Cloud Platform per quarter (based on 4344 in 5 years)
  105 for amortization of content assets (podcasts they bought)
   30 for some content write-off
  102 "minimum royalty" for licensed content (not the regular artists), (based on (2124-83) in 5 years)

  100 my estimate for app store fees, assuming 15% fees for 20% of the users
   67 my estimate for ca. 2% creditcard fees
    ? streaming
    ? facility
    ? support software + employees
    ? equipment, software, etc
    ? refunds etc
    ? free spotify for employees

So a total of AT LEAST 723 is not related to paying out royalties. (2472-723)/3357

They're paying less than 52%. My estimate would be between 35% and 40%

Those revenue and cost of revenue figures blend together different things. Their contracts with music distributors (recordings) + statutory rates for music publishers (compositions) = ~70% of the revenue pool from advertisers and subscribers.

However, podcasts work differently, both on the revenue and cost side, and appears to be mixed in. Additionally, Spotify sells optional marketing programs (ads within Spotify, for example) which I assume are included in revenue. So it's hard to draw the right conclusion just from the summary numbers.

They need to at least split it by stream time. It’s non-sensical to have a 2 minute pop song be paid the same as a 14 minute classical song. This has weird off effects like pop stars making shorter and shorter songs so they get played more often, which causes less ability to concentrate for extended periods of time in the young people that listen to it.

I suppose the argument wouldn't be about how their revenue is distributed, rather that they should be charging more for their subscription (which is, in my opinion, insanely cheap). They're able to keep it that cheap because they're underpaying artists.

Yep, the unfairness of streaming starts when the money has left Spotify.

My subscription money ends up going to subsidise super popular artists I never listen to, rather that the artists I actually do listen to.

"Spotify already pays nearly 70% of every dollar it generates from music to the record labels and publishers", yet musicians still get paid incredibly bad. Maybe if the only way of making your business model sustainable is by underpaying artists, your business is just not sustainable.

artists sign the deals with the labels, who license it to spotify and the other streaming services?

The problem isn't that spotify isn't paying for the content, the problem is that artists sign away the rights to their content?

Is spotify the baddie here?

Yes, artists have the wonderful choice of being able to sign for one of three labels, with no meaningful distinction between the deals any of them offer, because that's just how oligopolies roll. And they collude^Whave deals with spotify.

Maybe spotify and the labels suck?

https://www.promarket.org/2022/10/03/why-streaming-doesnt-pa...

They could independently release through Spotify if they wanted to. They're not forced to sign to labels. And even if they were, that's not Spotify's problem.

Getting big in music requires a lot of money and connections that I assume labels make intentionally difficult to access outside of them

And what would you have Spotify do in this situation? Sign artists directly? And draw the ire of those three labels who will immediately pull all their music from the service?

I don't think there is anything Spotify can do themselves

...which is why legislation like the Uruguay bill is a good thing, and important.

True, good point. famously never exploitative music contracts. I don't think I've ever heard of a famous artist being taken advantage of via "deals".

I hear this all the time

Indie artists are all on Spotify too. Neil young is basically the one one who isn’t at this point

There is no shortage of artists.

Note: the parent changed their comment

yeah, just get a better paying job!

Right - I'm confused how the record labels get out of this with zero criticism.

Yes, it's an industry problem. Spotify is just the latest and nastiest incarnation.

Or maybe being an artist is an unsustainable career for most.

Considering Spotify has never made a profit in its history, they're in good company.

Quite possibly. Here's what irks me: no one promises businesses/entrepreneurs a right to earn money doing what you want. You find a market to serve and use leverage to extract a price for your service. You don't find your market and leverage, you don't make money. Lord knows I've made and lost plenty.

There's at least a sizeable minority that doesn't believe this applies to professions, especially creative ones. That effort or talent or belief mean you're entitled to make a living at some thing. I'm sorry to everyone who invested 20 years in their promising celloist career but I just don't support that notion.

> no one promises businesses/entrepreneurs a right to earn money doing what you want.

I dont know if that's true anymore. It seems that investors are happy to make founders incredibly rich well before the company even shows a hint of profitability. Daniel Ek being a billionaire in spite of never turning a profit isn't in line with business orthodoxy.

With creative professionals, they might get a fat advance from their record label, but it'll be clawed back with studio fees, tour logistics and managerial fees.

For every entrepreneur who gets rich off mooching from vc, 10000 are reading your comment with despair. Most people never get any funding to begin with. Not so different I would say.

Apple's App Store pays out 70% of every dollar to app developers, yet most apps make nothing. It's less about the 70%, and more that infinite shelf space and finite human attention leads to a lot of ignored products.

Labels take 50-90% of the royalties money, depending how big the artist is. Huge artists can have their own sweetheart deals, or their own labels, but 50-90% of a cut to the label is pretty usual.

> Maybe if the only way of making your business model sustainable is by underpaying artists

Spotify pays 70% of its revenue to music labels... but its Spotify's fault that this money never reaches the artists?

More like 40% instead of 70%

We can't know for sure because we don't know the exact contracts.

Forbes has an overview, but the numbers mostly come from Spotify: https://www.forbes.com/sites/marisadellatto/2022/03/24/spoti...

You can look up cost of revenue (which is predominantly royalties) in their financials: https://investors.spotify.com/financials/default.aspx

I did already. See my comments.. it’s about half of 70% of revenue.

The comments I saw were you just claiming it's half of the 70%.

According to 2022 annual statement, audit section, page F-3

--- start quote ---

For the year ended December 31, 2022, the Company's cost of revenue was €8,801 million. As of December 31, 2022, trade payables and accrued fees to rights holders was €588 million and €1,665 million, respectively. As explained in Note 2 of the consolidated financial statements, cost of revenue and rights holder liabilities consist predominantly of royalty and distribution costs related to content streaming.

--- end quote ---

- total cost $8.9 billion

of that:

- trade payables $0.59 billion

- fees to rights holders $1.67 billion

The rest (~7 billion aka 78%) is royalties and cost of distribution.

Unless you can argue and show that cost of distribution is over $2-3 billion, only then can you claim that only half of that 70% is going to the labels.

Artists should stop giving Spotify streaming rights then. And then I'll pirate all their songs and they'll get zilch.

Amazing reasoning. Let's hope not everyone in our industry will also think the same, otherwise we're pretty much doomed :)

Can we please stop the lies about Spotify being the goodie two shoes of royalties? The information is false. Apple pays a LOT more to artists.

They both pay approximately the same for premium subscribers, and Apple's trial period pays approximately the same as Spotify's ad supported model. They're both trying to drive premium subscriptions, which make both them and rightsholders more money, but using different strategies to get there

Is there a service that actually gives MP3 downloads? Call me old fashioned but I'll happily pay for a service that actually gives me MP3 files that I can download and keep offline.

MP3 isn’t as popular due to its inherent poor quality but the iTunes Store (not Apple Music) still gives you non-DRMed AAC files (I don’t believe any lossless files are available that way).

MP3 is fine and still by far the most common format people are using.

It’s okay for non-demanding music but even at high bit-rates there are types of sound (e.g. cymbals) which it can’t reproduce well. Smaller, better sounding files are usually going to win and indeed they have for the most common ways people listen to music.

>even at high bit-rates there are types of sound

Isn't V0 MP3 basically indistinguishable from lossless, per a bunch of abx tests from the guys at hydrogenaudio (surprisingly even slightly better than CBR 320k)? Sure aac can achieve perceptual transparency at lower bitrate, but compressed 320k is still a lot cheaper storage-wise than lossless, and if you're limited to what's available then it doesn't make sense to turn it down.

Not for all types of sound: I mentioned one of the common problems with sounds which ramp up sharply, which is not something VBR can solve. AAC also has pre-echo issues (all DCT-based formats do) but the designed was improved to reduce them since this was one of the known problems with MP3 which you couldn’t just throw bandwidth at.

My larger point was simply that most services use AAC now because it saves them money, fits more music on your phone, and has better sound quality. MP3 is good enough for a lot of things but there’s no point in supporting two formats when both are widely supported and one of them is better across the board.

Is there a way to download the tracks purchased from iTunes Store from an iPhone?

I don’t believe so but haven’t poked around the website. On macOS they’re stored in the music folder.

Bandcamp

and when something isn't on there: Junodownload, Qobuz, Bleep, etc.

> Is there a service that actually gives MP3 downloads?

YouTube with youtube-dl [1] or NewPipe [2].

[1] https://github.com/ytdl-org/youtube-dl

[2] https://newpipe.net/

Well.. yes but don't re-encode audio from Youtube to MP3, that's adding further quality loss to already not-great quality files. Download AAC or OPUS or whatever it's serving now.

Bandcamp?

Bandcamp, iTunes, Beatport, there's an absolute ton of them.

Amazon still sells MP3s

Beatport is the most well known one among DJs

Maybe there is a market for a "patreon for musicians". A platform that distributes your music to all streaming platforms but doesn't steal the rights from you. And additionally lets fans subscribe monthly for favorite arists (like patreon) for early access to music and discount to concerts and merch. IMO the patreon model is so good to lift artists out of poverty if they provide value to a small number of people without them having to loose all their creations to some publisher they signed off to in the begining.

Maybe if myspace didn't kill itself, it could have been it.

You can get all your music onto all streaming platforms without giving up any rights for about $20/year. The Patreon part, presumably you could use Patreon itself for this?

This sounds like Bandcamp.

I would pay double for my spotify subscription if it meant better artist pay. Truly my favorite and most-used app.

Would be great if there was transparency to the user, e.g. the bottom line amount of pay distributed to artists from your listening per billing period.

Also they should let internet radios on there and do the same because I have some smaller ones I listen to that don't support premium (higher quality/no ads) streams. All under the precondition they don't destroy indie internet radio culture along the way.

They don't have insight into what the actual artist gets. Spotify pays distributors and labels, who have their own contracts with artists.

It would raise too many questions like "why did most of my money go to artists I never listened to in the first place" and Spotify does not want you to be aware of that.

Streaming is speedrunning cable TV economics.

>I would pay double for my spotify subscription if it meant better artist pay.

I doubt most people would be willing to do the same, however. So, an expensive Spotify would lose to cheaper alternatives.

But the crux of the matter is that most artists are willing to work for pennies; either for the small chance of future success or simply because they like doing it (it's just a hobby for them). There's an oversupply of "good enough" talent, undercutting everyone else (except the top 0.01% who are already rich and famous).

Better artist pay means paying $60 for a vinyl LP at a merch booth, or $50 for a T-shirt.

If you paid double for your current subscription, that would just put more money into the pockets of the biggest artists on the platform.

You can just sign up for two spotify accounts if you want to do that...

> I would pay double for my spotify subscription if it meant better artist pay.

In the end its labels who pay the artists, not Spotify.

Spotify makes it very easy to donate to artists. I believe 100% of the donation goes to them or their label

So would I. RN I'm listening to an old playlist I hadn't touched in 8 years, and it's making my heart fall over. Family plan in particular is ridiculously cheap ... though in fairness ALL artistic content is compared to when I was growing up

I suspect buying your favourite artists merch gets them a bigger cut, if you want to help out more.

I gave up on Spotify after the Neil Young debacle. I've tried Deezer and Qobuz both really weren't as good as Spotify they lacked the range of songs and creating playlists was really awkward -- any other alternatives people would recommend?

I've decided to go mostly offline. Bandcamp purchases, ripping CD's from charity shops, etc... all going into a local media server.

I use NTS radio for on the go stuff and discovering new music. I pay for their membership which is very reasonable.

Same, I've went back to Bandcamp and buying CDs (used and new) and I rip them to my storage. I also upload them to my Airsonic server. I use the Substreamer Android app to then listen on the move.

I get discovery via Youtube and some friends, but it's way less than before with Spotify. I don't mind it though, as I've always tended to listen the same artists over and over again instead of new ones.

Considering that the Airsonic server also hosts bunch of other stuff for me, I think that the cost is similar to the 12$/month cost of Spotify (6$/month + buying 5 CDs per year). Also I get to own my bought music.

Do you listen to music on your phone? If so, watch OS and app are you using?

The bandcamp app is great. You get 2-3 free streams of any album, plus an enormous catalogue of radio shows to discover new music through. It's really reinvigorated my passion for music.

Once you've listened to an album a couple of times, you have to pay for it and then you get unlimited streams.

If there's an artist that isn't on bandcamp (many artists on major labels aren't) then I use plexamp. The monthly bill for that server has effectively replaced my streaming bill.

I run navidrome on my Pi4 at home, and Wireguard on the Pi so my Android phone is always connected to home (I have a fixed IP but a DDNS would also work). On my phone I use subtracks: https://github.com/austinried/subtracks/releases

Not very often, trying to wear headphones less generally. At the moment though that's done with Spotify and NTS radio apps. I might mirror my music library onto the phone though. I was also thinking of moving my music library onto a server and streaming it from there, not sure with which software yet.

Not OP, but I absolutely adored Airsonic-Advanced and DSub from F-Droid. Caching, streaming, quality-adjustment (FLAC on wifi, lower quality ogg on data), adding music, and scrobbling all worked amazingly well. Would very highly recommend, and I have yet to find anything better.

For me: Android with Symfonium, streaming (or locally cached) from my Jellyfin server.

I listen to net radio as well, NTS, Rinse FM, Dandelion Radio give a good mix (UK based at least).

I have a Spotify subscription and it is great for the depth of the catalogue and playing your favourite music when you get the itch, but algorithmic playlists suck. Humans do discovery much better, and just leaving radio playing broadens your taste.

YouTube Premium for both YouTube Music and ad-free YouTube without caring for any adblocking hoops? I've been considering it. Their family deal shares price with Spotify Family here and it's much better value. Some people also claim that it offers better sound quality despite similar bitrates than Spotify. Besides, more automated mixes (even an offline mix), better recommendations, and plenty of music videos and good music video discovery.

What pisses me off about YT is their music and videos share the same playlists. So if you import your Spotify to ytm you get a bunch of music playlists in your yt. I wish it was separate.

I use Tidal, mostly to support an underdog, though I'm not sure how much that reflects reality nowdays..

However, they are in the process of adding better APIs for developers to use, so at least that's a plus in my books: https://github.com/orgs/tidal-music/discussions/categories/i...

The default recommendations were pretty hip-hop-based for me, though, but nowadays it's better. I also subscribe to di.fm, which probably tells a bit about my music taste.

Wasn’t Tidal owned by Sprint? (And apparently it’s now owned by Jack Dorsey.) Isn’t that like supporting Zune for being an “underdog”, despite it being owned by Microsoft?

TIL :), though Block only acquired the majority of it at 2021, so relatively short time ago.

Well, people bought Windows Phones probably to avoid buying Android or Apple phones, so I guess it's still the same?

I've been using Qobuz (along with my own Navidrome instance) for the past year. The depth of music in some genres seems pretty good, and seems to have all the mainstream artists, but once you get past them in indie/pop/rock genres the gaps in the catalog really start to show. I've reached out to some artists, and no one seems quite clear why their releases don't appear in Qobuz when they appear in all of the competition. Unfortunately, none of the competition makes lossless streaming available (and I'm not counting Tidal's MQA, even if it was available on Linux).

When I joined they had some social features, and searching for user created playlists seems possible. The last couple of times I've tried I've only gotten Qobuz's official playlists in search results. I've had to make do with syncing playlists from Spotify with Soundiiz.

When combined with how inaccurate the metadata is (including the lack of ability to report the inaccurate metadata) and the lack of any new features in the past year (including lack of copying pre-saves from every other platform), it really seems like investment in Qobuz has stalled.

It's too bad, because it seemed pretty promising. I really miss Rdio. :'(

For listening to Navidrome on the go I use the "substreamer" app on Android. The "Podcast Republic" app also works well for listening to college radio streams to find new artists.

Disclaimer: I was previously at Grooveshark.

> Unfortunately, none of the competition makes lossless streaming available

Deezer has FLAC streaming: https://www.deezer.com/en/offers/premium

May or may not be available in your locale. I don't actually use Deezer (I use Spotify) so I don't know how much of their catalog is available in FLAC.

Grooveshark, now that's a name I have not heard in a long time

I debated even including the disclaimer. It's been ages since it was shut down, and it's been 13 years since I was even there. However, I didn't want to violate some HN netiquette by not being transparent.

I'm glad you included it, I have fond memories using Grooveshark :)

I’ve been using Soundcloud since I was 14 and still keep it up. It more or less has the same songs (with some exclusions here and there) and it has tons of mixes which are lovely. I love having lofi on as i code so i got a few 2 hour mixes to power me through.

Would you mind sharing the lofi mixes you’re listening to? I love lofi music when concentrating on something.

Of course! I have written it all out here: https://github.com/bhurghundii/sharing-things/blob/main/lofi...

Happy listening ~

SoundCloud is my main thing these days, it seems to have way more of the niche stuff I'm interested in (like game music). Thought it wasn't particularly popular, but I happily recommend it.

I gave up around that time too, initially for Tidal. These days, I've mostly gone back to buying most music I listen to. I've even bought many of the things I pirated as a teenager-I value music, so why shouldn't my spending habits reflect that? Discovery is through the came channels I used 20 years ago, plus some youtube. Record stores are great for used stuff-I picked up ten albums on CD for like $32 last month.

Plus, I run a navidrome server, so I can stream (some of, I have a lot of vinyl) my own music when I'm out. I'm a lot happier with this arrangement.

Youtube music is really good.

YouTube Music barely works, is terribly designed even by Google standards, lacks basic features any free music player had in the 90s, and they'll probably shut it down next week anyway.

Which basic features is it missing? And even if it is shut down (it is the result of the shutdown of Google Play Music, and there is no successor, so unlikely in the near future), you'll still have YouTube itself to listen music on, so no real loss there.

Seamless (gapless) playback (that actually works). Equalizer. Cross-fade. Volume normalization. Buttons that react when you click them, not 5 seconds later. Desktop app, I'll even take a shitty electron wrapper. Literally anything related to customization of the application/playback/UI/music library.

If I'm setting the bar too high, just playing audio without freezing or bugging out constantly would already be a huge improvement.

> there is no successor, so unlikely in the near future

What is Google's successor to Google+, Stadia, Reader, Wave, Buzz, Domains, blocklist feature, YouTube Streams, Inbox, Health, Answers?...

YT muisc is my favorite music streaming platform. It actually has a great algorithm for suggestions.

I used to use Tidal, thought it was pretty solid and the hi-fi streaming was an added bonus.

Same. I switched back to Spotify though because I missed the vast amount of user generated playlists you can look up on spotify. Also, Spotify caches a lot more than Tidal, so it performs better when I'm walking around connected to my spotty college wifi.

I still use it, it's fine, but with enough annoyances that leaves me thinking if the grass is greener elsewhere.

Apple Music.

Great. I love when companies just exit the market when countries enact silly laws.

Your "silly law" may be someone's else fair law.

I love when companies just behave better when countries enact fair laws.

Of course it may not be easy to define what is a "fair law" but if it weren't for them, there wouldn't be workers rights or abuse prevention in many forms.

Yes but in this case it's silly because Spotify licenses music from artists and record labels under specific contract terms. Making it illegal to execute that contract in country A while being bound by that contract in country B was never going to turn out well.

For this law specifically it's a shitshow because they have their current math for the rest of the world which consumes 70% of their revenue and this law simply says yes and pay more. They can't rebalance the money to comply with the law because they would immediately get sued by record labels and so it would have to cut into the 30% which is just pure loss for them.

When you write a law that guarantees you'll lose money in an entire country with no way out you're kinda backed into a wall. Small artists should get paid more but this change can't come like this because there's nothing for Spotify to actually do in response to the law.

Conceptually this doesn’t feel different than minimum wage laws to me. Companies pay local required wages across countries all the time. I can appreciate why they’d pull out of a small market that would be unprofitable for them. My hope is that more countries would follow bc artists are getting a very raw deal

I hope more countries follow suit and then artists realize their music's value is closer to 0 than they think.

I agree it’s close to zero without the artificial structure of intellectual property laws

The article doesn't say what the new law requires in any way at all. How is what Spotify already pays not enough under the new law?

Value is determined by the purchaser not the seller of goods and services.

Sellers only suggest price.

The market, IE people, decide what to pay or if they'd rather sail the high-seas in search of their goods rather than pay extortionate prices.

Humans value music enough to purchase it, but we don't value it enough to purchase it for the prices the industry suggests.

Sad for Uruguay, but also small country with little return

This seems like a disaster bill similar to Canada's bill c-18 about news

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