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Comment by jrajav | Hacker News Reader

I see your point, but it's mainly this part:

> subtract a percentage for themselves

Streaming platforms (let's not just pick on Spotify, though they also pay worse than others) just do this arbitrarily. They decide how much to skim off for themselves before graciously paying artists. This isn't how it works in basically any other industry where one group of skilled individuals create content that is then sold on some marketplace - instead, the sale price and proceeds are visible to all, and the middleman takes a well-defined, reasonable cut of that.

There's no need to compare streaming platforms to other models of paying musicians, in order to know they're getting a bum deal. This model is not fair in the slightest, and it's perfectly alright to be upset about it.

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Spotify has never reported an annual profit in its entire existence.

If they were just deciding their cut "arbitrarily" they are doing a bad job of it.

The reality is labels have all the leverage and extract all of the profits because they have a monopoly on talent and content

Ironically it's widely known that the labels get 70% of all music revenue and Spotify gets to keep 30% for itself (which famously hasn't been enough to even turn a profit). You couldn't be more wrong.

You're right, I didn't know this. I was under the impression that Spotify self-reported its split and that it wasn't really auditable in any way. Can you link to a source?

> The company pays 70% of its total revenue to rights holders.

https://en.wikipedia.org/wiki/Spotify#Business_model

The cited source there is some old Spotify PR. Which, if you dive into, eventually states:

> Our current payment agreements lead us to distribute (~)approximately 70% of our gross revenues to master recording and publishing rights (both mechanical reproduction and performance) holders. The precise division between these types of rights holders varies by territory in accordance with local laws and negotiated agreements.

So, 70% / 30% is actually just a self-reported figure, and also just a ballpark based on current agreements at the time. Also, I couldn't find a current version of this page, only the archived one cited. All current versions of this page seem to have nothing but deflection, which might indicate that their self-reported figure has become less flattering.

iTunes had a formal sale price, and it still led a catastrophic collapse in music sales revenue (https://money.cnn.com/2013/04/25/technology/itunes-music-dec...) which only ended when Spotify became big. The point of a comparison is to understand whether Spotify is doing something that could be fixed to get more revenue to artists, or whether the economics of selling songs for money just don’t work very well in a digital world.

> middleman takes a well-defined, reasonable cut of that.

Can you cite some examples of this. Etsy perhaps?

Online app stores, craft stores (Etsy), contracting services (Fiverr), even some other streaming services with direct subscription sales (like Twitch). All also marketplaces where skilled creators are selling the actual value that drives it.

Ah gotcha. These are the site where creators don't have another middleman like record labels ? I am not sure how payouts work if you can even publish directly on spotify.

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