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Comment by Manheim | Hacker News Reader

Paying a nominal amount for each stream is one matter; however, compensating nothing for smaller quantities while you pay for larger amounts presents a fundamentally different issue. This scenario is akin to an author not receiving royalties for the first 1,000 books sold in a bookstore, or a manufacturer not being paid for the first 1,000 candy bars sold at a grocery store. Such practices can be equated with theft. It's perplexing how current legislation permits this.

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The way this should work is that there can be some minimum earning threshold the seller has to achieve to be paid out by the platform. But! once the seller achieves it, they should be paid in full for all the units sold/streamed before achieving the threshold as well.

E.g. App Store requires you to earn $100 equivalent to pay out earnings in Colombia. In many countries the threshold is currently $0.02, but it used to be much higher.

https://developer.apple.com/help/app-store-connect/reference...

Why is this desirable?

Wouldn’t it be more desirable to pay artists for everything? The implied comparison is with the status quo, and both Spotify’s and your proposals frankly kinda suck

Well, because at some point the processing fees are so high it makes no sense to distribute the earnings.

I don't think it's reasonable to expect to get "peanuts" paid out. Google AdSense is the same; you have to earn at least $100 to get it paid out, until then the earnings just accumulate in your account. Same goes for YouTube. I don't see it as unreasonable.

To be honest, I wouldn't care as a creator/a seller, unless the threshold is set high.

What processing fees? This is a digital platform. It's not like there are dozens of bureaucrats stamping tonnes of papers here.

Moving money around is way more expensive than you think it is, even digitally.

Instead of being incredulous, assume good faith the other person is speaking with best intent. Try to understand first.

There are no free payment transfer mechanisms. Whatever is free is a loss leader.

If you don’t know anything about payments, start by reading stripe.com’s documentation to understand how complex this is.

Pymnts.com is the industry blog if you want to go deep.

Going back to the App Store Minimum Payment Threshold Table[1], it shows how highly effective Apple became at dealing with money transfers in a large part of the world.

Of course, they don't need to base their threshold on worries about spam/fraud/etc, because they have another hammer for that -> the $99/yr. developer programme.

[1] https://developer.apple.com/help/app-store-connect/reference...

Isn’t that just part of the cost of doing business? Not all transactions need to be lucrative. The only reason Shopify thinks they can get away with it is because they’ve grown enough that small artists don’t have a choice but to suck it up.

There is nothing to get away with. Hosting small/shitty bands is not a money making proposition for Spotify. Most bands will never make money on Spotify, in spite of Spotify enabling them to do so. They just suck. And I think it is so cool that anyone can suck and still have their music be ubiquitously accessible on the premiere music platform, without real hurdles and at no cost, in (roughly) the same way that any big artist can.

the Beatles sold their first thousand records, at one short time in history.. and there will never be another Beatles due to "long tail" modern distributions.. casual ill-will and indifference to new projects must not be confused with reasonable, or even legal contractual behaviors

Well I'd say that if Spotify were forced to, they'd instead just remove small bands from Spotify entirely.

Honest question: have you ever run a business? You're talking about setting up millions of accounts to pay them $.02 or $.20 or even $2.00. ACH payments cost an average of $.29/each https://gocardless.com/en-us/guides/ach/ach-fees-how-much-do...

You're dealing with a bunch of people who will try to rip you off, so you need to have anti-fraud protections. Then you need to be able to override the anti-fraud protections because Alex, Alex and Bob, Alex, Bob, and Curt, etc. are all legit performers who want the payments to go to one common bank account even though you'd like one act == one bank account. Etc.

SEPA seems to have no problem moving sub-euro amounts. I am not an entrepreneur, but I did send single euro amounts to my friends. Is it more difficult in USA?

My impression from Germany is that while private accounts often have no transaction fees (and are either completely free, or charge a flat monthly fee), with business accounts it's not that unusual to have transaction fees of up to ten or even twenty cent per transaction.

It's the cost of doing business for the seller on the platform.

I'm not sure what's the problem here, to be honest. Alternativelly the platform could also charge withdrawal fees, making small withdrawals pointless.

Afaik this minimum withdrawal concept has been the standard way of doing business when reselling digital goods. See e.g. the aforementioned AdSense which has been set up this way for 20 years now. The same goes for Steam, once again you have to sell $100 worth of stuff to get paid.

That's not quite right. If they do reach 1000 plays they will be compensated for the first 1000 plays (which is like $4 dollars), and all streams thereafter.

What would you change about contract legislation to prevent this?

I'm not a scholar in law, but I would want the law to prevent someone to take someone elses property/ product and distribute it without compensation in their commercial services. 1000 streams is 1000 uses of a song. If you do not reach 1001 you get zero compensation, and that is in principle stealing in my opinion, and should also be that under the law.

But Spotify isn't taking anyone's property. Spotify is saying "here's how our payment system works" and then bands can decide whether to put their songs on Spotify.

True enough, the law should consider market control/ dominance as a factor. A market dominated by a few, should maybe be treated different than a highly competitive marked

It does in some circumstances. See apple's app store lawsuit in the EU. However this seems fundamentally different. It's more like youtube (which actually pays far less per stream $.1 - $1 per 1000 streams)

yes, as I said in my original comment, paying little is one thing, paying nothing is something different. Streaming music has ruined the "product" market for music as it was. That will not change. YT, Spotify, doesn't matter, you do not get much paid for music anymore, unless you are among the top dominant streaming artists in the long tail model. But something is still more than nothing...

I actually think this is helping the product market. This will set a minimal standard of quality for something to get paid. Otherwise the near future will involve the use of AI to automate the creation of thousands of garbage songs that each get streamed a few times.

If they would be smaller, e.g. a new startup on the marked, I would agree. But currently its the defacto place for your music to put if you want an audience. I would argue that one with that much marked power should be held accountable for such actions, e.g. with stronger marked regulations preventing arising monopolies.

Spotify and the internet as a whole has liberated the music industry from the strangle hold of record companies. And you still can't just upload your songs to Spotify, you need to go through some publishing group. Getting Spotify to pay more per stream is siding with the record companies, and you can be sure they are lobbying hard on behalf of their interests. It's a tricky situation.

yes, once our system is used by nearly everyone we will change the payment system so that while the small fish get no money (which shouldn't bother them because they weren't getting much) but obviously this scales to significant amounts of money remaining in our pocket. And if anyone complains we'll just act like the past doesn't exist!

On the internet, it’s all network effects so competition and proper alternatives is almost impossible. You can’t say “just don’t choose to use it” as flippantly in these cases

The part that's missing from that is is Spotify doesn't just take music and put it up. The music owner agrees with Spotify beforehand.

If you give me a free taste of ice cream, that doesn't mean I'm stealing from the farmer.

My wife is a professor in a field where they regularly publish books. "Zero royalties for the first N copies sold" appears to be common in the academic publishing contract world. It's a mess.

I wrote a programming book back when tech books were a thing you had to go physically buy from a physical store (more than 20 years ago now). The publisher sent advanced royalties, which was money that was mine, free and clear (it wasn't a small amount either - certainly enough to compete with a full time salary for similar time commitment and knowledge/skills needed). I wouldn't see any more royalties until I'd sold enough to equal what my advance was. If I never sold enough, then I wouldn't see any new money - the original advance was still mine.

I did end up seeing royalty checks, though not until the book was translated from English to Italian. For some reason, it sold comparatively well in Italian, pushing me over the threshold to earn royalities. The one actual royalty check I saw for my book was a grand total of $0.02. I never cashed the check and keep it in a desk drawer somewhere.

It's actually really pitty to hear. I think there are authors who contribute valuable research and knowledge to their fields and still not able to get royalties...

It is worse than that. We will pay thousands of dollars out of our own pockets for tasks like editing, proofing, and indexing.

I mean all financial risks are on the publisher side since he has to print some books with his own money and be sure it can get some money back if it doesn’t sell.

Steam does something similar for indie publishers. Unless you reach $100 in sales, you will not receive a check.

As does YouTube, there are minimum levels of consumption required for any given channel to receive monetization, and ads are still displayed on this channel before the uploader receives any money.

You could try to equate it with theft, but you'd make a poor argument. It's typical for licensing and other contracts to include provisions for minimums (in either direction, depending on who the bigger company is). Spotify isn't paying for an inventory of 1000 plays to give to its users, it has licensed the songs for unlimited (I assume) use within the platform from the publihers. Artist streaming payouts are a small line item in the contract.

> manufacturer not being paid for the first 1,000 candy bars sold at a grocery store

This happens, in any case. People set up deals with grocery stores for 100k units. The store changes its mind. You're left with a huge inventory to either sell to them at a discount or find a new buyer.

Feels like Spotify is restructuring systemic issues instead of trying to solve them. It's almost amazing how little, since the advent of Internet, the music industry changed, it did change, for established names more than small artist but the fundamental issue remains the same : fair & stable redistribution of value generated from artists.

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