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Comment by solardev | Hacker News Reader

Right, so then why don't the economics of Spotify work out if similar margins work in the games and apps industries? Is music really that much more expensive to make than video games? Are music labels much greedier than game publishers? What's different about music that makes artists especially poorly paid vs games?

Or maybe it's just that Spotify is a subscription split between all the listened tracks whereas Steam is individual purchases? It's probably be fairer to compare the economics to Microsoft Gamepass.

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>Right, so then why don't the economics of Spotify work out if similar margins work in the games and apps industries?

Can you clarify what you mean by "economics of Spotify work out"? Are you talking about how much money artists are getting from spotify compared to steam? If so, I think the answer is pretty obvious. Video games derive an overwhelming majority of their revenue from selling the product itself and associated DLC/microtransactions. All of that is done through steam or whatever storefront, so the storefronts can rightly claim they're paying hundreds of millions to the publishers/developers. This makes them look "fair". On the other hand for music, streaming is only a fraction of overall revenue. Artists also derive revenue from live performances, merch, and album sales. That makes streaming platforms seem "unfair", because they get so little revenue from them, even if the revenue split is the same. I don't see this as an issue though, only an issue of public perception.

Artists are free to take their works off streaming platforms if they don't like the deal, but I suspect most don't because the free publicity they get from being on streaming platforms drive other revenue sources. Streaming is a loss leader. Artists complaining about this makes as much sense as news publications complaining about how little money they get through subscribers, when their real revenue source is advertisers.

(smallish) artists complain about it because they also run a loss when they try and tour. It’s quite difficult to make any money in this industry, and that’s fundamentally the source of discontent. It feels absurd to make a product then get paid nothing for making that product when lots of people use it.

>It feels absurd to make a product then get paid nothing for making that product when lots of people use it.

It really shouldn't be considered absurd, especially to people on hacker news. Many software projects are used by billions of devices (eg. linux, curl, openssl), but nobody is creating websites protesting how little github pays them. Just because people use your product, doesn't mean they're willing to pay money for it. If you can't make the economics work because nobody is willing to pay for your product, or there are tons of people lining up waiting to undercut you, blaming the platform is barking up the wrong tree.

The main developers of those projects you have listed have all made a living thanks to them.

But those are the rockstars of the FOSS world, the equivalent of Taylor Swift or whatever. I doubt she or artists like her would be complaining about how she doesn't make enough money from music.

The typical way to make a living from open source is to use your work as a portfolio to get a job doing closed-source development. Then if you keep working on your open source stuff it’s either for fun or to keep your portfolio up to date for when you want to switch jobs.

I don’t think there’s a musical equivalent to that strategy.

big names complained too.

also, of course it's a very frequently voiced "observation" that some percentage of a big amount of money... is a big amount itself, yet the marginal cost is - and you might not believe it, but - almost zero!

that's why people complain about taxes, bonuses, etc.

the usual complaints from small artists are usually about how the network effects are "biasing" the payout distribution toward big names. (ie. the fixed monthly subscription revenue split amongst all the artists weighted by plays.)

Thing is, one of the reasons why so many people use the product is because it's so cheap for them. Given the sheer amount of content being produced today, I don't think it's reasonable to expect most of it to command the price that it needs to be for the makers to make money off it. This is separate from the issue of parasites like Spotify, which can still profit in this arrangement by skimming a little bit from everyone.

>I don’t think its reasonable to expect most of it to command the price that it needs to be for the makers to make money off it.

Would it be that much though? Consider an artist with 20k unique regular listeners, which is successful territory but nowhere near big. If albums cost 3-5 bucks, an artist could make a good individual living releasing albums every 8 months or so, which is plenty of time to make em. Songs could then be maybe 30-50 cents. We’re never going back to such a model, but it wouldn’t be that expensive to fund artists.

Spotify boasts a huge free user base, when I looked at their financials, I mathed that a paying user generating 6x as much revenue as the ad supported users. They simply can't raise their payouts and support free users.

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