Taylor Swift’s Stand on Royalties Draws a Rebuttal from Spotify
nytimes.com
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Unlike piracy, when you pay for a service, you're making a judgement about the service as a whole. Many people are willing to use a couple different free services, but probably not piecemeal paid services to get the same experience. So, unlike piracy, Spotify has to have a catalog that makes most users think "yeah, they have all the music I want to listen to". Especially as a top artist, Taylor Swift has a lot of power in this relationship, because of the impetus that Spotify has to provide a "full" catalog.
Hopefully, this model continues, and artists like Taylor Swift continue to push back. The system of 20 years ago had too little power in the artists, too much power in the distribution, and too little choice for consumers. I like that the middleman / channel delivery is now the one who has to provide value, and the artists can take their music elsewhere. It gives artists power, allows competition in distribution, and provides more consumer choice. We could go too far along any of those axes, but this sort of fight is, imho, pushing things in the right direction.
A utopian music situation? The only way to truthfully do that is to delve into the illegal download category unless you are dead set on buying physical copies of everything, or settling for streaming through an iTunes, Spotify, Pandora, etc. When I think of reasons why X service exploded or Y Software was the definition of music downloads it usually points to one common feature: ease of use. Sure, anybody can learn to torrent music, surf IRC chat rooms for albums and songs, get accepted to user groups or private sites of the like, but until it is as easy as AudioGalaxy, Napster, Spotify, the iTunes Store, etc., and it's back catalog can rival the greatest music pirate -- it will never permeate the way a company would wish.
It's a weird tango these companies play. They have the blue print of success (if you ignore legal standpoints) with the first two programs I mentioned above (AudioGalaxy / Napster) + any torrent site / "warez" site. The trick is convincing the music industry to play ball. So long as they have their greedy, sticky fingers in the giant pot somebody is always going to leave the deal feeling like a loser.
Given that one has to agree it's a near-certainty that Spotify eats into record sales at least a bit ... so her position certainly makes sense.
> “Wake Me Up” had been played 168 million times in the United States on that service, yet yielded only $12,359 in publishing royalties, of which he kept less than $4,000.
These numbers don't remotely add up - they're off by 2 orders of magnitude. What gives?
I honestly have no idea...
Radio stations don't pay per play. They buy a blanket license from performing rights organizations. Then those organizations listen to sample data and divvy out payments to publishers according to what their sample data says.
> Singling out Pandora, the leading Internet radio outlet, he said that “Wake Me Up” had been played 168 million times in the United States on that service, yet yielded only $12,359 in publishing royalties, of which he kept less than $4,000.
Spotify != Pandora
The answer to your question is in the same sentence as your quotes.
This is the money quote. I'm one of them, a paying Spotify subscriber who downloaded Taylor's 1989 album off PB.
Also, I think artists confuse money extracted 'per pay' with money extracted 'per customer'. They should focus on the latter.
If my choices as a consumer are these two:
1. Buy 10 plastic disks with music etched into them (CDs) per year, for $120 or
2. Pay $120 to artists and listen to all music.
These two are equivalent earning streams for artists (ignoring the money that record labels siphon away), but I get more value out of the second option (2). And the difference is huge!
In fact, when I only had the first option (1) I rarely took it, i.e. I didn't buy many CDs (before piracy/internet). So, the artists didn't extract much earnings out of me.
Then comes Spotify (and friends), and suddenly there is an outcome where I'll part with $120 per year and artists earn money from me that they didn't before. They should embrace that, not focus on money per 'played song', rather on 'money earned per consumer/year'.
I agree totally with your point, the economics for her (and other mega-stars) are likely different from the median artist.
The labels also play a part in this, they take most of the CD/online/radio revenues, where as artists keep most of their tour earnings (this is what I've heard). In such a model it may make perfect sense to restrict streaming, since it may tilt more people towards paying for a concert.
This may very well be 'revenue maximizing' for her, but I think for artists as a group they will may make more by extracting a reasonable sum from large swathes of people by providing a good chunk of value (e.g. Spotify/Pandora), then trying to drive up CD sales.
An absurd example: a piano man.
This, artists have said for decades, has always been the case. They have to tour to make any money. The royalties (from radio play, from media sales) are a pittance.
>Then comes Spotify (and friends), and suddenly there is an outcome where I'll part with $120 per year and artists earn money from me that they didn't before. They should embrace that, not focus on money per 'played song', rather on 'money earned per consumer/year'.
Honestly, why should she? She just sold 1.3 million albums in a week. Talking in absolutes about this is silly. Just like when Radiohead released a pay what you want album, different methods will work for different artists. I commend Taylor for not doing what everyone else does just because. It took balls to go against the grain and she came out on top. Good for her. She's not advocating to make Spotify illegal or anything which would be where she loses me. Spotify is great for some things and great for some artists some of the time.
I don't think I understand, wouldn't downloading it on TPB validate Spotify's statement?
Well, as others have pointed out her revenue maximizing probably includes more than streaming and CDs: tours, merchandise, sponsoring etc. play a big part too.
Maybe even the headings/PR from 'turning Spotify down' will generate enough extra attention to offset the loss of some poor people (me) turning to TBP, despite the album being top tanked on TBP.
My main point is that artists as a group should look focus on how they can increase their total earnings, not on how to maximize CD sales.
I agree with you. Her album is the biggest album in potentially 10 years (The last album to sell this many in the first week was 10 years ago when overall sales were double) So it's going to be on the top of everything including PB. I think all of us would find it objectionable if we were told "You have to change the way you do business otherwise we're going to set up an illegal operation and kneecap you anyways" It may happen and it may be reality but that doesn't mean it's even close to being a justification for why an artist should change their approach.
For anyone else, the numbers and the equations are radically different.
This is not "earning streams for artists," then, if you're willing to handwave away the huge amounts the record labels siphon away. It's "earnings streams for the recording industry." The nature of the spotify licensing deals, and the reason so many artists other than Taylor Swift are rebelling, is that spotify makes a bunch of money, the record labels make a bunch of money, and artists make a pittance but have no part in negotiating that deal. Not to say record labels provide no other benefits (promotion, production, logistics), but more and more, the best choice for artists is becoming to simply not participate in this system. For many, it's better to try to locate some middle ground where you can make a living with moderate success by selling directly to your fans than it is to buy the pop music lottery ticket and get either superstardom or (much much more likely) nothing.
You get more value out of option #2, but I doubt the artists do.
This attitude is what I believe is really wrong with these streaming services: the value of the product being created is being significantly devalued. If you can't get it as part of the $10 / month you've decided you're willing to spend for access to 'all music', then you're just going to rip it off. Because Spotify does such a good job providing so much good music for so little money to individual listeners, they now balk at the idea of paying a real fair value for this work.
As an artist, she has every right to decide how much her music is worth and choose how she wants it distributed and paid for. I think these kinds of things are important once in a while to establish what the appropriate pricing levels and artist compensation should be.
A lot of megastars acknowledge that the success of their "life's work" is somewhat a function of luck. Internet radio's artist discovery mechanics scale down to give exposure to smaller artists. It seems to me like we're headed in a direction where a manufactured top-40 single, funded by huge corporations, isn't a prerequisite to success, and that just doesn't seem possible without disruptors like Spotify.
Edit: If you're using Spotify for exposure, why get paid for plays? And why would you be happy that listeners can "keep" the music instead of buying it somewhere for more money? Spotify seems like the worst of both worlds.
Basically, they have seen decreased sales, increased streaming, and no increase in touring opportunities due to streaming services.
I've done that on Spotify. I hear a song I like and go to the entire album, to find I hate the rest of the album. That's fine. That one song goes in my playlist and I listen to it over and over again, and the artist gets paid for making a song I enjoy, rather than me not buying their album because I know there is only one song I will enjoy.
The end result is that I don't know any artist very well, although I'm well versed in the subgenre. I have no desire to go to a show, as I don't know any artists.
Buying a CD, while a bigger decision, almost entrenches you as a fan. I'm much more likely to want to go to a Taylor Swift concert if I've listened to her CD 100 times (and I'm almost certainly not going to listen to ANY album 100 times with Spotify).
Neither model is better than the other to me. But they are different, and value accrues in different ways for the models.
I guess that the difference might come from the fact I've never been a big buyer of CDs, growing up in Eastern Europe meant that I couldn't really afford music so pirating MP3's was the norm.
I really want artists to understand: Our interests are totally aligned with yours.
Spotify’s interests are not totally aligned with artists’ interests. Spotify’s interests are aligned with record labels and assorted middlemen, advertisers, and investors like Sean Parker, Li Ka-shing, KPCB, Coca-Cola, Fidelity, and others who want to see a big payout on their $500+ million investment. Artists get lip service when they complain, and at the end of the day, they get the scraps after everyone else has taken their cuts.
Spotify is owned >30% by record labels, so your point is an important one!
I use Spotify like crazy, and I hadn't bought an album in maybe a year. I listen to lots new music, almost none of which falls under the header mainstream pop. But most of this music gets a couple listens and I move on.
Maybe it's just because subconsciously I feel like I want to get my money's worth, but this Taylor album has been on regular rotation. And I definitely wasn't a fan before. She’s become a fairly big deal with my peer group (women in their twenties in New York), but I wasn’t taking part in the love. Now I am, and I think it’s partly because just a little bit more was asked of me.
If people are going to pirate anyways then she'll be back, but it seems like she made a pretty smart move to me. Maybe it won't work for everyone, but I don't think she was telling everyone to leave Spotify.
More what? Revenue?
> At our current size, payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that’s only growing – we expect that number to double again in a year.
https://news.spotify.com/us/2014/11/11/2-billion-and-countin...
1. Don't care who TS is. If she was on Spotify, I'd give her a whirl - but since she's not, just not sufficiently bothered.
2. I think she (or her handlers - whoever makes the decision) make a valid point - artists should be able to pick whether they appear on the Spotify free version.
3. Lastly - all the talk about 'artist pay per play' is misdirected, as far as Spotify is concerned.
The only metric that matters is what % of revenue they pay out to the rights-holders. The number now is 70% - ie they keep 30% of total revenue for themselves and give 70% to the label (who is then free to pay the artist as per their agreement).
We can discuss whether 70% is a fair number (I personally have no idea). But talking about anything else is missing the point - since it ends up being a discussion about split between the label/artist/producers/etc - which Spotify has nothing to do with.
I have never noticed this sort of first name usage before.
[0] https://news.ycombinator.com/item?id=8592523 [1] https://news.ycombinator.com/item?id=8592325 [2] https://news.ycombinator.com/item?id=8592395 [3] https://news.ycombinator.com/item?id=8592393 [4] https://news.ycombinator.com/item?id=8592276
I'm skeptical about that in a lot of cases. For example, someone once pointed out that people called Spike Lee "Spike" a lot, where they never referred to Kubrick as "Stanley" or Scorsese as "Marty", and that there was likely a very subtle issue of respect there. That's probably accurate, and "Lee" is probably the more thoughtful choice there. But Lee, Kubrick, Scorsese, etc are selling an image of authority. Well, they aren't doing it themselves consciously, at least no more than any other director does as a matter of necessity. In any case, it's part of how directors are thought of, and Lee deserves that same kind of respect.
Taylor Swift, though, is selling something different.
In places where it's common to call people by their last name (military, sports, etc), they don't do it out of respect, they do it because last names tend to be more unique than first names.
It's been around for a long time. When someone reaches the stratosphere of celebrity, they can go first-name-only. Arguably, Taylor Swift is there.
(Though in fairness, I've never seen this applied to Taylor Swift before the comments on this article.)
The superstar artists aren't ever going to go away, but they are going to be fewer of them, and they aren't going to be as big. The sad part about this is that the little guys, the "middle class musicians" are going to struggle to do it professionally.
Is this that surprising though? There are plenty of very very talented musicians out there who DON'T make enough to go pro. Those who do are more lucky than good, and this shift will both enable more people to gain an audience, and prevent more people from making enough to live off it.
On the other hand, Spotify is a service for finding and enjoying music. People will pay for a good service and this is why there is a business model here and a potential revenue stream for artists. It isn't the entire future of ways to make money from music, but it is one of the best upcoming models.
The thinking is that the people who buy actual full albums are going the way of the Dodo. It'll be harder and harder to sidestep these "alternative" distribution/streaming channels.
Edit: http://www.forbes.com/sites/zackomalleygreenburg/2014/10/30/...
Artists have been given no equity in spotify. They should pull their music and move to another platform offering ownership.
Straight from the spotify website [1], they say the average revenue from a stream to a rights holder is between $0.006 and $0.0084. The poverty line is $23,283. That means an artist needs 3,326,142 plays in a year to just hit that line. That's not sustainable for the vast majority of artists.
[1] http://www.spotifyartists.com/spotify-explained/#wait-i-thou...
What they should do is stop loss leading their service off the back of cheap valley money and charge more. It's simple, but they refuse to, because like most other valley companies, they're unsustainable if they don't scale.
Just because she's rich and famous doesn't mean she isn't working.
Also, she's stayed pretty normal. I say this without sarcasm: it appears hard to stay "normal" as a young, up-and-coming superstar.
So the reality is somewhere in between: she's worked hard and continues to put in extreme hours, but there would be an advantage in having a schedule set for you.
Definitely unfair for GP to say she hasn't worked for it.
If you call being "busy all the time" and doing interviews and other things work, okay fine. Realistically she has an army of people to handle affairs and things that I couldn't dream of doing. Why?
Because of stuff like this:
"according to Music Ally, the first single from that album, ‘Shake It Off’, was likely generating in the region of $84,000 a week from Spotify plays globally at the point it was removed."
$84,000 PER WEEK buys a lot of help. It's needed at that level, I get that...but it also only happens due to being part of a system that exists solely to feed itself.
Just because she's rich and famous doesn't mean she really works.
That's absolutely true, but you seem to think it means that she necessarily doesn't work. Also she mostly seems to do interviews when she's promoting a song or album that's finished already.
Again, I think you are falling into the trap of defining "work" globally by what you know locally. Just because she's not having to, say, schedule her own meetings, doesn't preclude her from working.
> We completely differ on the definition of work then.
Undoubtedly we do. Show two people on the internet a word, get three definitions.
> Art takes labor, but it's not work because you're creating something from nothing using a skill that is inherent to the person within.
I'm a programmer, and I meet the above criteria, yet I still feel like I'm working. But again, our definition or "work" is undoubtedly different.
> $84,000 PER WEEK buys a lot of help. It's needed at that level, I get that...but it also only happens due to being part of a system that exists solely to feed itself.
Not sure what this has to do with work.
I think in the end you're more worried about the purity of the "art" or something like that. I have nothing to say about that, because I don't consider myself an artist. Maybe she's a sell out, maybe she's not. I don't know. I don't care honestly. She's a genius in my book, and a hard freakin worker to have built what she has.
I'd like to hear from you because you are apparently the only contributor to this thread who has any subjective experience with Spotify's platform, and therefore the only person so far with anything of actual relevance to say.