Hacker News Reader

Comment by TD-Linux | Hacker News Reader

I have never liked the streaming services like Spotify for this reason - the royalties seem incredibly small (the DRM is also not great).

I feel like Bandcamp (and iTunes) have a much better profit model. Offer full length samples so you know exactly what you are getting, and then charge 25-50 cents per track with 90% of it going to the creator. Despite the higher prices to the consumer, the cost feels a lot more justifiable in my mind. I've spent over $50 a month on Bandcamp before, whereas I can't see myself purchasing a music streaming service for anywhere near that cost.

View on HN

If Spotify were $50 a month it'd still be worth it. I don't know how they divvy up profits but lets look at this example:

I pay $12 a month and only listen to one record three times through on that month. You'd expect the artist(s) of the record to get my $12 minus a service fee, but what I'm sure happens is the artist(s) only get the price per play x 3 and Spotify pocket the rest.

Subscription models are a huge boon for this reason, but the inequitable split might change artists' minds about these sub services.

I tend to listen to a small subset of music over and over, the artists should be getting close to that $12/month cost in my opinion.

The question is would Spotify make money subscription revenue at $50 a month than $12. If the volume of subscribers at $12 is such to generate higher total subscription revenue then it makes sense to keep it low.

I think your point is pretty valid though, if I listen to 6 hours a day I am contributing way more towards band payouts than someone who listens to a few songs a day, even though I am putting in the same amount. The direct connection could actually encourage people to subscribe, have a page showing your contributions to each band you listen to.

> You'd expect the artist(s) of the record to get my $12 minus a service fee, but what I'm sure happens is the artist(s) only get the price per play x 3 and Spotify pocket the rest.

I think companies like Spotify end up spending 60-70% of that $12 on paying license fees, which include per-play amounts that eventually end up with the artists. And the structure of those deals is such that the groups with the biggest licensing deals get most of your $12, even if you didn't listen to music from that particular artist.

I agree that it's not what you (or I) want, but it does make sense from the perspective of the largest parties involved in these negotiations.

The royalty systems are created for paying the pop industry. The niches and the long tail gets nothing, because it's divided according to stakeholder size and by playlists from major radio & broadcasters, not a fair cross section.

I've just subscribed to tidal (was spotify before) for $20/month. I'm now quite happily spending $240/year which is significantly more than I ever spent on CDs(I think I bought 3 CDs in the Sam year once...). Even at $10/month for spotify I was still spending far more money than I ever spent previously. I can't believe that the industry can't flourish on that kind of income per listener. Perhaps the problem is that the majority of spotify listeners for instance aren't actually subscribers?

What % of listeners are not paying? It seems mad that for $10 a month you can get no ads and download music to your phone and you don't pay the fee!

I agree that the royalties are too low, but there is a world of difference between zero-cost and non-zero-cost.

If the environment allows competition between distribution channels and artists are able to negotiate, artist compensation has the possibility to inch higher over time.

Case in point: Taylor Swift and Spotify. Regardless of whether her business model ultimately yields the highest return, at least she is not being compelled to distribute her material via Spotify.

Reply on news.ycombinator.com