Re-Spotify Payments

From: Peter Noone/Herman

On behalf of a few young boys who loved music and turned their mutual love into a career in music, I want to add my 4.25%!
If Herman's Hermits had ever suggested that some 50 years after they made a record in 3 hours, that our music would be available to everyone in the world for 000000.0000025 cents we would have thrown a party for you at our local pub!

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Yep…Our band owns it all, distributes through Tunecore and based on the numbers: a million streams of a song generate a little more than $4,000 into our bank account. Net.

The BMI/ASCAP royalties are totally separate, which most artists don't understand.

So whenever I'm clicking around Spotify I know full well that at a bare minimum Spotify is paying out $4k per million streams. When you have that number in your head and start tallying up the hundreds of millions of plays the big acts are getting...um, yeah, people are making money.

Most artists who are in deals now signed their deals before streaming got popular. So when they and their lawyer were looking at the contract, they probably didn't push hard for streaming royalties...because the rate was "so low" anyway.

Should it be more than $4k per million plays? Sure. I don't know. Probably.

But for all the whining and complaining artists do, I've never heard A SINGLE ONE come up with a legit idea and plan for what it SHOULD be. All anyone says is it should be more! Of course! We all want more!

Gabe Anderson

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hey bob,

you are totally right, most low pay-outs are caused by shitty label deals.
i work with niche electronic artists, catering mostly to dj's who usually buy vinyl or .wav downloads.
some have their own label and the see 100% of the spotify pay-outs (minus distribution fee).

turns out that in some cases the streaming pay-outs are higher than profits on vinyl sales and downloads combined.
this also shows that streaming is making their music less niche; its making the music easily available to a wider audience.

every situation/artist is different, but the concept of streaming should work for most artists when properly handled.

to me streaming is the new black gold.

Christiaan A. Macdonald

Director of Fools
Society Fools

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Hey Bob - been meaning to write you on this for a bit as I go over this with bands on my label and musician friends all the time. Even using the same Ticketmaster scapegoat analogy. I think what keeps the confusion going is publishing royalties. Artists will see pennies from Spotify listed on their statement from their PRO and think that is all Spotify is paying out, when in reality their label is getting paid the bigger check from Spotify.....but the label is usually fine with the artist believing Spotify is problem.

As a label, the majority of our revenue (60-70%) comes in from Spotify. Getting playlisted on Spotify is huge. Sure streaming has extended the payout from music - no upfront money for a download or full album - and you need to make music that people want to listen to repeatedly over time, but it's also extended the life of music as well. Songs that are years old can still pop up on playlists, and older obscure music has a new life.

It is amazing though as many artists truly believe Spotify is screwing them and don't want to get involved with the company.

Keep it up,
Bill Toce
www.axismundirecords.com

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I bought my first CD player and disk in 1982. A Lionel Hampton album that still plays just fine today after 35 years. If only I could find a place to play it besides my car.

Yesterday a friend sent me his newly released CD. I am not trying to plug it with you. I had no player on my MBP computer or even in my 'stereo' system. I am a few years older than you and still use my Hafler Amp, NAD preamp, B&W speakers and Thorens turntable. Still sounds great. CDs are now an archaic technology, right there with records, now popularly called "Vinyl". I remember seeing my folk's old 78s, then LPs, reel to reel, 8-tracks, cassettes, other hybrid concepts, MP3 and now streaming. What comes next? Nothing is forever.

Steve Greene

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Thank you, Bob. I represent a number of independent artists that have amassed millions of plays on Spotify and they're not complaining.

Sebastian Zar

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Bob,

I manage an independent record label and we LOVE Spotify. It surpassed our iTunes sales in total revenue almost 2 years ago and continues to dominate as our #1 revenue source now. It's by and far the best consumer music experience I've ever had. Our label generates a solid 5-figures of gross revenue per month from Spotify. Plus we move 5-figures a month in merchandise (T-Shirts/Apparel & other collectables) and we move another 5-figures a month in music SALES (CD/Vinyl and Digital Sales). We're a small indie label that probably most of the world hasn't heard of (we're called FiXT and are marquee artists are Celldweller, Blue Stahli, Scandroid and Circle of Dust btw). We cater to a niche genre of hybrid electronic-rock and have fans in over 100 countries because of the modern connected online world. We are forward thinking and survive by early-adopting new trends and embracing them. We let fans use our music for Free on YouTube while they game and generate another 6-figures annually in advertising/Content ID revenue from YouTube. We have a small team (about 10 of us) and cater to our die-hard audience. We also get our music licensed heavily in Film/TV/Video Games and have deep ties in the publishing world. It takes maximizing every possible revenue channel to make it as an indie, but we've been aggressive in making it work. All that to say, SPOTIFY is our #1 revenue source and we are sick and tired of labels and artist complaining about it not paying out. It pays great in our experience, as long as your music is worth sharing and repeat listening (focus on hits, right?) - which is what we've done. Many of our songs have been streamed 1-2 million times in Spotify.

Recently someone told me they didn't think Spotify was fair b/c they made $.60 per song sale from iTunes (after iTunes cut and their distro cut) and only made a fraction of a penny from Spotify. First off, that's not an apples to apples comparison so I told him to think of it like this… how many times will that person listen to your song over the course of their life? 10? 100? more? if you pro-rate that $.60 by the # of times they listen over the rest of their life the per-listen rate actually gets pretty comparable to what Spotify pays, and if they are a mega-fan who listens hundreds of times over the years, you might actually make MORE from Spotify than if they bought it outright. Secondly though, most people don't try out new songs by paying $.60 on their first listen, so with Spotify it's WAY more likely that someone will TRY your music to see if their into it, when they come across it in a playlist or suggested by a friend or in their Discover Weekly. And Discover Weekly alone is a GOLD MINE for indie artists/labels to be discovered by people who wouldn't have otherwise listened - which would be a service with paying advertising money for to get to those new listeners, but is provided for FREE as part of Spotify's service. So for all discover, value-add and pretty decent pro-rated per-listen revenue, I find it harder and hard for people to complain about Spotify.

Final though is Spotify as an artist platform. No other service comes close!!! Having the ability to create Artist Curate playlists right on the artist profile page, see # of listeners & plays publicly on the profile is HUGE. It also equalizes the field when you can see the # of plays on a track to see it's TRUE relevance/popularity vs looking at a track in Apple Music and it 'appearing' to be popular but no public data to support it.

If you want to check out some possibly new musical discoveries from a niche indie label (Electronic-Rock hybrid, from alt-rock to metal mixed with Electronic/EDM elements) - here's a custom playlist I made just for YOU Bob spanning the best tracks in our catalog on Spotify! (It is a private playlist, hosted on our top artists profile, but feel free to share should you feel so inspired).

https://open.spotify.com/user/klaytoncelldweller/playlist/1CzxvFTyEtVpGbJSevX0jH?utm_source=phplist5703&utm_medium=email&utm_content=text&utm_campaign=Re-Spotify+Payments

Always inspired by your emails Bob!

Best,

James Rhodes | FiXT
Co-Founder & General Manager
www.fixtonline.com | www.fixtstore.com

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