In a fascinating and really open Facebook debate initiated by fellow producer, cycling enthuiasist, and coffee-drinking pal, Eric Ambel (www.ericambel.com), I was alerted to what was finally a clear insight into how and why Spotify could possibly have landed an agreement with the bigger record labels granting it (Spotify) access to such an enormous and uber-valuable catalog of recordings while completely shafting the artists with the probably worst deal in history since the you-get-nothing deals of yesteryear.

Basically, it's all here in this article in The Guardian by Helienne Lindvall: http://www.guardian.co.uk/music/musicblog/2009/aug/17/major-labels-spotify

Let me paraphrase what Lindvall says: In exchange for access to the music catalogs the labels own, Spotify gave the labels Spotify stock. Said stock is sequestered into the labels financial structure in a way that gives artists no access to the proceeds of this deal. Labels then agree to the lowest royalty rate in history, leaving even the biggest artists to collect paltry sums while Spotify and the labels build stock equity on their (the artists') backs.

According to Lindvall, even Bob Dylan has pulled all but three odd live and best-of records from European streaming services for similar reasons.

I have been puzzling over the Spotify royalty rates since first learning about them, and no matter how accurate or inaccurate the information I was looking at might have been, I couldnt figure out for the life of me how and why anyone would have agreed to these rates. What I also noticed while openly debating about Spotify royalty rates were a number sort-of-pro-Spotify arguments. In light of this information about the stocks deals, I feel I can finally publicly attempt to take a whack at these sort-of-pro-Spotify arguments without sounding like a conspiracy theorist.

Sort-of-pro-Spotify Argument 1: "You can't afford to not appear on Spotify because no one will discover you."
This is a very common thing for people who discover new music via Spotify to say. My problem with this argument is that it preys on artist insecurity, and it also fails to acknowledge that people who actively set out to discover new music are pretty rare. In my opinion - as someone who doesn't use Spotify and who doesn't actively set out to discover new music - this argument makes way too big of a deal about the exposure one gains from being on Spotify. But, opinions aside, we'd need some actual statistics before finally substantiating or debunking the you-need-Spotify's-exposure argument. In the mean time, I suggest a healthy skepticism whenever anyone suggests this argument. I mean, how would I know to even search Spotify for the artist in the first place, and, anyways, I can check them out on iTunes or something without using Spotify.

Sort-of-pro-Spotify Argument 2: "Spotify is the new radio."
The number of significant differences between Spotify and a radio station is large. Don't make the mistake of believing that because Spotify has free music interrupted by ads that it's at all the same in any other way.
a) Radio play is legally a public broadcast and pays a royalty to the songwriter via ASCAP, BMI, SESAC.
b) Radio does not give searchable access to countless albums by countless artists.
c) Even Pandora points a listener to iTunes where one can make a purchase; Spotify links to exactly nothing, and operates within its own app, essentially sequestering your interests and access inside of Spotify.
d) Radio (and I include Pandora here) very very rarely plays whole albums, and aside from 2fr-Tuesdays, rarely more than one song at a time by any artist. The broadcast of a single has been, since the LP existed, a great teaser/advertisement for the LP. And this leads to...

Sort-of-pro-Spotify Argument 3 "Spotify is going to help increase record sales."
It's a stated goal of Spotify to replace your record collection - in fact record collections more generally and globally - with their subscription service. Spotify makes more money when they can show advertisers that more people are using Spotify. Internet industry lingo for this is "flypaper," a sweet thing that traps those drawn to it. Because their main revenue is from selling flypaper to advertisers, Spotify actually benefits when you DON'T own records, and has an inherent motivation to get you to stop buying records. The only thing Spotify is going to try to sell you is a Spotify subscription, and maybe some Spotify-streaming stereo system for every room in your house, your phone, swimming pool, car, golf cart and toothbrush.

Sort-of-pro-Spotify Argument 4: "We just need to up the royalty rate."
This was my argument for a while. But even something as unlikely as doubling or tripling the royalty rate won't undo the fact that Spotify is out to bury the sale of albums once and for all, and at a doubled or tripled rate, the monetary value of recorded music still isn't flowing to the artists in fair proportion, and really won't if Spotify manages to establish the hegemony they're aiming for.

Sort-of-pro-Spotify Argument 5: "If you don't like it, don't use it, and stop bitching."
This argument has always confused me. The number of unfair things in history that would still exist if we followed such advice is enough to take us back to The Dark Ages. I know this isn't like a Rosa Parks-level injustice, but the underlying lack of logic might be more clear if we apply such logic to that historical case. In essence, this argument says, "shut up and do nothing," which is probably like 90% of the problem.

Sort-of-pro-Spotify Argument 6: "Record sales were never a huge part of artists income anyways."
Aside from being a dubious claim at best, any income is income and can make a difference. Each artist has some ratio of income from live show tickets, record sales, merch and licensing. Some rely heavily on record sales, some don't. But regardless, this doesn't make the deals the labels and Spotify are cutting somehow fair to artists.

Sort-of-pro-Spotify Argument 7: "Blame the labels. Spotify had no choice."
C'mon, Spotify had a choice. The choice to put ethics above profit margins. It takes two to tango. Both Spotify and the big labels knew exactly what was up. IMO, part of doing business is taking on the minimal ethical responsibility to at least understand the ethics of those with whom you do business. (Yes, I know I'm sounding pro-regulatory-anti-money-possibly-a-hippie-and-defintely-hates-Ayn Rand here. I'm cool wtih that.)

I'm continually floored by how many times I hear these different sort-of-pro-Spotify arguments. I'm assuming (the 'ass' part of that word noted) that many of the people using these arguments are assuaging the guilt foisted on them by exposure to how unfair Spotify deals are for the artists they (the sort-of-pro-Spotify folks) love. It reminds me of the arguments made by all the p-t-p justifyers back when things started to get really illegal and bad.

Look, I think the convenience of Spotify is pretty rad. Instant, searchable access to the history of all recorded music on my phone? There's no denying that that's an amazing and powerful bit of postmodern technology at work there, and I know it's not going away to be replaced with overpriced vinyl or some other retro-solution. In short, I'm not here to say we need to go backwards or that Spotify inherently sucks.

I'm here to say this: If you are like me and you really really like, maybe even love, the artists who make the records that set your life to the rhythms, textures and harmonies of human emotion and compassion, then perhaps you are also like me in that you'd like to do something to steer the flow of income generated by recorded music back toward the artists in a more fair way than Spotify currently makes possible.

And if we do have these things in common, then what are we to do?

In the early 1900s a group of songwriters-turned-activists including Irving Berlin and John Philip Sousa got together and formed ASCAP in order to collect royalties, and generally advocate, on behalf of songwriters. It worked, and, soon after formation, a lawsuit against a non-paying restaurant owner went to the supreme court where Oliver Wendell Holmes ruled in favor of the artists, thus establishing a much more fair set of regulations that we still use today, nearly 100 years later. (read more here: http://www.ascap.com/about/history/1900s.aspx)

How did Berlin and friends start on this campaign? They started by talking about it, gathering information, disseminating that information, building understanding. And that's what im trying to do here, and it's what I recommend we keep doing. I had a great teacher once, John Mohawk, who, in the face of someone saying "It seems all we do is talk about problems," said, "Well, if we're going to do something we better talk about it first, don't you think?" That always stuck with me.

I find the efforts of people like Eric Amble and Lindvall give rise to just the kind of conversations we all need to keep having if we're going to understand enough to know what's really going on. It's called advocacy, and if I'm right that fans actually give a shit about artists, I have a feeling advocacy might help.

I for one am greatly relieved to learn about the stock deals cut between the labels and Spotify, if only because I don't feel like a conspiracy theorist anymore. And while I am no lawyer, I have a feeling Bob Dylan might have a pretty good one, so I'm feeling encouraged that on a nuts-and-bolts-legal level the deals the labels are swinging with Spotify might get questioned in light of artists' contracts. And maybe the notion of a Spotify-song-play being a new type of quasi-public broadcast could get a closer look. And, perhaps, rather than withering on the vine, artists' income from record sales can sprout a few new leaves in this new and strange digital soil.

I can't claim to have the silver bullet here, but there are a lot of angles to explore, so I invite lots of open discussion. Have at it, please.

From my sonic heart to you,
Allen Farmelo
www.farmelorecording.com

Wed, Apr 16, 2014 - 5:21AM
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Sat, Aug 11, 2012 - 12:04PM
Chris Conly said about this:

Brilliant! Thank you for clearing some of the dust around Spotify so the rest of us conspiracy theorists can come out into the conversation. Is Dylan the only still-recording-and-touring music industry barometer left?

 
Sat, Aug 11, 2012 - 12:48PM
Dave Pinkham said about this:

This article is really informative! Regarding Dylan's albums, I just double checked and they still appear on my Spotify. I do have a paid subscription (though I think I may cancel it after reading this), not sure if that makes a difference.

 
Sat, Aug 11, 2012 - 3:55PM
Erik said about this:

Thank you for your insights, point of view and starting this discussion.

As a songwriter and music fan with a collection of 2000 purchased "albums," as well as a Spoitify full paid subscription holder, I feel the bigger question becomes why are these artist still signing deals with these "evil" labels. Their bottom line is profit. Don't the artist hold all the power, as it is their content we are talking about, that is until they sell themselves. What happened to their power?

We live in a now world of hungry, tech savy consuming and nothing could be better for the musical artist. Yesterday I heard a song playing in a restaurant, shazzamed it, found it on Spotify, listened tithe album later and then bought it on iTunes. I'd never heard of them, or their music. Let's stop worrying about Dylan's catalog and start thinking about the future.

 
Sat, Aug 11, 2012 - 8:57PM
Anu Kirk said about this:

It is standard practice for the labels to get stock in music services in exchange for licenses.

They have their fingers in ALL of them.

 
Sun, Aug 12, 2012 - 4:13AM
Dirk Blanchart said about this:

Great insightful article. I can only come to the same conclusion after my laptop crashed on a recent holiday and I had to rely on Spotify & my Iphone to listen to my preferred music: great technology, but the split of the revenues is so unfair and medieval that action against this kind of uber-deals between major industry players has to be undertaken & awareness amongst songwriters and musicians needs to be raised as much as possible. Apparently 12.000 plays on Spotify net a total royaltie income of 25 euro or plm 30 dollar... now how's that for building or maintaining a career in the music industry when some record company owns your masters and has to pay you let's say an artist royaltie of 15% of that sum...

 
Sun, Aug 12, 2012 - 6:50AM
Jim said about this:

Thank you for writing this. SPOTIFY is a frickin' PARASITE. I just can not believe that, while they are making money, they are paying me, what, something like one-TENTH of a frickin' PENNY per stream! Sometimes even LESS! HELLO??! I need 10 or more streams to earn a frickin' PENNY?? What abusive trash is this?? It's the same damn mindset that resulted in all the musicians at the London Olympics being forced to play "for the exposure" instead of for any financial compensation if they wanted to be there at all. Think the Olympics and Spotify are charitable organizations? Think again! We musicians are getting hosed. DOWN WITH SPOTIFY!

 
Sun, Aug 12, 2012 - 6:51AM
jonathan segel said about this:

you should post this to theTrichordist...
for those that read David Lowery's letter to Emily White from there, you should also read:
http://thetrichordist.wordpress.com/2012/04/15/meet-the-new-boss-worse-than-the-old-boss-full-post/

and
http://thetrichordist.wordpress.com/2012/06/27/a-brief-history-of-artists-control-of-their-product/

 
Sun, Aug 12, 2012 - 11:58AM
Daniel Schwartz said about this:

It continues to be almost heart-breaking to see how our work is still being suctioned into the unsatisfiable maw of stock-price valuation. There is very little left of culture or production that hasn't been made near-worthless in the great deception of "The Ownership Society". The delighted consuming hordes give themselves gleefully over, texting thumbs at the ready, to create a solid foundation for the new trickle-up pyramid.

"Let's stop worrying about Dylan's catalog and start thinking about the future." Dylan has always been the best canary our coalmine knows. Watch him, his eyes are open.

 
Sun, Aug 12, 2012 - 2:10PM
George Necola said about this:

hi Allen, thank you for the very informative article.

I am right now uninstalling spotify and spreading the word.

 
Sun, Aug 12, 2012 - 2:55PM
Digimuse said about this:

What rates are we talking about? There is a lot of confusion about the Spotify rates but as far as I haven been able to figure out the current average rate per stream is $0.005 so half a cent. It seems to depend on your digital distributor. I have seen statements from CDbaby with rates of $0.015 for streams by Premium users

Now let's forget the deals with labels and forget about Spotify and question what rates a streaming service in general can pay for a $10 a month subscription fee. Let's say the service pays out 70% as royalties just like iTunes does. That leaves $7 a month for the streams by one user. How many songs does an average user stream? Tricky, but let's assume 25 songs a day. That's 750 a month. Now divide $7 by 750 and the rate per stream is $0.0093 Isn't that quite close to what Spotify pays?

And on top if that mind that Spotify is Freemium so it has to pay for the free streams as well. Doesn't this put things a different perspective?

Read this blogpost from a clearly pro Spotify site but still.. http://www.spotidj.com/blog/paltry-spotify-payouts-explained/

BTW Bob Dylan has put up all his music on Spotify a few months ago;)

 
Sun, Aug 12, 2012 - 3:03PM
Mfinegold said about this:

I heard bands say now "it's all about touring. " Maybe they can make their money there. It would seem that every musician and composer needs to know and unite about bringing justIce back through the law.

 
Sun, Aug 12, 2012 - 9:53PM
Chris Burke said about this:

Thanks for your article.
I have to agree with digimuse. The problem is that you repeatedly make reference to Spotify's low royalty rates but the only time you address it directly you say:
"...no matter how accurate or inaccurate the information I was looking at might have been, I couldnt figure out for the life of me how and why anyone would have agreed to these rates."
No matter the accuracy of the 'fact' you base your entire article on? I think it matters quite a bit.
Here is an article by Justin Coletti, who regularly has criticized Spotify, with some data. Although he remains critical, if you read to the end he mentions recent data that observes one-and-a-half cents per stream payout to artists.

http://trustmeimascientist.com/2012/08/06/how-to-fix-spotify/

That's 3 times the oft quoted half cent figure. Now I agree we need to approach figures on the internet with caution in general, but same goes for the figures you relied on.
I am not pro-Spotify, but I see a lot wrong with the arguments behind what often appears to me to be a knee-jerk screw-the-man response. It's at least clear that the royalties are rising. I'd say give it a chance. And please do continue the debate.

 
Sun, Aug 12, 2012 - 10:32PM
CA said about this:

I don't know how I feel about Spotify. I am a premium subscription member. Why? Because access to any song at any given time is exactly what I (and every other music listener I know) has always wanted. But I am also an artist, one who has an album on Spotify, so I know exactly how much they pay out (at least to a small independent artist who hasn't negotiated a nice royalty rate from them). And I can tell you, the money from the very modest few thousand plays I get each month on Spotify is the most significant source of income from my album, outstripping iTunes or any other service that carries it. You make the argument that Spotify is out to steal sales away from these sources, and it is true that I make much more money for one song sold on iTunes than a single stream on Spotify. But Spotify hasn't been around long enough to *really* start cannibalizing anyone's digital sales very much, so even though I only get fractions of a penny from Spotify, that's money that I otherwise would not have received. As you say, "any income is income and can make a difference". The analogy that makes sense to me is to consider the early record deals: artists were enticed to sign away their publishing for a large upfront advance, which screwed them from big bucks if the song was a hit. It's the same with iTunes: I can take the single song or album for a bigger upfront price and never make another cent off that sale no matter how many times the person plays it or burns it or shares it, or I can get paid a fraction of a penny ad infinitum for the rest of Spotify's existence every time someone listens to it. The recurring payment is always a better long term bet than the one time payment. Now, maybe the rate is really insultingly low; I wouldn't know. I'm a bottom of the barrel indie artist. I have no idea what any other kind of royalties pay. I do know that Spotify's technology will record every single play of my songs, and pay me for each one. On traditional radio, they (for some stupid reason) still can't figure out how to do this, and rely instead on more of an average that favors the hits more than the one offs (not like radio every plays anything worth listening to anyway). Though my songs have seen very, very limited radio play, it has paid nothing. I'll take accurately accounted for fractions of a penny over hazily accounted for pennies any day. And I'll take getting paid for a million plays on Spotify than having to pursue legal action to get paid for a million plays from a fan uploaded video on YouTube, and even then only get paid by agreeing to some absurd advertising. Is Spotify bad? I can't make up my mind; I can tell you it's not going away, because they give me (and most people) what they really want when it comes to listening to music. Should they pay me more? Hell, I'll take a raise any day. But is their current scheme unfair? I really, honestly, even at this point, can't say.

 
Mon, Aug 13, 2012 - 2:54AM
Neil Wells said about this:

Like it or not, streaming services like Spotify are so much better for the consumer that there is no going back, much in the same way that we cannot undo the invention of television or the automobile.

The questions that really need to be answered are 'what is the fair price for a stream'? And 'what is a fair number of listens for someone to be willing to expect from an album'?

Even at current (far too low) royalty rates there are several albums which, had I streamed them from Spotify rather than bought them traditionally, would have earned the artists more money from my listening over the last 5 years.

I like this model- I like the idea that the records I listen to the most are the ones that earn the most money. It potentially provides a way for artists who make long-lived records that people treasure to continue earning from that work for ever.

So the question really is 'where do we set the per-stream level so as to fairly reward artists'?

 
Mon, Aug 13, 2012 - 4:29AM
Digimuse said about this:

@CA: Great write up. Love every word of it.

@Neil Wells: Setting a standard for a fair per stream level is hard. The per stream level is a result of revenues and number of streams. I.e. More revenues ? higher rate, more streams ? lower rates. Fixed rates are impossible if the streaming company want to stay in business. Spotify pays out( at least they say so)70% of their revenues as royalties, that's looks fair enough to me. iTunes does the same.

 
Mon, Aug 13, 2012 - 8:00AM
Geremy Schulick said about this:

Thanks for writing- I have always wondered about this. This prompted me to check our CD Baby page and confirm that in fact for most Spotify streams we get ONE TENTH OF A CENT. That means that someone would need to listen to one of our entire albums 700 TIMES in order for us to make the same off of it as we would on iTunes. That is just ludicrous. We have some good fans but all I know is that I would never listen to even my favorite music that many times. I think if the rates were more like some people have described here, like a half a cent to one cent a stream, then it would be more reasonable but for an indie artist to get a tenth of a cent per stream amounts to basically nothing. Does anyone know why some artists are getting so much more per stream?

 
Mon, Aug 13, 2012 - 8:16AM
Allen Farmelo said about this:

Sincere thanks for the debate, everyone.

As for the actual numbers, it's a kaleidoscope of different calculations. This article does the best job of showing the flow of money and the calculations, if not the actual hard numbers (which float and change).

http://blog.tunecore.com/2012/03/the-additional-10-5-spotify-royalty-you-are-not-getting.html

And even at the most basic level, US songwriters are not properly acknowledged, let alone paid, by streaming services. This is a huge issue.

The issues are really different for a signed artist vs. and independent one, for a songwriter vs. a recording artist or one who does both, for a band vs. an individual, for an established artist vs. a new one.

Again, no silver bullet here, because the problems and questions and math are complex.

Agreed (and already said in my article) we aren't going backwards. But like the automobile industry, one would hope laws requiring the corporations to (metaphoricly) build safe vehicles that doesn't spew lead into the atmosphere will come up. Any new business needs careful study and, usually, regulation to temper hungry profiteers' behavior. History proves that 5000x over.

@Neil - you're arguing sort-of-pro-Spotify Argument 4, as is Colletti in his piece, as was I prior to realizing that both Spotify and the labels are willing to tuck money away from artists so they (Sptfy Lbl types) can buy another Porsche or beach-front house or whatever.

My piece can be summed up like this: the thing standing in the way is not the unfair royalty rate; it's greedy corporation owners and employees who are cashing in on the unfair rate they've set.

Thus the need for advocacy, regulation, etc...

And the need for the question: Will these streaming services ever be fair and equitable if run by profit-driven corporations?

Though not perfect (we know this), ASCAP, BMI and SESAC are mandated by not-for-profit status, and thus by law, to work on behalf do artists. perhaps we need new, artist-centered organizations like those to become our streaming services.

Keep the debate going. Thank you, sincerely.

 
Mon, Aug 13, 2012 - 8:23AM
Allen Farmelo said about this:

Geremy, thanks for your candid post.

I don't know why the rates are the way they are for any given act, but it's probably in that article I just posted above.

 
Mon, Aug 13, 2012 - 2:44PM
Digimuse said about this:

@ Allen Farmelo You are missing one vital point. Spotify pays out 70% of their revenues as royalties. That's before deducting operational costs. The company makes a loss because of operational costs but that does not hurt royalties. As far as I can tell there is no money being tucked away from artist by Spotify.

Rates are low because the level is a result of revenues and number of streams. This piece explains how the rates are calculated: http://www.spotidj.com/spotifyroyalties.htm

 
Mon, Aug 13, 2012 - 6:30PM
Allen Farmelo said about this:

Yes 70% of their revenue, they claim, goes to paying royalties.

That doesn't make Spotify a good program for an artist to participate in. And it certainly wasn't good enough for the big labels, who said, "eh, not good enough. give us some stock."

I also find that article bails out of logic with it's answer to why people are complaining. Dude says, "Because they've had a negative experience." Right at the point where he'd have examined valid complaints, he bails. I quote: "Hey, it's the internet, the number one place for all your complaints." Dude just wont look at the down side.

Granted, I don't know if increased volume of users of Spotify will actually somehow make the rate play out better for copyright holders. I just don't know if that math is right, or wrong or what. It's a huge gray area - lots of fog.

What I can say is this: Spotify and the bigger labels are taking advantage of the gray areas surrounding all of the issues regarding streaming services - those issues being a near total lack of regulation, no solid ground for whether a stream is a public performance, a ton of uninformed people signing up, or being signed up without knowing.

And, if I had to guess, Spotify is not about to keep that 70% agreement in place should they be able to lower it at some point due to an increase in volume resulting in higher royalties. We'll have to watch.

So, I'm again citing sort-of-pro-Spotify Argument 4 (just raise the rates). And I'll add that I, for one, very strongly would like to pay more for recorded music than Spotify makes possible.

 
Tue, Aug 14, 2012 - 4:54PM
Kevin said about this:

@Allen, Great piece. There are some larger sort-of-pro Spotify themes that I think you missed.

1) Much like iTunes, Spotify is first-and-foremost a TECH company at its core. The product it provides to its users is a music experience. This is a hard pill to swallow for many artists & labels, but the reality is royalty rates are merely another form of overhead. Spotify stands out in digital landscape littered with failed music startups because of their experience first, and their catalog second. Developers worked very hard to shave milliseconds off the moment you double click a song, and the moment it hits your ears. Add to that their social integration, and you have an experience matched by no other music product (for better or for worse). Until there is an artist-centered organization which can understand that these are paramount to the consumer, lobbying for a commodity which continues to devalue itself long-term (i.e. the single stream) will be an uphill battle. Which leads to my next (admittedly rhetorical) point...

2) Where is the tipping point for royalty rates? As the internet is now 20 years old (?), the single song as it exists digitally will forever be a depreciating commodity. As an artist, I would never refer to my music that way, but as someone who likes to get paid, at some point I must attach a currency value to it. Additionally web-services MUST attach a value -- after all it takes money to build & power servers. With that in mind, a fixed-rate across-the-board doesn't seem to work (though the math is easier). Then again, we may never settle on any artist's per stream value.

3) The reality is, at the core of this argument is Article I, Section 8, Clause 8 – “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Applying this to a digital landscape (not just exclusive to music rights holders) is still very much in its infancy. To then apply monetary value to these rights is basically wild-West.

Companies who are the first to excel (i.e. Apple, Spotify) will be the first to be vilified. While I commend them for their successes, we must continually address their short-comings (as we have here!), and always keep the above clause in mind.

 
Tue, Aug 14, 2012 - 5:28PM
Amanda Williams said about this:

Yes! Thank you for this. Am now spreading among the songwriting community.

 
Tue, Aug 14, 2012 - 7:42PM
Kno of CunninLynguists said about this:

To "CA" who said "the money from the very modest few thousand plays I get each month on Spotify is the most significant source of income from my album, outstripping iTunes or any other service that carries it".

Either you're doing it wrong, you're full of shit or you're a Spotify shill. No offense, of course.

 
Wed, Aug 15, 2012 - 7:45AM
Allen Farmelo said about this:

Kevin, you make a good point about Spotify seeing royalties as overhead. Said differently, Spotify inherently must strive to keep compensation of artists as low as possible. And strive they have!

My suspicion: because Spotify has no direct relationship with musicians, and because S sees artist royalties as overhead, and because probably like no business has ever once decided to intentionally raise its overhead, my guess is that, no matter how you twist the numbers and pump up the percentages, S is not going to work for musicians.

The core problem: Spotify is in the flypaper business, and sees musicians as flypaper makers. I'm not sure I can get past this attitude built into their business model. It's inherent.

I quote Projekt Records Sam Rosenthal, perhaps the best known anti-Spotify advocate: "In the world I want to live in, I envision artists fairly compensated for their creations, because we (the audience) believe in the value of what artists create. The artist's passion, dedication and expression is respected and rewarded. Spotify is NOT a service that does this."

Your quoting the Copyright Act is really compelling, and leading the discussion in a good (and potentially philosophical) direction. Thank you!

 
Wed, Aug 15, 2012 - 9:52PM
Chris Burke said about this:

@Allen
Thanks for the tunecore link. I read the article and it is really very relevant. But the point of the article is that much of the problem getting a better rate from a streaming service is due to the way the law specifies that the mecahnical and performance rates are calculated, over which the services like Spotify have no control. Additionally there is the BMI-ASCAP-SESAC deduction from what the artist/publisher receives. None of this supports your argument in any way I can see, although it is interesting.

 
Wed, Aug 15, 2012 - 11:04PM
Jay said about this:

I have to respectfully disagree with your assessments here. Is Spotify paying at a royalty rate that would easily allow retirement for a musician? No, but as I covered in a series of blog posts, artists are deflecting the blame. The real issue is that there is too much music out there and people's ability to access a lot of it slices the pie too thin.

As I detail in the "Part 2" blog post below, Spotify has the potential to double the music industry revenue pool if the paid subscriber base reaches a significant number. That's a win. On the other hand, the average person would listen to 10x more artists as a result. So the industry gets more revenue, but each individual artist will receive a smaller part of the pie. This is the heart of the problem. Many economists detail in great length how products get devalued considerably when distribution walls come down. This is not a fault of Spotify.

I encourage you to read these posts and consider that other societal changes are really at work here that have nothing to do with Spotify. And if that's the case, then the true solution is the standard "adapt or perish" model.

http://www.hypebot.com/hypebot/2011/09/jay-frank-its-not-spotifys-fault-that-you-make-so-little-money.html

http://www.futurehitdna.com/its-not-spotifys-fault-pt-2/

http://www.futurehitdna.com/patience-pays-for-spotify-royalties/

 
Thu, Aug 16, 2012 - 7:21AM
Allen Farmelo said about this:

@Chris: The laws surrounding royalties are part of the problem, and certainly we must figure out who is lobbying for and writing the current laws, and why. My feeling is not uncommon: we need laws that accommodate new technologies and the resulting businesses that use them.

As for the PROs taking a cut, that's been the case forever because they pay operating expenses with that cut, but still operate as a not-for-profit.

Again, I'm not convinced that the solution, or even the goal, is raising the royalty rate. I think the solution is to remove the profit motive from the situation by having a non-profit streaming service that inherently values artists, not flypaper.

 
Thu, Aug 16, 2012 - 7:58AM
Allen Farmelo said about this:

@Jay - nice articles. Clear with some new angles.

I feel you employ pro-S Argument 1 pretty heavily, saying "So, it’s a free country, and you could choose not to be on Spotify. The issue is that you then encounter the one thing worse than getting paid peanuts and that’s obscurity."

Folks, please quote me: At this point, obscurity is not the result of not being on Spotify.

In your second article, you say that historical factors (I think they're technological in this case) bring the walls of access down and thus shrink the royalty rate. Ok, I think this is a valid point worth looking at, but that doesn't mean that as a society of PEOPLE we have to behave like cheapskates.

Again, the problem is not the royalty rate; the problem is people's attitudes toward music and art and the general devaluing of said glorious things through their interfacing with them via a service like Spotify that is not interested in valuing music and art.

Spotify could be summed up as a huge, global billboard saying, "Look, all the world's recorded music is really only worth $10/month!"

That's a disgusting message. That's an anti-artist message. That's 1/5th what I pay just to have Internet, 1/12th what I pay for a cellphone service, 1/10th of my electricity bill. That just doesn't seem right to me.

So, if your right that it's a result of historical/technological factors, that still doesn't make it ok, and historical/technological factors usually have to be regulated in order to keep us on a course of relative sanity and wellness.

Leaded gas anyone?

 
Thu, Aug 16, 2012 - 10:45AM
Jane said about this:

Yes, true!

www.mrosupply.com

 
Thu, Aug 16, 2012 - 9:03PM
Allen Farmelo said about this:

Another good question came up about Sound Exchange on yet another Facebook thread.

For those who don't know: Sound Exchange is a not-for-profit that collects royalties for digital and satellite broadcasts, including streams. For example, they collect for Sirius and for Pandora plays.

Here's what came up:

----------------------

A colleague asked: "Allen, how come Spotify streams are not counted by SoundExchange? Or, are they?"

I answered: "Christina, you're asking a totally important question. Sound Exchange can't collect for Spotify streams. Why, exactly, is kind of unclear. My best guess: Spotify runs in its own app, and therefore isn't a web-browser based stream, and therefore is exempted from the laws mandating the royalty. Compare it with Pandora which is based out of your browser; SE collects for Pandora streams. As far as I can tell, this is one of the loopholes Spotify has managed to create for themselves, and is perhaps another reason to be wary of the precedent they're trying to set."

 
Fri, Aug 17, 2012 - 10:28AM
Josh said about this:

If consumers love Spotify, it will be able to raise its rates, and artists will benefit. Unlike direct music sales, it is unlikely that an illegal free alternative will emerge, and artists will ultimately command a strong bargaining position (to the degree that bad law isn't stacked against them).

Maybe this is going in a direction where richer first worlders pay for the music industry using premium, ultraconvenient web services and live concerts, and poorer folks have access to near free high quality music using illegal p2p. Not saying that is 'right', but it looks like a likely outcome. Big question is how much are consumers going to be willing to pay, and how big will that industry be.

 
Fri, Aug 17, 2012 - 12:45PM
Kevin said about this:

@Allen, I have to respectfully disagree with the statement: 'Spotify could be summed up as a huge, global billboard saying, "Look, all the world's recorded music is really only worth $10/month!" '

It's hard to compare apples to apples here, but what's an appropriate amount to charge? Let's say - for arguments sake - Spotify suddenly announces its $50/month. What would happen if your internet service provider suddenly raised its prices from $50/mo to $250/mo? The billboard saying, "Look, access to one of the most powerful and important tools of the last 1000 years, all for $250/month!" In both cases, you can make arguments that the prices are justifiable, given their value. However, the point of the copyright clause isn't necessarily in place to make sure rights-holders get paid. It's to "To promote the Progress of Science and useful Arts" (whatever that means).

Obviously the comparison is a bit of a stretch... But I recently read somewhere -- of course I can't find the link now -- that nearly 50% of Americans still primarily discover music through terrestrial (free!) radio. Do you think they would pay more than $10 month? Unfortunately, value in music & the arts is driven by demand, not necessarily by importance.

EXCELLENT points about Sound Exchange though. Especially given how Spotify is venturing into the "radio" stations through various apps. The lines are certainly being blurred.

By the way, this has got to be the most respectful and intelligent comment board...ever. Cheers to that!

 
Fri, Aug 17, 2012 - 6:01PM
DiverDunham said about this:

I am not a musician but am an avid music listener. I am also a fickle listner who is looking for new and different music. So a streaming service is huge for me. I have been using streaming since the legal Napster, through to Yahoo Music and now Spotify.

I think the thing everyone is overlooking here is the scale and scope of what Spotify can bring. I know a lot of people who are not avid music listeners and have joined spotify. My Mother who is 83 is one of these. She has not apent money on music in decades. However, she gladly pays her $10/month to listen to the music she wants to hear, and shares it with her firends on Facebook.

If you can actually get more people to pay $10 a month and 70% of that goes to pay artists, then doesn't that make the whole model work for everyone.

We are in the early adopter stage of this technology (even though it has been around for about a decade). The early adopters are the heavy users, soon we will get to the masses who will pay money for music that they never would have paid before.

That should benefit everyone.

 
Fri, Aug 17, 2012 - 9:20PM
Paul K said about this:

To those who suggest that Spotify is not already cannibalizing iTunes sales... do some year over year looks at your iTunes royalties. We are seeing a total hit in our iTunes sales, while our spotify spins are shooting through the roof. Not to mention the fact that eMusic is on death's door at this point.
Sadly, we take income where-ever we can, because as a label, we look to provide an income for our artists. But Spotify is bad for content creators, there is simply no way around it.

 
Sat, Aug 18, 2012 - 7:52AM
Allen Farmelo said about this:

First of all, again, thanks for this thread everyone. It is incredibly instructive and civil - dare I say mature? :-)

@Josh - not sure what to say. I believe the whole first-, secon-, third-world thing is so complex and broad and problematic that I'm unclear as to how to approach this. Cassette culture thrives across Africa and India while we toss out iPods like old shoes. But you raise such an interesting set of questions and angles to explore! Totally relevant, and vast.

@Kevin - I hear you about, like, "you can't just double and triple the price of things." But here's a question I sincerely asked a large group of my colleagues recently: why was gas $.37, milk $.50 and records $9.98 when I was as kid and gas and milk are now like 10x the price, literally, while record have gone up to $9.99 - one cent?!

Look, I know the answer has 1000 sides to it, but if you stay panned out for a minute and look at it very basically, it's frickin' bizarre that well pay the same price for three gallons of gas that literally evaporate in 70 miles if your lucky (or smart) while a copy of a work of art that can move you, transcend you, costs the same - or less!

A for the 1000 sides of the real answers to music's resistance to inflation, I think we need to avoid getting too far into it, but we know that p-t-p theft has a lot to do with it. One problem with Spotify is that they're building their business in the wake of that devistating devaluing of recorded music, taking advantage of it he damage the mp3 did, and now trying to set preccedent that this is a valid way to do business.

Agreed: the Spotify stream needs to be looked at by the courts again in light of whether it's a broadcast or not. What if I hear Spotify in a bar, or get it when I rent a hotel room, or...? Loophole city until then, IMO.

As for copyright laws, that's a philosophical debate that's already taken up countless pages in legal theory and actual cases, but the general gist is that the creators need to profit in order to enable them to keep creating, and thus benefit society. Copyright law is not there to help creators make money as and end in itself; it's there to help them make a living so they can continue to create. Earning and creating are inextricably linked. Justice Holmes said as much when giving ASCAP the winning hand back in 1919.

 
Sat, Aug 18, 2012 - 7:53AM
Allen Farmelo said about this:

@Diver - I hear what your saying about volume of users, and that point has been made in a few places, and may be somewhat valid, but you have to take a closer look at the Spotify math (really confusing) and at the laws regulating or not regulating such a service, especially in regard to holders of both copyrights in a recording (C) and (P). I don't expect many people to know much about all of that, and it's really complex stuff perhaps beyond the scope of this discussion, so suffice it to say that chess is simplistic in comparison to the game Spotify is playing, and winning, right now.

But maybe we do need into the specifics of that chess game. I'm not the expert, but we've together raised some really good questions so far about all of it - and BMI/ASCAP/SEsAC/Sound Exchange's role (or non-role) here is really important to understand.

Spotify loves to tout its 70% like its a gift, but that's the same as iTunes, which turned Apple into the world's most valuable tech company.

Also, Spotify is not showing a profit? Of course not - they're in a major expansion mode, building the value and volume of their stock. Said stock is owned partially by the labels. Let's not forget that! Not showing a quarterly profit doesn't mean a company isn't building it's net worth on a massive scale!

@PaulK - Absolutely right. And Spotify is out to bury iTunes, there's no question. And that's specifically sad in light of Steve Jobs' passing, as he was the first to make a strong pro-artist/label move in the digital era. He even says that stealing music is bad karma - he really said it!

Specifically - S allows a premium user to download music to an iPhone or iPod for use when not on line! And those tracks can be there for s long time, even though techniccallyntheyre not owned.......another loophole of sorts? That's a direct move on iTunes turf.

Lots to investigate! Thanks everyone, again, for opening all of this up!

 
Sat, Aug 18, 2012 - 10:02AM
DiverDunham said about this:

@Allen I agree that Steve Jobs worked to get artists paid. At one point he was a advocate of charging an extra $50 to every iPod that was sold. His thought was that $50 per device would bring more money into the recording industry than ever. Then make the music free and have a non profit group (either existing or new) distribute the money.

I think we are fighting more than digital issuses here. For the majority of people in the US music is and has always been free. They would listen to it on the radio, in a bar or restraunt or on the jukebox. Most people do not and have not bought cds, records or 8-tracks regulary. They listen to the music that gets played for free.

The internet has brought the ability for everyone to customize what they listen to. This turns even occasional listeners to a potential revenue stream. Since you say we are searching for a solution, I think what neeeds to happen is to find a way to even the playing field for all music. If Spotify is truly paying out 70% then let that go out to an independent body that then splits it evenly between all the music played. So for example, if their 70% is a million dollars, and they had 100million songs played, then every song gets 1 cent. There would not be a set amount per stream, instead, as the pie gets bigger everyone gets more. This would help any streaming service get control of their costs better. They would know the amount they are paying out and would not want to limit or throttle content to clients.

This seems like a win win for everyone. Now, you just need to get the big record companies to agree to it.

 
Sat, Aug 18, 2012 - 11:27AM
Allen Farmelo said about this:

Hi Diver.

I agree that the idea of a play getting a certain amount makes some sense, but unfortunately the math is like 10x more complicated because of the dual copyrights held in recordings, because of multiple deals cut between artists and labels, between Spotify and the labels, between Spotify and the companieslike TuneCore who sign people up to S, between the laws in many different countries that regulate or don't regulate these things....I mean, it's just so complex. And I think S is playing a chess-like game within this complexity - and I think they're cloaking their pawns in some rhetoric and opacity.

I like the idea of a pro-artist not-for-profit managing this. It sets me immediately at ease compared to companies like S who are driven only by profit. And perhaps that's where Jobs really stands apart, because, as I undstanding the man, he was motivated by integrity, passion, and a will to contribute positively to society and not by profits. He is almost solely responsible for getting people to pay for digital downloads, finally.

 
Sat, Aug 18, 2012 - 2:43PM
Al said about this:

"Copyright law is not there to help creators make money as and end in itself; it's there to help them make a living so they can continue to create. Earning and creating are inextricably linked. Justice Holmes said as much when giving ASCAP the winning hand back in 1919."
Thanks for bringing this issue to light! I am a composer and artist with a few cd's on "S" as you say. They, Spotify, have an agenda, and I hope this dialog here points the way back to the above quote. In short, earning and creating ARE linked! We should not be silent! But, what are some ways we can be more vocal?

 
Mon, Aug 20, 2012 - 7:59AM
Allen Farmelo said about this:

Al, I wish I had more answers as to what can be done directly, aside from the consciousness raising going on here. I wish I knew of a group, or organization, that could help organize some action toward change. ASCAP, BMI? Sound Exchange? I'm really not sure, but am going to look into it.

Anyone else have ideas?

 
Tue, Aug 21, 2012 - 4:17PM
Dave said about this:

When See these discussions about music online, piracy, youtube, iTunes, and now Spotify, I always feel like we are discussing the wrong thing. What musicians should be doing is turning to their labels and ask why they been sold down the river yet again, and stop acting surprised that there's a new company in town that is only 'in it for the money'. That is what companies do, and if it wasn't Spotify it would just be something else. Cancelling your spotify subscribtn isn't going to make labels start caring for their artists, and I think that is the main problem.
Artists should have gone on a world wide strike over labels behavior years ago anyway.

 
Wed, Aug 22, 2012 - 6:08AM
Allen Farmelo said about this:

Thanks for chiming in Dave.

There are good and bad labels, good and bad record deals, good and bad people in bands and at labels.

I personally work with a handful of excellent labels who are not only fair, but true partners with their artists. In one case, I know the label discussed Spotify at length with the artist I work with. They're not a small label, but still an independent company (non-conglomerated).

I think, though, that you're absolutely right that many labels, and especially the corporatized conglomerates, are not only giving artists raw deals off the bat, but continuing to do so via deals like the stock deal with Spotify which hides revenue.

True, a company aims to profit, but that doesnt have to be the only objective. We have Apple as a beacon, as Jobs stepped in and actually demanded that copyrights were honored via iTunes, so I feel a company can make money and still be fair and equitable, if it's leaders so choose.

 
Thu, Aug 23, 2012 - 3:03PM
The Machine said about this:

There's obviously lot's of variables that come into the equation on issues such as these, but the one major thing i've noticed for sure is societies lack of value on music & art. Especially if you live in such a populated city like Los Angeles, where there's so much music & art that people are jaded.

 
Thu, Aug 23, 2012 - 9:11PM
Allen Farmelo said about this:

Machine - you are right, thoroughly. And the number of things that have the value on music and art so low is 10x more complex than anything we've touched on.

IM-40-something-HO: the shift into a digital tech-base where aceess to such a vast sea of recorded music is the norm, I think the value of any one record has really decreased. This mindset makes services like Spotify seem perfectly reasonable.

I mean, as a young child I'd save up $9.98 to get just 30mins of music. And then I'd actually take care of it! Don't leave it in the sun, dust it off with cleanser, handle is gingerly, loan sparingly, store safely. Totally different attitude toward what $10 of music was all about!

 
Tue, Sep 4, 2012 - 9:50AM
Jonathan Segel said about this:

and did you see this, in re: Pandora?
http://musictechpolicy.wordpress.com/2012/08/27/mr-pandora-goes-to-k-street-its-all-about-the-lobbying-bucks/

 
Fri, Sep 7, 2012 - 10:51PM
Micol Cazzell said about this:

It seems that whenever royalties come up people bring up all these complex economic concepts, and it really doesn't make sense to me. Listener volume, supply/demand logic etc. simply doesn't apply here. Art doesn't work like gasoline, because the true monetary value of music in terms of practicality is flat zero. The value of art is determined by how much the appreciator appreciates the work of the creator. It's an abstract value and rests much closer to the realm of human emotion than the realm of economics. And so I would say that if you're a kind human that appreciates the work of an artist you should support them, and spotify doesn't do that. At all. And frankly I think designing an appealing streaming service that does allow listeners to support their artists would take nothing short of a genious.

 
Wed, Sep 19, 2012 - 7:43AM
Dan Workman said about this:

I confess to not reading every comment, but there is one argument that I have not seen so far, and it is one that applies to Spotify and streaming royalty rates in general, and it is "once the technology improves and more people are using the services, the royalty rates will go up and payments will be commensurate with mechanical and terrestrial/satellite radio performance royalties". I've heard some fairly heavy folk in the industry offer up this trope. It is simply not true. Without some sort of legal regulatory control, or resource scarcity (which is certainly not the case with music in the age of Abelton Live and Garage Band), consumers have NEVER paid more for any digitally distributed product just because more consumers want to buy it. So we're not in a very good position to negotiate a better deal after the fact.

 
Thu, Oct 4, 2012 - 2:05AM
john said about this:

One argument I have seen is that if artists are not paid, they will stop creating.
File sharing, and in it's later legal incarnation, Spotify has been happening on a massive scale for the last decade.
How come there is so much good music still being made? Wouldn't everyone give up and get office jobs?

 
Mon, Oct 8, 2012 - 10:22AM
Allen Farmelo said about this:

John, the impulse to do music comes from many places, and often not from a disire for money. Real artists often are obsessed only with their art.

But that's not a reason to devalue recorded music, nor is it any kind of justification for the devaluing of recorded music that's taken place since P-t-P emerged.

Also, I personally find it hard to find "great music" that's not from a band who has found a way to make a living at it. That's what I want to preserve - a simple flow of the capital earned back to the artist so they can keep doing their thing.

Allen

 
Mon, Oct 29, 2012 - 7:04PM
Janis said about this:

"Flow freely like water."

I'm sorry, but water is a commodity. Every water molecule is like every other water molecule, and it did not take the focused effort of a talented, determined human intellect to create each and every one of those molecules. Music is not an indistinguishable, interchangeable commodity.

S can talk all it wants about music flowing like water, but the only way that can happen is if music becomes as cheap, plentiful, and low-quality as nearly everything else that can be manufactured in large quantities.

What would you rather have, good food that you have to work a little to get, or to swim in an ocean of dirt-cheap chicken mcnuggets for the rest of your life?

Fact is that anything that can be popped out of a mold in planet-swamping quantities and "flow like water" for super-dirt-cheap prices is invariably not worth the powder to blow it to kingdom come. S will only ensure that we are up to our noses with the kind of cheapo synthetic music that is presently taking over the planet like musical velveeta. Anything better will go underground.

Music, like art, is no good when commodified. You CAN'T make Mona Lisas, Faberge eggs, and Beethoven symphonies flow like water, no matter how many corporate pep talks you bang on about it, because they just <i>cannot</i> be produced in quantities that cover 70% of the Earth's surface. They take the focused, relentless effort of only the rarest kinds of human minds. They will NEVER exist in commodifiable quantities. S can exist be in opposition to art of all forms. If it tries to take it over, it will only ruin it. And will do NO good to the artist that create it.

 
Mon, Oct 29, 2012 - 7:15PM
Janis said about this:

Still reading comments -- and Jesus, I'm getting annoyed with people comparing music to bread, gas, and milk, much less water.

Am I the only human being on the planet who can see the utter foolishness of comparing the production and selling of materials that (ideally) take an enormous amount of care and specialized training to create with commodities? Does anyone in this room know what commodities ARE, and what distinguishes them?

O_O

I feel like we're talking about business models for brain surgery by saying, "Well, the local diner pays it short-order cooks minimum wage, so we'll build a hospital where the remuneration for surgeons is based on short-order cooks. I mean, wouldn't you like to get quality brain surgery for $10, plus fries?"

Good luck with that.

Now, you won't die if you don't pay the musician for quality product ... but you still won't get a quality product. Welcome to the music world of the future, where it's just like now -- where it all sounds exactly the same -- only more so. And if you don't personally play an instrument very well or know someone who does and can barter with them, you ain't gonna hear anything else. Ever.

Nothing but Boom-shaka-shaka-shaka-ooh-baby-teen-angst-love-song-tish-tish-shaka-shaka for the rest of your life ...

Well, for those of you who can't play an instrument. I'll be fine, thanks. :-)

 
Tue, Oct 30, 2012 - 11:01AM
Allen Farmelo said about this:

Janis - awesome.

I am guilty of comparing food and music - bad move on my part in some discussions.

I agree with you 100%. Recorded music is, in my opinion, one of the greatest achievements of our species - it can transcend and transform and transgress and all the trans-goodness out there.

Thanks for your thoughts.

 
Tue, Oct 30, 2012 - 12:06PM
Janis said about this:

Allen -- absolutely. And it just doesn't come in enormous quantities. We forget that the only thing one can buy or sell -- at a profit! -- for shit prices, is shit.

 
Fri, Nov 2, 2012 - 4:27PM
Gray said about this:

I really hope that all sides can find a good solution here. Spotify has been a fantastic find for me. I used it to listen to things I haven't heard in years and to discover new things. I also don't have to carry storage devices around or mirror drives between my main locations anymore. It just works.

Hopefully we can get the artists paid and move forward with streaming solutions.

 
Sat, Nov 3, 2012 - 5:41AM
Plutonia said about this:

The biggest problem we face isn't these companies ripping us off. It is the collective attitudes of all the people in our society.

Musicians once were respected as people with progressive ideas about humanity and life. We once held a leadership position in this society. People would reform their own opinions about the world after being exposed to our art. Our perspective was sought out, and was considered important.

No longer. Now we are fluff. We are human toys. We are the court jesters here to amuse the 'real' people doing 'real' jobs of 'real' value. Dance, jester, dance. Nobody cares what we think and if they did, they would listen to us as a joke.

This is why nobody under 30 buys music. It comes from what they consider irrelevant sources. And the folks over 30 don't buy music because the industry has largely stopped making music. It makes diposable audio marketing to further a model's career of being beautiful. Most of the economically successful 'musicians' these days are not musicians. They are models. Carole King vs Katy Perry.

Until we can convince the whole society that we are important, intelligent, and uniquely skilled, there is no way we will ever gain their respect again. And without respect, there is no way we can make money because they can steal even easier and nobody around them will object.

The only way to convince the society that we are important enough to protect is to create music that actually has enduring value. Most songs these days make a splash for 6 months and then they are already 'old'. I bet in 50 years there will be more people listening to the music of the '60s, '70s, and '80s than of the '90s, '00s, and '10s. And that is because of enduring value.

Do this again and we start to fix everything.

 
Sun, Nov 4, 2012 - 8:18PM
Mike Colucci said about this:

Re: #2-SPOTIFY IS THE NEW RADIO....

And now Radio wants to be the new Spotify. Saw a report earlier this week where a number of stations want to renegotiate rates with ASCAP, BMI etc. to bring them in line with Spotify-type deals. I think they're starting by going after SESAC, because its newer and doesn't have the resources to fight as hard.

 
Mon, Nov 12, 2012 - 4:28PM
Roxanne said about this:

This just in: http://online.wsj.com/article/SB10001424127887324894104578109482459713880.html

Spotify Nears Financing at Over $3B Valuation

I need to understand why anyone thinks Spotify can't afford to pay better royalties to artists. The labels are sponges here, too.

 
Mon, Jan 7, 2013 - 12:39AM
Brad said about this:

Looks like I'm late to the party here, but I think Gemzub is getting closer to the heart of the issue...it's a conundrum of supply and demand not being able to work themselves out on their own.

Now, there are more sources of revenue that flow into the equation like sponsorship/ads and touring/merchandise revenue, but ultimately, when it comes to Spotify, there's only so much people are going to be willing to spend on entertainment per month, because although people love their music, they're not made of money. So there's a limited income stream, and yet there's an unlimited supply of listens delivered to users. How in the world can you establish a fair price? Or an even more daunting question: if a fair price is established, will it result in any artist being paid a decent amount to live off of?

Normally, the law of supply and demand would work this out naturally without our need to speculate, but the fact that supply is infinite has made things complicated.

It would seem that there isn't a good way out of this other than for there not to be so many artists who get compensated a good amount for their work, which makes me sad as a young singer/songwriter just starting out...but I guess that's just the world we live in.

 
Wed, Jan 9, 2013 - 10:21AM
Courtney Croft said about this:

PlaylistHQ is a recently developed yet ingenious site, powered by Songkick, that allows users to create YouTube and Spotify playlists while also finding nearby concerts. Songkick is a website that provides news about live music and concert schedules. Songkick scans its members Itunes library to determine what artists and types of music the user prefers, and then generates a list of upcoming concerts in the user's area.

Most people don't have time to sit around and look through music all day, searching for their favorite band's newest songs. (Even though most of us wish we could). PlaylistHQ's biggest draw is that it does this for you. Simply choose a location, select a concert, and the site generates an entire playlist for you. Not only does this save time, but it introduces listeners to great songs they may never have even heard. PlaylistHQ has the potential to expand artists' audiences as well as their listeners' music libraries, and I highly recommend it.

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