However, the implication that an outsider might draw from your comment is that, say, the band that wrote the original post might hope to make those kinds of royalties since they (presumably?) wrote the melody and lyrics to the original song.
If they sign to a major label and have a hit that continues to rake in those royalties, that is wonderful. If one of their songs is used in a big Hollywood film, and for covers, etc, great.
But that's a lot of ifs. Even non musicians know the truth now, they've all read "Courtney Love Does the Math" on Salon.
The reality of most musicians, even those signed to major labels, is far from a rosy economic picture. It seems to me that to imply otherwise is disingenuous.
Didn't mean for that last part to sound like an attack, it's just that reading your (very well written) comment does not solve the problem of the musicians who wrote the original post.
I didn't mean to paint a rosy economic picture. Sorry if it came out like that.
I just thought people should know the difference between a songwriting royalty and a recording royalty, and what that means for songwriters and recording artists. I also want people to have an idea of exactly how big of a cut publishing companies and record labels take.
"The service may do a good job fighting illegal file sharing but it also does a great job of eliminating any motivation to buy an album that you can listen to through the service."
In Europe Spotify's been available for a while. I was in on the beta when their catalog was a lot more restricted, and it was already impressive. With the majors on board, it's hard to see the freight train stopping.
How can one reconcile how wonderful it is for consumers with the payment statements that make us musicians cringe? I think of it as all-you-can-eat iTunes for very little per month; the recent competitors/alternatives pale in comparison.
They deserve a lot of credit for building a workable model that makes iTunes look like a rip off (I hate that software).
But they further dilute the value of recorded music, which is a huge paradigm change for the music industry that will ruin the viability of many musicians.
Perhaps we can re-educate the public to value music again by taking a pledge to pay for it, à la pg-patents? Something tells me this new, 'recorded music ~ free' paradigm is here to stay.
To anyone who had a computer in the past 5 years, recorded music is not worth anything. Sorry, but that's just the way it is.
If you want to make a pledge to keep paying for buggy whips, go right ahead. I'm sure there are people who would argue that buggy whips have intrinsic value -- but the market for a buggy whip right now is basically nil.
Same thing with recorded music. If you want to make money as a musician, you don't make it through recordings, you make it through extortionate "public performance" licenses, by doing concerts (and selling $30 t-shirts), or by offering experiences that people can't get elsewhere (pay $50 a year and get access to my website where I post about my tour and post unreleased samples and occasionally mail you a trinket, or whatever.)
I also don't understand the undertone of righteous indignation at Spotify's existence. I can listen to the radio, where songs are played gratis. I can record those songs (legally!) for my own personal use as much as I want. The only difference with Spotify is that I don't physically push "record", and that's the kind of semantic difference only a lawyer would love.
> To anyone who had a computer in the past 5 years, recorded music is not worth anything. Sorry, but that's just the way it is.
It wasn't always that way, and it doesn't need stay that way either. If no-one values the music, then maybe it will; if people do value music, then maybe it won't.
> I also don't understand the undertone of righteous indignation at Spotify's existence. I can listen to the radio, where songs are played gratis
The difference is that radio play was used to promote albums, which people then bought. Recording a song on the radio came with many disadvantages: DJ interruptions, missing the start/end of the song, lower sound quality, no album art etc.
With Spotify, there's no need to purchase the album, as there are no such disadvantages, the whole album is usually online, and you can play songs whenever you want to listen to them, not when the DJ feels like playing them. This makes in less economically interesting to be an artist. The righteous indignation against spotify is probably due to the fact that artists actually make very little money out of their content, whereas the spotify owners are probably going to make a lot of money out of the artists' content.
I am actually trying to find it but there is a country in Africa that is having a worldwide day where all radio stations are encouraged not to play music, and to instead play talk radio and other educational broadcasting about the importance of copyright protections and the need to support the arts, specifically music. They believe by taking music away for a day and educating people about the impact their consumer choices are having on the artist community, they can start to create significant public awareness about this issue. I think it's a great idea.
Imagine Pandora's site down for a day: "Take this moment of silence to think about how important music is to you." That seems like a win for Pandora anyway, since they have a net loss of about $20,000 a day right now thanks to overpriced royalties.
I think one of the issues is not that file sharing has reduced the general perceived value of music to 0 and the best you can sell people now is convenience and ease of use which is what people are really paying for on things like Spotify rather than the music itself.
Spotify is such a rip-off for musicians; I love the way these guys highlighted that in a light-hearted way. But the economics of the alternatives are not going to make anyone rich, either.
For future reference: if you sign-up via CDBaby, there is a one-time fee of $35 (or $55 if they create your bar-code) and you are set-up with iTunes, Amazon, etc, without a yearly fee. Even though Derek's gone it's still a good deal.
Also, you should seriously consider contacting Magnatune. If they like your music you can be on all of those platforms for free. And John Buckman is a very nice guy. Et en plus il parle le français comme toi et moi.
Even though they look like ripoffs with their tiny payments Spotify and other subscription models have a few advantages for the artist over download models. For a start the artist gets paid even if the listener is just trying the track, hates it and never listens again.
The main advantage though is the open ended payment model. The OP should compare the 20 year revenue for each track. I listen to some tracks from 1996 every week and spent the period 1996-2001 listening to them multiple times a day. I'm not unusual (just getting old! :)
There are definitely albums I have listened to so many times that the streaming payments would outperform the purchases, but I've also bought some albums more than once, too!
Most people, and most albums, though, are not going to outperform those economics. Simply put, $5-10 a month for access to 15M tracks is a joke and a big loss for the industry. I look forward to the labels realizing it and walking away.
Basically, you're paying $5-10 for a maximum of 4800 songs - or, between $.001 and $.002 per track, if you listen constantly.
Or, from the other side:
Spotify's premium is $10/mo, which comes with no ads. They pay $.003 out to each band - let's just pretend they follow Amazon's 'agency' policy of a 70/30 split, so Spotify's making roughly $.001 on each song, and it's costing them $.004 total for that song (hypothetical - just stick with me). If we assume they're not losing money, then an average $10/mo user must listen to at most 2500 songs per month, and if Spotify's costs are higher than $.001 per track, the number goes down.
Point is, the industry's providing _ACCESS_ to 15M tracks, but they're only having to deliver ~2500/mo - but that's a different bundle of 2500 songs for each user. It MAY make sense from their end just to call it 'unlimited' and rely on the fact that the user can't consume music fast enough to really upset the economics for them.
(Incidentally, if you were to decide to listen to each of those 15M songs once, you'd wind up paying:
15,000,000 Songs * 3min/song = 45,000,000 min
45,000,000 min = 750000 hrs = 31250 days ~= 1027 months
1027 months * 10/mo = $10,270
The record labels, then, value their entire collection of music at $10,270 - if you only listen once!)
I am not sure how I feel about the first. On the second, it's very different. You don't get to pick what you want to hear, when you want to hear it. So, you discover something new on the radio, if you want it, you go buy it. You don't just sit and wait for it to come on again. With Spotify, you hear something you like, you have no reason at all to support the artist with a purchase, and you'd have to listen a ton of times for them to make any money.
Fair enough, I've bought albums several times (vinyl to cassette to CD to MP3). Don't think I've ever bought an album on the same format twice unless it was by accident. But haven't we all had it with those format switch games? I bought some MP3s, I don't expect ever to buy them again.
BTW, most of those 15M tracks are deep in the long tail of obscurity that would never see the light of day without an all you can eat subscription model.
I have re-bought CDs I lost, or albums that got scratched that I loved, or given my copy to people who I wanted to become fans, and then re-bought my own copy.
As for those buried tracks, keep in mind that it's unlikely that Spotify will cut anybody a check for $0.029, or even 10 times that amount. So unless those albums get listened to a lot, they're not any better off in Spotify.
This was a witty comment (the end made me chuckle)...but flippant.
Ultimately it is not very helpful: it does not address the content of the original article, which is excellent.
It is easy to fall into the trap of being so skeptical of sales writing as to automatically discount it. We see a lot of that here on HN which I find to be an unfortunate knee-jerk reaction.
Sales is a skill. During a layover I bought a book on the 'business' shelf of a UK airport. The book had tons of the warning signs of #2 above. I was extremely skeptical. It was called 'Selling to Win' by Richard Denny. It had the cheesiest cover you can imagine (think citrus green with pink).
But the things I learned in that book allowed me to get to 'ramen profitability' in my field. I was ahead of the crowd 6 months later, largely thanks to the techniques in that book.
Had I dismissed the book, I'd still be making fun of the cover and complaining about not having enough work.
But that is a fairly small subset of people with the talent set necessary to stand out musically.
The security of the previous set-up is gone but the opportunities are endless.
Does this sound familiar yet?
A generation ago many of the people reading this would be lifers for HP, IBM...now look what you're doing instead?
OK, so you're lifers for Google and Facebook.
You get the point, though.