In the vein of "Full Disclosure", can we see how much this artist has made from royalties off CDs and digital sales as well, so we've something to compare against?
Also, for under 15,000 plays across a dozen or so separate platforms for an entire year, this doesn't seem too terrible. People aren't listening to the music very much, so why should a lot of money be paid to this artist? Just because they're Grammy Nominated?
I suppose an interesting comparison is the Gangnam Style video on Youtube, which has 2 billion views. If he had 2bn plays rather than 15,000 he'd have made $560,000, which doesn't really sound like that much to me considering Gangnam Style's the most viewed video on Youtube of all time. (I realise the revenue you'd get from the Youtube video is different).
views != plays anyways. Some viewers probably played Gangnam Style dozens of times. It's possible those 15,000 plays came from only 1000 people listening to it 15 times each, thus being comparable to only 1000 youtube views.
Basically, it's an apples-oranges comparison in more ways than just youtube ad revenue != royalties. The metric is different as well.
Of course, your basic point that 15,000 is big number, which should probably be worth much more than 5 bucks, still stands.
That sounds like a ton of money given that it doesn't even begin to represent the amount an artist could make when you combine that with live performances and rights for it's use in movie or TV.
I suspect otherwise. We'll never know how much the record company makes (Hollywood accounting), but there's no reason to believe they're giving him half the take. I'd be shocked if he even got 10%, it's probably more like 3%. And they're not just getting 97% of his, but 97% of everyone's.
We'll never know how much the record company makes
But he said that he's the label as well and he included that statement in the post. The total was only a little over twice as much as he was paid as the artist.
I did read the article. In the past few years I've ready many other articles on the subject as well. Do you know anything about how any of this works?
We do not know what the record company makes off of this, their standard accounting practices ensure that most bands never make any money in royalties, period. When they do "earn" these royalties, they are invariably some tiny fraction of the total profits.
How do they do this? They "front" the bands a service, which includes promotion and management and so much... and they get to decide how much this costs. But they don't disclose it to the band then, or afterward. This magic number then becomes how much the band has to earn before they start seeing royalties. And they get to calculate how much that performer has earned. And when various radio stations and MTV and whoever in the hell else pays license fees, they even get to decide how that is apportioned.
It's no surprise that most bands never pay that amount back.
But, if somehow someone does (they're so popular that gigantic lawsuits would ensue if the record company didn't do this), they still get a piddling fraction of the total sales.
Never mind that you get record company and record label mixed up... the latter is just a brand/logo to slap on the music.
And none of this even gets into how ASCAP and the like screw over indies who never sign with a record company.
It was a quarterly royalty statement, but I have to agree in principle. 15,000 plays doesn't sound like a whole lot across a large Spotify audience, which has tens of millions of members. That's just a random play of a piece here or there, not some kind of often-requested following.
The amount of paperwork required to keep track of this is more costly that the $4.20 cents or whatever of revenues. Even as a minimum wage worker, its not even worth it to bother. Why bother spending 30 minutes looking over this stuff and filing it for taxes? That is the sign of hugely dis-functional micro-payments model (unfortunately).
> Why bother spending 30 minutes looking over this stuff and filing it for taxes? That is the sign of hugely dis-functional micro-payments model (unfortunately).
It may also be a symptom of compulsory fees imposed by a third party.
But companies like Pandora and Spotify aren't profitable even at these numbers. If this artist made 10x as much, he'd still be upset at only making $40 for 14,227 music plays and these streaming companies wouldn't be able to function. This is also a barrier to entry for new startups that want to offer music streaming.
There doesn't seem to be a number that artists would be happy getting and that music streaming companies could actually offer them.
Artists who look at these services as anything but free advertisement for themselves so that they can get media sales, increased concert attendance, or notoriety that can translate to other gigs (like Armen Chakmakian who claims that his real job is writing music for television) are going to be perpetually disappointed.
That point gets brought up to imply artists are in the wrong, when it actually supports that Pandora/Spotify are in the wrong.
Pandora/Spotify are debt-financed. They literally cannot afford to offer their services at the royalty rates they are paying now, and are pressuring musicians to take less.
You can definitely create a service that is popular with consumers if you are debt-financed (see Napster 1.0). That doesn't mean that the service should exist, or that the songwriters should make financial sacrifices to make the service viable.
If artists think that (immensely popular) streaming services are worthwhile, then they're going to have to accept lower royalties. These legal streaming services are responsible for as much as an 80 percent reduction in music piracy. If artists kill off these services, then they better be prepared to accept the rampant piracy of the 2000s.
I'd be interested to see whether it works out better for the artists if they were to remove their music from streaming services but offer it free to download on their website one change for an email address. If they have to make money through merch and concerts then a direct line of communication to their fans might be better than the pittance they receive from streaming.
I'm just surprised Spotify hasn't done more to let artists create brands. I'm imagining something like Facebook pages, and you have a custom newsfeed on your home page that artists could post to including stuff like "new t-shirts are available" and advertising concert tours. It could be based on who you listen to the most/recently instead of explicitly following people.
Apple's Ping tried to do that stuff, but it was a massive failure due to other reasons (everyone hates the iTunes app).
I think artists need to consider streaming as advertising. It's a good way for your music to be discovered by users looking for new music. If you remove your music from Spotify et. al. then you'll be missing out on new listeners.
With fewer and fewer people downloading music these days, I'm not sure how valuable free downloads even are as promotion any more.
As far as I know (at least that was the case ~2 years ago) Spotify would be profitable if they chose to, but reinvested as much as they could into a higher market penetration insetad.
The prices put down during the pirate bay trial, it was claimed that artists lost between 20-30$ per watched performance.
So 14 thousands performance is almost a half million dollar lost of revenue, stolen by those streaming services. Worse, they claim its all moral and legal.
$20 or $30 per performance? Is that what they're making off of each YouTube stream? That's a ridiculous claim. Back in the pre-digital era like the 90's singles were $9 for a CD single. And those usually came with 3 songs, even counting for inflation I don't think that math adds up, and that's for purchasing a song.
$4 for 14k performances of a streamed song seems totally reasonable to me. If you own the song 100% then charge more.
The "$20 per performance" number, and your math, sounds just about as intellectually honest as the case where RIAA claimed damages totaling more than the world gross domestic product [1].
Is a streamed/recorded song really considered a 'performance'? Isn't it just one performance? If one performance is recorded and replayed 14k times, how does that turn into 14k performances? I must be missing something...
The prices put down during the pirate bay trial, it was claimed that artists lost between 20-30$ per watched performance.
We're talking about streaming audio over the internet, though. I don't think one listen of a song brings in $20 in revenue (advertising and subscriber fees).
Seems to be a disconnect where Chakmakian sees one Spotify/Pandora play as equal to a radio station playing a song when they are entirely different things. 14,227 listeners is less than some college radio stations playing a song once. But you won't see an article complaining about how little musicians get from college radio stations.
Glad to see someone mention this. A quick calculation using the listener formula from (http://www.radio-media.com/song-album/articles/airplay66.htm...) says his cumulative 3 month total is equivalent to a single song play on the top station in Indianapolis, IN. Or equivalent to 0.6% (6/10 of a percent) of the number of simultaneous listeners from the top station from every market across the country. At the Pureplay rate of $0.0021 per play, he'd receive $4971 for the same number of plays as his song being played just a single time on the top radio station in every US market. It's not the fault of streaming music services that he made so little, it's just that his music isn't listened to by many people over a 3 month period on those services.
Depends on the size of the Uni, and more importantly the surrounding city. Big Uni in a big city, that's easily doable. KEXP in Seattle would be one example.
I guess it also depends on one's definition of 'college radio'.
At first I was thinking "$4 for 14k plays sounds pretty good!", but then I did a little math.
If I listen to a streaming service for 10 hours a week (seems like a plausible average?), that's about 800 songs per month. So I'm probably paying in the range of a penny per song listened to. If I played 14k songs, that's $140. So only 3% is going to the artist[1], which does actually seem fairly low.
To put it another way, he's making the same amount of my subscription as the credit card company is.
1 - We have no idea how much he's previously been paid via advances, etc.
My initial thought is the amount going to artists with volume like The Rolling Stones, and Bieber (or whatever the kids are clamoring for these days) must command a much higher rate per listen presumably shifting the total percent going to artists to be much higher than that.
His $4 number is misleading. You have to look at both his BMI and SoundExchange statements. The webcasting Pureplay rate was $0.0021 per play for 2013. 14227 plays is about $30.
He may be Grammy nominated but that doesn't mean anything. 14,000 plays isn't very much at all. I've seen unsigned indie artists with more plays. The amount of $4.20 also strikes me as a little strange. I've had music on streaming services and the payout is generally around $0.002 per stream. $28 isn't much better than $4 but it's significantly more.
His problem seems to be that people aren't listening to his music anymore, not that he's getting screwed on payments.
No offence to the guy but 15K listens isn't a whole lot. I would imagine many other content authors would struggle to make any money with that kind of popularity.
Also did he think that the problem isn't streaming services though but the demographics those services have ? They are clearly skewing younger. I would be curious to see his royalties from CD and iTunes sales.
I can't even count how many nominees there are on that page. And that's just for 2014.
I have friends who play in various bands every other week in front of live audiences and guess how much they make?
It's in the range of ~$20 each per night. And that's for about 6-7 hours of "work". Or about ~$3 per hour. "The horror! They are certainly getting swindled!" I can hear you shouting now.
They have to load/unload all of their equipment into a van which takes about an hour. They have to spend $20 or $30 driving their gas guzzler to/fro the bar that's booked them for the night. Spending another hour in travel time as you don't want to take any sharp corners or hit any pot holes with $5,000 worth of musical instruments in the back. They spend about an hour setting up their equipement themselves, testing accoustics and such. And then they play for a solid 3-4 hours. For $20 compensation. Oh, and I forgot that they also get together and practice for about 8 hours every week on top of that.
But that's O.K. because they all have full time jobs and they just really love to write and play music for people.
That's why you should be making or playing music imho, for other people's ears and your own enjoyment. Not to write a few diddy's in the hopes of making a killer profit.
I think there is a disconnect between what an artist might expect to receive and what a listener would actually pay.
Even before streaming radio became the standard way of listening to music, people didn't pay every time they played a song. They paid for the rights to listen to it as much as they wanted, but they only paid that once.
Now that we have streaming, consumption is different, and artists actually get paid per listen. They can't expect to get the same amount per listen that they got per song on a CD years ago.
You really shouldn't get into music for the money, because there isn't money anymore. The fact that there was money ever was a blip on the radar due to new technology allowing an industry to explode. Technology continued on though, and made the scarcity of music artificial.
I recall a blogger I follow writing a book (10? 15? years ago) and asking people who were buying it to use his Amazon referral link. His affiliate payment on each sale was higher than his royalties.
I'm not sure if it's completely standard, but my royalties have always been 10% of wholesale (which usually works out to about 5% of retail). Amazon will pay out 5%-10% referral fees depending on the item and how good an affiliate you are. Also, you can often earn royalties for other items bought in the same session, so Amazon could well be a lot more lucrative.
I've always hated paying for music (CDs/LPs) before figuring out how much I'm gonna like it. I currently subscribe to spotify but dislike how apparently so little revenue goes back to the artists I love.
I've often thought on a revolutionary model to turn the music industry on it's head, from the current gatekeeper/distributer model (which tries to fight against the 'promiscuity' of digital content) to a 'charitable' model, whereby a non-profit, trusted organization accepts a periodic donation from me and distributes royalties based on my actual listening history over a period of time (which could be adjustable at donation time if I prefer to give my money to an all-time favorite artist, or conversely to a new artist I want to hear more from).
The trusted organization would be where I'd go to download my open-source, torrenting music player & music discovery apps.
For this to work, you'd have to reinvent how to attribute a piece of music to an artist properly, in my ideal world middle men would be cut out, and the money would go directly to the composer/performer. The hard part, but the key to making me want to donate.
Something like a Mozilla-run opensource p2p Rdio with periodic NPR-style fundraisers? Sounds good to me.
The problem as always would be with the major labels, they won't go for anything that weakens their control, but you could certainly start with an indie label alliance of some sort.
There's been a lot of talk here in Sweden about expanding the role of the existing collecting societies[0] to cover the internet as well as a way of being able to loosen copyrights. Currently they collect money from radio stations, stores that play music, concert halls etc and redistribute it to copyright owners.
My new startup is focused on lettings fans more easily get money straight to artists: http://saycheers.co - feedback encouraged
So many times I've been jamming to a track and really had such good will towards the artist and would love just to "tip" them some money, but alas had no way to do it. Now we're building that way.
My reply was a bit of a joke, because while in Europe it's normal to earn royalties off radio play (especially from businesses that play the radio), it's not an accepted practice in the US. Artists in the US don't make any money off radio play.
This whole transition period would be a lot less painless if artists and consumers would accept the reality of digital copying and its implications. Record companies already did way back when, and positioned themselves to profit off of non-ubiquity. Now that the ubiquity has arrived, they're just trying to keep their cash corpse alive.
It would be great if creators could be directly compensated as envisioned by copyright, but that is just not how our physics works out. Trying to pretend that's so just enriches (old or new) middlemen, who make money pennies at a time across thousands of artists, treating creativity as a commodity and devaluing it in the process.
The future is here but it certainly isn't Spotify et al, with token compensation based on token control. It's torrents with alternative methods of compensation - concerts, merchandise, kickstarter, donations, commercial licenses. Ignoring this is surefire exercise in frustration.
I don't know about everybody else here, but I would love to get a $35 quarterly check for software I wrote 10+ years ago just because 14k people used it.
Musicians somehow expect to write a song and get rich from it, sorry but only the best of the best have the talent to accomplish that. The rest, however, can make a decent living out of it.
Comparing Hearts Of Space to Spotify is a little silly. HOS charges a couple bucks a month to listen to streamed shows totaling a few dozen songs. They charge more for less music (They're really charging for curation).
And each "play" on the show goes to thousands of people, not just 1, as each Spotify "play" does.
Did Armen's royalty statement sheet list streaming, radio, or both? Curious if he gets the same whether I stream it on demand or whether I listen to a local affiliate broadcast on the radio (?)
What would the artist lose if he removed his work from the streaming catalogs? I wager he'd lose more than $4.20.
How much is worldwide exposure of your work worth? How about the analytics of who is listening to your music and where?
I'm a former pirate of music but today I'm doing my part paying $20/mo to Rdio for my family's music-streaming. Would you like to go back to those bad ol days where you got nothing at all, no money and no analytics?
How many would have bought an mp3 but didn't because they could hear it on the station? How many went out and actually bought the mp3/cd because they discovered it on the streaming station? How many went to a concert of the artist after discovering them on this. We don't know these.
It's possible that the artist has actually made more than the statement amount if people went out and bought his material after discovering it on streaming. Or maybe not. But back when CDs were the only real option, I remember buying many, many CDs for only one or two songs and being extremely disappointed with the rest of the album. As a consumer, I believe I grossly overpaid for music when CDs were the norm. Just because an artist could make X amount before internet radio doesn't mean they should be making X amount now.
Those are good questions but they don't necessarily support the conclusion that streaming is a net financial benefit to the songwriter. I did the back-of-napkin math once, and came up with this:
If a single fan would listen to your mp3 around 1000 times or more, you hope the fan will stream your mp3 rather than buy it, as you'd make more money that way. Otherwise you hope they will buy it.
As for the "discovery" benefit of services like Spotify, you have to factor in that Spotify also robs paid downloads. Why would someone download if they can stream from Spotify? So, in order for it to make sense, you have to ask if the benefit in music discovery makes up for the cost of losing album/download sales. That's a much higher bar than to just hand-wave and say "Well I buy some stuff I discover on Spotify!"
This comes up every few months and this line usually gets people fired up and angry at streaming services:
> Notice one performance of “Ceremonies” or “Distant Lands” streaming radio show like Hearts of Space that brings in 26 cents for the full writer’s share compared to 2,088 performances of “Gypsy Rain” on Spotify that brought in a total of 60 cents.
Spotify "performances" are (probably) going to one or two people each. Radio or live performances go out to hundreds up to many thousands of people.
Now pull your music off Spotify and get a YouTube account so you can turn those impressions into a $2 - $10 CPM
If this is such a horrible deal for him, is he for some reason prevented from pulling his music from these services and selling it on his own (or via other services) at a price that he deems more acceptable?
Artists are totally free to pull their music from these services. Popular artists like Adele and Coldplay have notably kept their music off streaming services, and still sold enormous amounts of recordings.
I feel like there was supposed to be a point here but I missed it. A guy captures a tiny fraction of 1% of the plays of 10s of millions of internet music listeners and expects lots of money? Of Hearts of Space pays better than Spotify and Pandora? (does it? how many listeners do they have?)
I think people just see big numbers and expect big money to follow, but when you have millions of people that can just graze songs or songs are delivered to them passively, you need an extremely large number of listens to make money.
If I had a website that got 14k visits in a month, would I expect to make a living from it? (genuine question. my personal website doesn't get 14k visits a year, let alone a month)
Depends on the traffic. You'd starve with 14K visitors for cat pictures, but could make a very healthy living of 14K visitors who want to buy home insurance or remortgage their house.
How do these digital services compare with radio? For example, if a radio station plays your song and 1,000,000 people hear it, do they pay you more than 1,000,0000 individual Pandora plays? Those numbers on your statement are for much smaller audiences than regular radio.
Given subscription rates and general numbers of subscribers compared with the payouts to artists I'd say there's a lot of money to be made in streaming music, just not if you're an artist.
Who is making any money in streaming music? It's certainly not the service providers. Neither Pandora not Spotify are even profitable. Nearly all of their revenue is eaten up by the royalty payments they must pay record labels.
Or, the current payment system used in streaming music...
I saw a proposal once that I really liked, instead of having all money go into one large pot, and have that distributed among all artists based on the total number of plays, have each subscriber's money distributed out by the songs they listened to.
Basically, instead of having your money combined and split with everyone else for all artists, it goes only to the artists you've listened to, and with amounts based on your listening habits, and not the collective habits.
This is a strange proposal. Assuming everyone paid a fixed subscription fee and listened to the same amount of music each, the artist payouts would work out exactly the same.
In practice people vary in their usage of these services. Basically the artists you listen to would get paid more per play if you didn't use the service much. (i.e., if I only fired up Spotify once this month, listened to one track, then the artist gets my full $14 for one play)
I don't think that's true on the payouts front (I'll get to that in a second).
Yes, if you listen less, the artist you listen to get more. Which I don't think is a bad thing, because theoretically using the current system if everyone listens to less, all the artists get more per play.
This system, while not perfect, gives your money to the artists you listen to and support, as opposed to helping give lots of money to artists you probably couldn't give a damn about.
----
As for the payouts, I don't think you did your math...
Example:
Person A listens to four songs by Artist 1.
Person B listens to five songs by Artist 2.
Person C listens to two songs by Artist 1, and four songs by Artist 2.
Assuming that $10 goes directly to the artists from each listener, in the huge pot system, artist 1 is played six times, and artist two is played nine times. Artist 1 gets $12, and artist 2 gets $18.
In the individual distribution, artist 1 gets ~$13.33, and artist 2 gets ~$16.77
I think that matches what I was trying to say. In the individual distribution, Person A prefers Artist 1 and his listens are worth more because he used the service less.
I'm not saying this is worse necessarily, I'm just not sure why it's better.
I don't know that their listens are worth more or less, but I think that it's arguably more representative of an individual consumer's choices (I hate that I just used that phrase...).
I might hate an artist you listen to, and don't think that any of the money I put down should go towards that artist. Similarly, you might hate an artist I listen to, and don't want any of your money going towards them.
In regards to worth, I think a better measurement would be percentage of a user's listens, as opposed to number of listens. While the percentage is based on the number of times they listened to an artist, looking at the percentage only somewhat weakens the argument based on someone listening less being worth more. That argument doesn't really hold with me because you can get the same payment numbers by just multiplying all artists by the same number, and while each individual play is worth less, the artists are still getting the same payout.
Basically I think an individual distribution is superior because .. wait for it .. it's more representative of each individual's listening habits over the collective's habits. Because of this, there's a large potential for smaller, less recognized bands to make more money, because they're paid for the percentage of times the people who listened to them listened to them, as opposed to the percentage of times EVERYONE listened to them.
The music site Magnatune (http://magnatune.com) does that.
They split your money into two piles, one for downloading (you can download anything you want) and one for streaming.
While I don't know exactly how magnatune works, what you've described is completely different from what I've said, unless your streaming pile is distributed only among artists you streamed, and not put together with everyone else's money and distributed among all artists.
Having just superficially perused Magnatune's info pages, I couldn't find anything specifying how they determine the amount given to artists, other than 50% of it goes to artists, and the other 50% goes to Magnatune...
If I like something, it is in my library. There is not that much good music out there, maybe 3 or 4 albums each year these days. I don't see how a subscription could be cheaper than just buying those albums.
For you it isn't cheaper. For someone who listens to a lot of different kinds of music, and finds 12 albums (or even ~120 songs) a year that they like, it's about even either way.
It can also be rather convenient: you don't have to load up all your music on a device, and if you ever feel like listening to something new, it's really easy to find. But if you're only updating your music library three or four times a year, it's not a big deal.
You also probably didn't need to boot up a virtual machine every time you wanted to sync your phone... But that's a different problem.
Streaming services also typically have a radio feature, where you can specify a song and say "play more things like this". Which I've found is both nice on the "just give me something to listen to" level and useful for finding new music.
I appreciate the sentiment, and like to buy albums that really "click" with me. (not so much the one song at a time)
But I like internet radio to find those albums. Local FM radio plays a very limited selection, vs streaming where I can hear really cool albums from 5 or 10 years ago that I would have never heard otherwise.
That said, the author should probably consider streaming services as "advertisement", and try to sell recordings and concert tickets.
I guess it depends on where you buy the album and in what format. Last time I bought a CD it was still over $10, so anything that can give you variety at under $30/yr should be cheaper.
The other nice thing about a streaming service is that you may get exposed to something you didn't know you liked.
I was about to quote the annual Pandora One price as being less than the cost of 3 CDs, but evidently I missed where the annual option was nixed due to several increases in SoundExchange royalty rates.
Another factor is that the incremental cost of listening to something new is $0. When I'm looking for something new I just move the Mog radio slider all the way to "similar artists" and wait for something new/interesting to pop up and from there can explore their entire discography if I'm so inclined.
I can make you happy then, the last four albums I bought:
"So", by Peter Gabriel,
"Trouble Man", by Marvin Gaye,
"Impending Joy", by Algorhythmical,
"The Next Day", by David Bowie.
Given that 3/4 of these artists were active in the 1970s, and one has been dead for 30 years, I wonder if maybe you've considered that your musical opinions are not generally in line with those of the people who consume streaming music.
Also, for under 15,000 plays across a dozen or so separate platforms for an entire year, this doesn't seem too terrible. People aren't listening to the music very much, so why should a lot of money be paid to this artist? Just because they're Grammy Nominated?