I’m listening to Spotify while I write this. I’ve been a premium subscriber since early 2010, which means I’ve so far paid spotify £390 of which around 70% has gone to the artists. It took me a while to get used to the idea that i didn’t “own” the music I was listing to, but the benefits of being able to listen to anything I wanted to, whenever i wanted, and the chance to discover new music made up for it and I now believe that as long as streaming services exist, I’ll never buy a CD again. I won’t bang on about how great it is, because you’re generally either into streaming or not, and that usually depends on how you listen to your music.
There’s a lot of bad press about streaming services and the supposed bad deal that the content creators (artists) get paid from it. Atoms for Peace pulled their albums from Spotify and other streaming services, with band members Thom Yorke and Nigel Godrich criticising these companies for business models that they claimed were weighted against emerging artists. I disagree. Anyone that thinks they can create some music and make a living from it using streaming services is living in a dream world. The music business has changed, and for the better in my opinion. Gone are the days when a band could release a CD, sell hundred of thousands or millions of copies and rake in the big bucks (but don’t forget the record labels and other third parties taking their lion’s share). Some people compare streaming to that old business model, and that’s where it looks like the artists are getting a worse deal, but it’s not a fair comparison.
Musician Zoë Keating earned $808 from 201,412 Spotify streams of tracks from two of her older releases in the first half of 2013, according to figures published by the cellist as a Google Doc. Spotify apparently pays 0.4 cents (around 0.3p) per stream to the artist. When artists sell music (such as a CD), they get a one-off cut of the selling price. When that music is being streamed, they get a (much smaller) payment for every play. Musician Sam Duckworth recently explained how 4,685 Spotify plays of his last solo album earned him £19.22, but the question is just as much about how much streams of the album might earn him over the next 10, 20, 30 years.
If you created an album yourself, and you had a choice between two customers – one who would by the CD, giving you a £0.40 cut, and one who would stream it, providing you with £0.004 per stream, which customer would you choose? Part of this actually might depend on how good you think your music is, and how enduring its appeal will be. If it’s good enough, and al the songs on that album are good (all killer, no filler!), then it’s going to get played a lot, making streaming more lucrative over time, but if it’s poor, with only a couple of decent tracks, and maybe not as enduring as it could be (think Beatles vs One Direction), then a CD is going to be more lucrative, because after a year or so that CD is going to be collecting dust at the bottom of the shelf never to be played again.
I can’t easily find a way to show the number of plays per track in my spotify library, apart from my last.fm scrobble stats, which won’t be entirely accurate as they only record what I listen to in online mode, but I’ve pasted the top plays per artist below:
The Gaslight Anthem (621 plays)
Chuck Ragan (520 plays)
Frank Turner (516 plays)
Silversun Pickups (425 plays)
Biffy Clyro (305 plays)
Ben Howard (302 plays)
Sucioperro (241 plays)
Eddie Vedder (225 plays)
Blind Melon (173 plays)
Foo Fighters (166 plays)
Iron & Wine (141 plays)
Saosin (121 plays)
Benjamin Francis Leftwich (119 plays)
Cory Branan (116 plays)
Twin Atlantic (112 plays)
Kassidy (101 plays)
Funeral for a Friend (94 plays)
Molly Durnin (89 plays)
Crucially, of the 18 artists above, at least 4 or 5 are artists that I discovered on spotify. The radio and “discover” tools on it are actually really good (90% of the time), and of those 4-5 discovered artists, I’ve seen two of them live in the past year or so. If we stop trying to think in pure instant revenue terms, streaming services provide a great part of a business model that includes long term small payments to artists and allows consumers to discover new music more easily.
Artists need to build themselves a business that incorporates records, songs, merchandise and/or tickets, and look for simple ways to maximise all those revenues.
Crucially, they also need to start developing premium products and services for core fanbase – fans who have always been willing to buy more than a gig ticket every year and a record every other, but who were often left under-supplied by the old music business. Which is why, for artists, the real revolution caused by the web isn’t the emerging streaming market, but the boom in direct to fan and pre-order sites.
Frank Turner believes we may eventually move towards a model where all music is free, but artists are fairly compensated. Talking about piracy and torrenting, he says: “I can kind of accept that people download music without paying for it, but when the same people complain about, say, merch prices or ticket prices, I get a little frustrated.” “I make the vast majority of my living from live, and also from merch. Record sales tick over.”
If you look at Frank Turner’s gig archive, you’ll see he’s performed at almost 1500 live shows from 2004 to 2013. Most of the musicians I know do what they do because they love playing music, and particularly so in front of an audience. I personally believe that live music should be the core of any musician’s revenue stream, with physical music sales, streaming, merchandise, advertising, sponsorship, and other sales providing longer term revenue. Frank seems pretty hot on spotify, and has released a live EP exclusive to the service.
I also believe the format of live shows will change too. I love small gigs in dark little venues such as the Rescue Rooms in Nottingham, but as artists become more popular and play larger venues, there is naturally some loss of fan interaction. With the use of mobile technology, social networks, and heavy duty wifi (802.11ac for example), large venues can begin to allow the artists to interact with fans and provide a more immersive experience. Prior to or while the artist is on stage, content can be pushed to the mobile devices of those in the audience, telling them what track is being played for example, with links to download or stream it later, provision of exclusive content such as video and photo, merchandise, future gig listings, and event the ability to interact with other fans in the venue or otherwise.
The future is a healthier relationship between services like Spotify and musicians, where both can find more ways to make money by pointing fans towards tickets, merchandise, box-sets, memberships, crowdfunding campaigns such as songkick’s detour, and turning simple concerts into fuller experiences for fans.