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May 23, 2012

Spotify and streaming music: a black hole for artists

Spotify's Australian launch makes the Australian music streaming market even more crowded. But what does it mean for recording artists? Industry analyst -- and band member -- Andrew Harris reports for Technology Spectator.

Spotify’s Australian launch makes the Australian music streaming market even more crowded. Paris-based Deezer launched in Australia in April, and MOG will bring its streaming service to Telstra subscribers in a couple of weeks, joining Rdio, Rara, Sony, Microsoft and JB Hi-Fi offering unlimited all-you-can-eat music to computers and mobile devices for a fixed monthly fee of between $8 and $15.

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8 thoughts on “Spotify and streaming music: a black hole for artists

  1. andrew

    Publishers screwing Artists to maximise their share of the profit.

    The more things change, the more are they stay the same…

    As problematic as it may be, the answer may be lie in developing an effective way to self-publish and avoid dealing with the majors (at least until you have some negotiating leverage).

    The industry has spent the last century building frameworks and legal protections for the publisher. At least it is now financially and technologically feasible to self publish and take advantage of that.

    You’re then just left with a marketing and business model problem as a self publisher. Which is no different to any other small business.

    And that’s when you begin to fully understand that it really is a rich mans (company’s) world.

  2. Kelvin

    I can’t disagree with any of the facts stated in the article but I can’t help but feel as though the consumer shouldn’t be put in a negative light for using these legitimate services just because the artist is not being properly rewarded for their work.

    Isn’t this more to do with the contracts that bands sign with record companies?

    I agree with Andrew that now, more than ever before, has it been easier to self publish and be independent. Goyte and John Butler Trio spring to mind as immediate examples as successful independent artists.

    The diversifying of all these streaming services means more channels that up-and-coming and established independent artists can have their music heard. Especially when a lot of these services contain social apps. It also means the cost of distribution is reduced to essentially zero.

    The record labels are out to screw you over, don’t blame the (legal) consumers for that.

  3. Barvardage

    Tell it like it is, Andrew!

    btw, Gotye is on Universal.

  4. Audio Azur

    I think your calculations might be incorrect. iTunes aren’t that generous
    You are correct that for a US$0.99 track Apple takes 30% leaving 70%
    However the remaining 70% doesn’t go directly to the artist it goes to the label. The actual royalty isn’t 70cents but more like 10cents.
    So if the artists earns 0.00393 cents per stream their song actually only needs to be streamed ~25ish times to generate the same amount of money.
    Unless that 0.00393 is just what goes to the label and the artist themself gets even less…
    The point is though, even through legal iTunes sales, the artists aren’t earning that much.

    I love Neil Young’s statement. I for one think the quality of music has been much stronger in recent years because of piracy. Now instead of listening to the radio where you are told who or what the next greatest track/artist is, many enthusiast actively seek out music and listen to things they would never have purchased (or heard on radio). I have fallen in love with music that if I hadn’t pirated I would never have listened to. And where does the artist earn their money? Live performance. (and maybe through use in ads, movies and TV shows)
    Good artists will still earn money, just not their labels
    Gotye’s song sweeping the world is a perfect example of this. I am positive he is earning a lot from his song – not all through sales but from sell out shows.
    Gotye’s song sweeping the world is a perfect example of this. I am positive he is earning a lot from his song – not all through sales but from sell out shows.

  5. Stevo the Working Twistie

    The majority of suits in the music industry are there for the wrong reasons. Some may have been bright-eyed once upon a time, but by the time they make the boardroom it’s all about the percentages. Seriously guys, if you wanted to deal in commodities why didn’t you get into a commodities business? One pork belly is pretty much the same as the next, they don’t have tantrums because they aren’t top billing and most importantly they don’t expect a cut of your take.

  6. Andybob

    As Kelvin says the devil seems to be in the contracts the artists have with the music publishers and associated record companies.

    The raw material of the music industry is not music, its people. They pop up, inspired by talent, naive and unadvised. They sign anything in order to get a break and then regret it when/if they succeed. Typically they assign all their copyright in future works to a publisher associated with the record company which is a member of the collecting societies who cut deals with Spotify and the like. Rarely does an artist get the commercial clout to renegotiate. Depending on the terms of their contract they may be able to terminate it as regards future works.

    The power of the back catalogue is enormous. The only time a competing society has really been able to establish itself was when Broadcast Music Inc (BMI) rode the waves of radio and country music in the 30s to compete with ASCAP.

    Perhaps it could happen again with the internet. All it would take is artists signing up to an internet distributor before they cut their publishing deals.

  7. Meski

    You need to compare this with how much they get/got from traditional (cd) markets. It should be more.

  8. JimDocker

    I subscribe to Spotify.

    When I hear of a new artist that I may be interested in, I do a search and have a listen. If I like what I hear, chances are I will buy the CD. So the stream of the music has made money than just the one third of a cent.

    Some artists I have listened to but decide that I do not like it enough for me to buy. They get one third of a cent for me doing the equivalent of going into a record shop and listening to a CD on headphones prior to buying like I have done for decades, for free.

    In fact, I just earnt the author and his band one third of a cent by checking them out. Not my cup of tea to be honest and sadly, I shall not be rushing out to buy an album, but I have been exposed to them now and probably would not be otherwise.

    Kris Kristofferson is doing ok out of me today though. I am listening to his stuff at work and I already own every song on CD at home. It is just convenient to listen to whatever I want depending on my mood at work without bringing my 1000s of CDs to work.

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