Spotify CEO Daniel Ek Says...

[The Walrus]

Spotify is 9.99 USD a month for me.

Another wrinkle in all of this. I’m probably not the only one here who has built up a large portion of their music collection buying used CDs. I’ve never felt particularly bad about it, but it’s not much different from streaming. Someone acquired the rights to the product and then legally is selling it without the artist getting a cut. There are some artists who I’ve gone on to really love and support because I was able to find them for the (relatively) low cost of a used CD. At the same time, I’m sure there are many who have never gotten any money from me despite me having and enjoying their music.

Yeah same... a ton of the CDs in my collection are used. Even some from the last several years, not just older stuff. But my favorite bands ever... Toto, GnR, Stratovarius... I think I only ever bought Toto and GnR's last albums brand new, every other CD was used. Stratovarius I only bought the last 4 albums on release day. And according to a certain douchebag metal singer, it doesn't even matter if you bought the CDs after the first 2 weeks, you might as well pirate them because the sale doesn't amount to jack shit. So from his perspective, the only way your purchase even helps the artist is if you buy it right away at launch lmao.

[goo-goo]

The main issue is the payout rate.

Spotify's rate is less than a penny and most of the streaming sites have similar rates. I think Tiday has the highest royalty and it's closer to a penny.

Radio (depending on what type of radio station: college, commercial, classical) typically paid between 6 and 15 cents per play. So the difference is huge.

For 10 plays, you can actually get up to $1.50 for radio play. For streaming, those 10 plays, will get you 3-4 cents (0.04 USD). There's two orders of magnitude in difference. That's a lot.

Under the same rates, the established artists will still get paid more with radio play vs the new artists. But at least you would still have a chance of making it if one of those songs ends up being a hit (or at least getting SOME income). With Spotify, there's basically no chance.

The real debate is why is Spotify (and the rest of streaming services) are not treated like a radio station (payout wise)? Because legislation is outdated (pretty sure lobbyists try to keep it this way for record labels and streaming companies), streaming payout rates are flawed, among other things.

One of things I learned from reading Devin Townsend's book is how he learned from Steve Vai to always own the rights (masters) to your music. Don't give it away to the record labels. Just do distribution deals. That way you can do with your music whatever you want (reissues, remixes, all types of royalties go to you, etc.) and you just pay distribution and manufacturing fees. Everything after that ends up being your money.

There's a great graphic on how Periphery makes money. It's very interesting on how they have evolved and have made it financially speaking. I have to dig it up but basically they don't rely on streaming or music but have their own companies (get good drums, horizon devices, horizon strings); royalties from endorsements, merchandise, touring, some clinics, producing other bands, etc. It's a big tree diagram showing everything they do.

[erwinrafael]

The main issue is the payout rate.

Spotify's rate is less than a penny and most of the streaming sites have similar rates. I think Tiday has the highest royalty and it's closer to a penny.

Radio (depending on what type of radio station: college, commercial, classical) typically paid between 6 and 15 cents per play. So the difference is huge.

For 10 plays, you can actually get up to $1.50 for radio play. For streaming, those 10 plays, will get you 3-4 cents (0.04 USD). There's two orders of magnitude in difference. That's a lot.

Under the same rates, the established artists will still get paid more with radio play vs the new artists. But at least you would still have a chance of making it if one of those songs ends up being a hit (or at least getting SOME income). With Spotify, there's basically no chance.

The real debate is why is Spotify (and the rest of streaming services) are not treated like a radio station (payout wise)? Because legislation is outdated (pretty sure lobbyists try to keep it this way for record labels and streaming companies), streaming payout rates are flawed, among other things.

There is a big difference that you did not consider. Yes, radio stations pay bigger per play but you have hundreds or thousands of individuals listening to that play. In Spotify, you get paid for every individual listener. Based on the numbers you gave, a song stream by 40 individual listeners can match one song play on radio. If that radio station has big reach, the artist actually gets less on a per individual listener basis.

[Lonk]

The main issue is the payout rate.

Spotify's rate is less than a penny and most of the streaming sites have similar rates. I think Tiday has the highest royalty and it's closer to a penny.

Radio (depending on what type of radio station: college, commercial, classical) typically paid between 6 and 15 cents per play. So the difference is huge.

For 10 plays, you can actually get up to $1.50 for radio play. For streaming, those 10 plays, will get you 3-4 cents (0.04 USD). There's two orders of magnitude in difference. That's a lot.

But see, here is the difference. Let's just pretend that a radio play is heard by 1000 people, that is still the same payout of 6-15 cents. If those same 1000 people went and listened to the song on Spotify, they payout would be $3-$4.

EDIT: erwinrafael beat me to it.

[goo-goo]

@erwin and Vmadera

Yes, you are right on both accounts. However, how was the streaming rate decided? There are factors that were probably never considered like inflation. Not saying Spotify and streaming services should payout the same as a radio station, but the streaming payout rates can be increased. Why haven't they?

Also, I didn't mention this but radio stations are also dying. The music business fallout is a combination of many factors: failure to modernize and embrace streaming properly by the record labels (they basically let other companies take over this, while they just sat on their asses and "negotiated"). Failure to negotiate rates, failure to treat AND develop artists properly, etc...I can go on and on. They never let artists give feedback on how to do this. Now, it's not only on the labels. A lot of artists didn't care about the business aspect and just let other people handle that. There's a reason why Petrucci, Rush, Steve Vai, Devin T, and many other artists decided to educate themselves and at least have a shot at making financially. That's why the Bandcamp model at least works for artists. But what if Apple decides to buy Bandcamp for 5 Billion dollars...You think Bandcamp is going to last forever?

If you don't educate yourself, you are going to get hosed one way or another (and that goes for most of the things in life).

[erwinrafael]

Of course because they want to profit. And I guess because Spotify has a risky model where people can actually listen to the music without paying a subscription. They just have to bear the ads.

[jingle.boy]

Like several others have stated, I primarily use Spotify for sampling, and save some albums that I might go back to a few times.  As individuals, our behaviour amounts to a drop of water in a lake.  But ultimately, if an act is making fantastic music that I want to hear more of, I'll buy the album (usually digitally - and from Bandcamp where I can do so reasonably priced... I'm not going to pay $15+ for a single album just to support an artist directly).  Ultimately, bands that I listen to have benefited more from me having access to Spotify, than those that have gotten screwed - no band/album gets saved on Spotify in lieu of me purchasing it.  If a band was gonna get my money, Spotify isn't intercepting my purchase of that.  What I have saved on Spotify is almost exclusively albums that I wouldn't normally purchase - because I'm not going to listen to it on multiple occasions.

Just this year alone, I've bout albums from Ad Infinitum, Confess, Shadowrise, and Gathering of Kings that I otherwise wouldn't have purchased if not for trying them out on Spotify first (and 11 albums from 2019 releases).  There will be more albums to come before the end of the year... I limit myself to purchasing about 25 albums per year, and usually make the bulk of those purchases at the end of the year when I know what to prioritize.

So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

[The Walrus]

Like several others have stated, I primarily use Spotify for sampling, and save some albums that I might go back to a few times.  As individuals, our behaviour amounts to a drop of water in a lake.  But ultimately, if an act is making fantastic music that I want to hear more of, I'll buy the album (usually digitally - and from Bandcamp where I can do so reasonably priced... I'm not going to pay $15+ for a single album just to support an artist directly). 
...
So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

Chad, while I'm generally in agreement with your whole post, I bold these two points specifically... Let's say the average album has, what, 10 tracks? $15 is only $1.50 per track in that case, is that really unreasonable? And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

[ariich]

Like several others have stated, I primarily use Spotify for sampling, and save some albums that I might go back to a few times.  As individuals, our behaviour amounts to a drop of water in a lake.  But ultimately, if an act is making fantastic music that I want to hear more of, I'll buy the album (usually digitally - and from Bandcamp where I can do so reasonably priced... I'm not going to pay $15+ for a single album just to support an artist directly). 
...
So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

Chad, while I'm generally in agreement with your whole post, I bold these two points specifically... Let's say the average album has, what, 10 tracks? $15 is only $1.50 per track in that case, is that really unreasonable?

My understanding of Chad's point (which I broadly agree with if right) is that, if he has limited funds to spend on purchasing albums, then if he spends $8-10 instead of $15 per album then it allows him to buy more albums.

Also worth noting that the artist is getting only a limited portion of that $1.50 per track anyway.

And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

Indeed, as I hope was clear in my posts, I agree that artists are getting a bum deal. My issue is with the notion that Spotify/streaming has made things worse.

[cramx3]

So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

I hear most of the complaints from older artists, I wonder how the small and upcoming artists feel about it.  I do think part of this is simply adapting to modern times.  Physical sales, radio play... all going away.  Bands need to adapt to get the most out of the way the world works today.  I think I saw Eclipse post on social media a couple years ago that they were frustrated with the payouts from Spotify yet they have no issue since then sharing Spotify play counts when they hit certain milestones.  I think they probably know it's not the best system for making money, but it does work for getting exposure. 

[The Walrus]

I suppose it's a matter of perspective; if I'm buying a 14-track album for $15 and all the tracks are like 3-5 minutes or longer and they aren't mostly interludes, that seems like a really good deal to me especially if I've already heard the whole record and enjoy it. $15 isn't expensive for a CD at all even if you buy it digitally. But yeah, again, largely in agreement.

[Volante99]

So by considering these in combination, essentially what happened was that in the 90s and early 00s, there was a big increase in revenue for the music industry but that increase mostly didn't go to the artists, it went to labels, promoters, whoever else. Whereas the amount going to artists (as Citi's report also showed) has steadily increased in cash terms, but probably not changed significantly in real terms.

This isn't to suggest that artists are getting a good deal. Just that the bad deal they've been getting has been the case for decades and isn't really getting better but isn't really getting worse either.

So what I’m extrapolating from the data;
-The revenue pie of the recording industry is about the same as the early 90s in real $ terms (not great)

-Artists are getting a larger slice of the overall pie

I would assume that means that the artist portion of the pie is just now split amongst a gazillion more artists or “listens“ if you will. Which makes sense to me as there is just more content these days; let’s face it, that indie Swedish progressive metal band who complains hardly making any money off of records wouldn’t have existed or would have made NO money in the 70s.

[Evermind]

I will also add that the position "hey, I use Spotify for sampling and then I buy stuff" is mostly unique for this forum and other dedicated music communities, at least as far as my country goes. No one, and I mean no one who I personally know in my country does this. Obviously the folks who go to concerts buy their CDs, but my friends who listen to metal? They either stream or pirate the shit out of it. My best friends don't make fun of me buying all the stuff, they know it's one of my hobbies, but my colleagues at work and friends by acquaintance, I've got laughed at by mentioning I still buy physical CDs.

Also I had a few requests to share my account on the streaming platform I use for which I pay yearly from these same people.

I have no issue with streaming platforms, I think they're necessary at this point. However I can understand the artists' and bands' frustration with this statement because it was pretty poorly worded, and even more poorly worded when taken out of context.

[The Walrus]

^ I am not surprised, because I have received so many Russian bootleg CDs it's gotten ridiculous. I have an Elvenking record with the in-case artwork UPSIDE DOWN from somewhere in your country! 

[Evermind]

Yeah, Russian unofficially burned bootleg CDs are a big thing here, so that tracks

[jingle.boy]

Like several others have stated, I primarily use Spotify for sampling, and save some albums that I might go back to a few times.  As individuals, our behaviour amounts to a drop of water in a lake.  But ultimately, if an act is making fantastic music that I want to hear more of, I'll buy the album (usually digitally - and from Bandcamp where I can do so reasonably priced... I'm not going to pay $15+ for a single album just to support an artist directly). 
...
So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

Chad, while I'm generally in agreement with your whole post, I bold these two points specifically... Let's say the average album has, what, 10 tracks? $15 is only $1.50 per track in that case, is that really unreasonable? And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

To be clear ... on the first point, I'll buy it off Amazon or iTunes for $10/$11 if the artist is (what I consider) gauging.  On the second point, maybe.  But I believe that's up to the artists to fight, not me.  I didn't create the market dynamics, nor am I looking to play a role in revolutionizing them. I just believe that I'm doing my part to be a responsible and fair consumer given the current setup.

[The Walrus]

Like several others have stated, I primarily use Spotify for sampling, and save some albums that I might go back to a few times.  As individuals, our behaviour amounts to a drop of water in a lake.  But ultimately, if an act is making fantastic music that I want to hear more of, I'll buy the album (usually digitally - and from Bandcamp where I can do so reasonably priced... I'm not going to pay $15+ for a single album just to support an artist directly). 
...
So yeah... I'm kinda tired of all the belly-aching from artists.  Suck it up - you've been getting screwed by all the extended players in the industry for 50 years.  This is the same shit, different smell.

Chad, while I'm generally in agreement with your whole post, I bold these two points specifically... Let's say the average album has, what, 10 tracks? $15 is only $1.50 per track in that case, is that really unreasonable? And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

To be clear ... on the first point, I'll buy it off Amazon or iTunes for $10/$11 if the artist is (what I consider) gauging.  On the second point, maybe.  But I believe that's up to the artists to fight, not me.  I didn't create the market dynamics, nor am I looking to play a role in revolutionizing them. I just believe that I'm doing my part to be a responsible and fair consumer given the current setup.

Oh, I totally agree. I suppose that last point of mine is a bit esoteric. I think we've had this discussion before actually, briefly, when discussing Douche Metal Singer I reference earlier, and we're very much on the same page.

Of course, there are those who would take that "I'm not looking to play a role in revolutionizing them" position as being similar to being quiet about racism. You're part of the problem, Chad!  Kidding, kidding, kidding... just trying to have some fun.

[HOF]

The other aspect of this. I’m sitting at work, streaming music for a good part of the day (I use Amazon instead of Spotify). If I’m at home I stream from the music files saved to my laptop, and the artist gets $0 other than what I paid to obtain the CD or download. With streaming, they actually get a little extra for every time I listen. Sure, it’s a tiny amount, but it’s more than nothing.

[Stadler]

I'm trying to figure out what was so bad about what he said? Many replies in this thread even said something along the lines that technically he isn't all that wrong.


Maybe MP wouldn't have made peanuts if he had made 8 albums that people actually cared about. Seems when MP wanted a break, the rest of DT wanted to continue the "engagement" with their fans.

And music IS product the moment you put it up for sale.


I have purchased a ton of albums that I would never have had it not been for Spotify. And while it does seem like peanuts, they (the bands) are making "something" off of me sampling. If I like it enough, I'm buying it.
It's not like if I buy an album and I don't like it after my first couple of listens they're going to give me my money back, are they?

Perfect.  This is spot on.

The rest is just fanciful emotion.  We all seem to want to "value" the art we like (or create), but the fact is, it's only worth what someone else will pay for it.  If Spotify upped their charge from $9.99 to $19.99 or $29.99 a month, would they likely increase or decrease listeners?

And as for the artists, I think Ek is wrong but for the wrong reasons.  I think artists ARE saturating the market.  I don't even mean guys like Mike, who I tend to support as a matter of personal satisfaction (though even with him, the days of "completeism" are long gone).  When I was in high school, college, artists would put out a 40, 45 minute album once a year.   $7, roughly ($16 roughly, today).  I'd go to the show - $15 ($35 today) - and buy a shirt - $10, $15 ($30, $35 today).  Every three or four albums, we'd get the live set, double vinyl, so $11 ($25 today).   So each year, we're looking at $85-$100 for your favorite band.   Today, each release gets the turbo special edition release, anywhere from $25 to $75.   The subsequent tour gets the turbo CD/DVD set, $45 - $60.   Tickets are $50 to $75.  Shirts are $50.   To support your favorite band you're at $250 at this point.  The problem is not a lack of product.  It's a problem of TOO MUCH product.

For me, artists are looking at Spotify the wrong way.   "$0.003 per play" is shitty, when compared to "$0.06 per play" from radio, or $0.99 per download.   But that's assuming that the buyer would have paid the "$0.99".   I know for me, I am/was a completeist.  I owned (and still own) every song officially released by Kiss.  Same with Maiden (well, I have a couple holy grails; one of the Soundhouse Tapes songs; one of the X Factor b-sides; the "Wasting Love" single, with two live songs).   Marillion.  Dream Theater.   Couple others.   I can't and won't do that anymore.  I can't do it, unless I can find stuff for a $1 or $2 on eBay or Discogs (and the artist ain't getting even a fraction of Spotify's numbers for that).   So, for many artists, the "$0.003" should be compared to "zip zilch nada".

The fact is, the material doesn't have the market value it once had.  That's a reality, and that's not Spotify's fault.  It would have been exposed one way or the other before long.   

[ariich]

The other aspect of this. I’m sitting at work, streaming music for a good part of the day (I use Amazon instead of Spotify). If I’m at home I stream from the music files saved to my laptop, and the artist gets $0 other than what I paid to obtain the CD or download. With streaming, they actually get a little extra for every time I listen. Sure, it’s a tiny amount, but it’s more than nothing.

This is something I've started to do a bit - even albums that I've purchased, I'm trying to remember to sometimes stream them instead of only listening to the digital files (or occasionally even the CDs). I'd never done that before but it was pointed out to me to be quite a good thing to do - the financial benefit to the artist might be fairly piddly but it's a small top-up on my album purchase (which itself is pretty piddly for them anyway), plus it adds to the numbers, chart position etc. and can help to strengthen label support, concert promoter interest, etc.

[Lonk]

^ I am not surprised, because I have received so many Russian bootleg CDs it's gotten ridiculous. I have an Elvenking record with the in-case artwork UPSIDE DOWN from somewhere in your country! 

This reminds me of a picture I took recently. I pre-order one of Buckethead's CDs in January. I was supposed to receive it in February but there was a delayed and I just received the CD last week and this is what I got 

[Stadler]

And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

Indeed, as I hope was clear in my posts, I agree that artists are getting a bum deal. My issue is with the notion that Spotify/streaming has made things worse.

Why do we assume artists are getting a bum deal?  On what is that based?   

[ariich]

And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

Indeed, as I hope was clear in my posts, I agree that artists are getting a bum deal. My issue is with the notion that Spotify/streaming has made things worse.

Why do we assume artists are getting a bum deal?  On what is that based?   

For me personally, 7-12% of the revenue going to the people actually creating the art feels very low.

[Evermind]

^ I am not surprised, because I have received so many Russian bootleg CDs it's gotten ridiculous. I have an Elvenking record with the in-case artwork UPSIDE DOWN from somewhere in your country! 

This reminds me of a picture I took recently. I pre-order one of Buckethead's CDs in January. I was supposed to receive it in February but there was a delayed and I just received the CD last week and this is what I got 

[jingle.boy]

Of course, there are those who would take that "I'm not looking to play a role in revolutionizing them" position as being similar to being quiet about racism. You're part of the problem, Chad!  Kidding, kidding, kidding... just trying to have some fun.

All Music Matters.   

@ Stads... excellent post.    It's so nice to vehemently agree with you on somethig!   

[The Walrus]

^ I am not surprised, because I have received so many Russian bootleg CDs it's gotten ridiculous. I have an Elvenking record with the in-case artwork UPSIDE DOWN from somewhere in your country! 

This reminds me of a picture I took recently. I pre-order one of Buckethead's CDs in January. I was supposed to receive it in February but there was a delayed and I just received the CD last week and this is what I got 

WTF 

[Stadler]

And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

Indeed, as I hope was clear in my posts, I agree that artists are getting a bum deal. My issue is with the notion that Spotify/streaming has made things worse.

Why do we assume artists are getting a bum deal?  On what is that based?   

For me personally, 7-12% of the revenue going to the people actually creating the art feels very low.

I suppose we're splitting hairs now on "what's revenue", but in some industries, that's very high.  A construction or appliances company would kill for 12% numbers.   Healthcare companies - you know, the ones that regularly get accused of "obscene profits" - make in that range.   That art has to be put to tape, that tape has to be put to other media, that media has to be produced, packaged, marketed, distributed, etc.   And everyone in the chain is entitled to a little taste for their risk.

I'm not arguing that it ISN'T low, I'm just asking what the basis is for the discussion.  I tend to think there's a bit of nostalgia, emotion, and wishful thinking when it comes to "art". We love our artists, we revere them in some cases, and there's a sense that that should translate into freedom from monetary and/or commercial concerns.   But we're not really talking about "art" here, we're talking about commerce.   You can't really have it both ways; if you want to talk "art", then we can use the vernacular of art; if we want to talk "commerce", then we have to use the vernacular of commerce.   It makes no sense to try to force one to speak in the terms of the other.

In a related conversation, it's common to hear complaints about tickets being unfairly priced, and Ticketmaster (commonly referred to around here as "Ticketbastard") being unfairly enriched in that process.   ECONOMICALLY, tickets are underpriced, though (the scalper market would look very different if they weren't.) 

[Ben_Jamin]

^ I am not surprised, because I have received so many Russian bootleg CDs it's gotten ridiculous. I have an Elvenking record with the in-case artwork UPSIDE DOWN from somewhere in your country! 

This reminds me of a picture I took recently. I pre-order one of Buckethead's CDs in January. I was supposed to receive it in February but there was a delayed and I just received the CD last week and this is what I got 

WTF 

I found IN SEARCH OF THE, and each Letter is it's own cd, packaged in a hand-drawn slipcase with a CD-R style disc.

What cd is that anyways?

[ariich]

And if they've been getting screwed for 50 years, shouldn't it be time for a monumental shift in the way musicians and entertainers are paid instead of kicking the can down the road because 'that's how it's always been'?

Indeed, as I hope was clear in my posts, I agree that artists are getting a bum deal. My issue is with the notion that Spotify/streaming has made things worse.

Why do we assume artists are getting a bum deal?  On what is that based?   

For me personally, 7-12% of the revenue going to the people actually creating the art feels very low.

I suppose we're splitting hairs now on "what's revenue", but in some industries, that's very high.  A construction or appliances company would kill for 12% numbers.   Healthcare companies - you know, the ones that regularly get accused of "obscene profits" - make in that range.   That art has to be put to tape, that tape has to be put to other media, that media has to be produced, packaged, marketed, distributed, etc.   And everyone in the chain is entitled to a little taste for their risk.

I'm not arguing that it ISN'T low, I'm just asking what the basis is for the discussion.  I tend to think there's a bit of nostalgia, emotion, and wishful thinking when it comes to "art". We love our artists, we revere them in some cases, and there's a sense that that should translate into freedom from monetary and/or commercial concerns.   But we're not really talking about "art" here, we're talking about commerce.   You can't really have it both ways; if you want to talk "art", then we can use the vernacular of art; if we want to talk "commerce", then we have to use the vernacular of commerce.   It makes no sense to try to force one to speak in the terms of the other.

You're talking about corporate profits for an individual company, which is very different and not really comparable. I agree that margins are very low in what you might call essential or functional industries - construction, everyday appliances, healthcare being the examples you gave but also things like utilities, food production, and so on. Such products and services are, by and large, pretty homogeneous regardless of who makes them. But prestige type industries such as tech and some arts have, or at least can have, much higher margins.

Let's have a look at another chart from that 2017 Citi report:



As you can see, from the total revenue of the whole industry (from all sources), the artists get a pretty small slice, which we know from elsewhere in the report is now around 12%. A similarly-sized but actually slightly bigger slice goes to pure profitability for music platforms (streaming services, radio services, etc.), while the largest slice - around a third of ALL industry revenue - goes to the costs of running those platforms, which will include marketing, exec salaries and so on. Looking at the two bars for music platforms, their profitability looks to be something like 30%. I expect the margins are similarly high for labels, maybe a bit lower, but the chart doesn't break it down between costs and profits. Still, the total money going to the labels is nearly twice what goes to the artists.

The Citi report really does have some interesting stuff in it, here's the link again: https://ir.citi.com/QnhL09FARMDbvMhnCWFtjkqYOlPmgXqWS5Wrjts%2B6usU7suR9o7uUEFwZNjmUfyrAn10iZxCkYc%3D

[Nachtmerrie]

I will also add that the position "hey, I use Spotify for sampling and then I buy stuff" is mostly unique for this forum and other dedicated music communities, at least as far as my country goes. No one, and I mean no one who I personally know in my country does this. Obviously the folks who go to concerts buy their CDs, but my friends who listen to metal? They either stream or pirate the shit out of it. My best friends don't make fun of me buying all the stuff, they know it's one of my hobbies, but my colleagues at work and friends by acquaintance, I've got laughed at by mentioning I still buy physical CDs.

Also I had a few requests to share my account on the streaming platform I use for which I pay yearly from these same people.

I have no issue with streaming platforms, I think they're necessary at this point. However I can understand the artists' and bands' frustration with this statement because it was pretty poorly worded, and even more poorly worded when taken out of context.

I barely know anyone who still buys physical CD's or LP's except a few colleagues who are as much into metal as I am. Most of my friends use Spotify and don't think a second about the artist revenues. Most people feel they at least pay for their streams compared to the Napster/Limewire.

Like others said I mostly use Spotify to sample new music and for convenience reasons which at least makes my favorite bands a little more money compared to playing my old CD's in my car. You can't blame Spotify (which I think is a great product), if it wasn't them they would be someone else. They offer the right product for the right price. As much as I love to see my artist making some more money I don't see myself paying € 50 a month for Spotify and I think 95% agrees with me. So Spotify will be here to stay and that's something artists will have to deal with.

It's the same with buying physical stuff at live-shows or directly from the artist. I rather buy my CD over there but I'm not paying  € 20,00 when the same album is € 10 on Amazon. I've made an exception for Haken's Virus but paying the same price plus almost € 15 shipping costs isn't something I'm doing every single time.

So I would say that's the key for artists. How do you develop a model which is both attractive for you and for your fans.
Maybe it's a bit naive but I think bands like Dream Theater could play a role in creating platforms in their niche market by creating  platforms which allows smaller artist to sell their stuff a better margins and better prices for their fans.
I would instantly pay a monthly fee for a platform that allows me to stream music of a bunch of bands I really like and also has some exclusive stuff, sells physical, merch, downloads and more.

[Ben_Jamin]

I will also add that the position "hey, I use Spotify for sampling and then I buy stuff" is mostly unique for this forum and other dedicated music communities, at least as far as my country goes. No one, and I mean no one who I personally know in my country does this. Obviously the folks who go to concerts buy their CDs, but my friends who listen to metal? They either stream or pirate the shit out of it. My best friends don't make fun of me buying all the stuff, they know it's one of my hobbies, but my colleagues at work and friends by acquaintance, I've got laughed at by mentioning I still buy physical CDs.

Also I had a few requests to share my account on the streaming platform I use for which I pay yearly from these same people.

I have no issue with streaming platforms, I think they're necessary at this point. However I can understand the artists' and bands' frustration with this statement because it was pretty poorly worded, and even more poorly worded when taken out of context.

I barely know anyone who still buys physical CD's or LP's except a few colleagues who are as much into metal as I am. Most of my friends use Spotify and don't think a second about the artist revenues. Most people feel they at least pay for their streams compared to the Napster/Limewire.

Like others said I mostly use Spotify to sample new music and for convenience reasons which at least makes my favorite bands a little more money compared to playing my old CD's in my car. You can't blame Spotify (which I think is a great product), if it wasn't them they would be someone else. They offer the right product for the right price. As much as I love to see my artist making some more money I don't see myself paying € 50 a month for Spotify and I think 95% agrees with me. So Spotify will be here to stay and that's something artists will have to deal with.

It's the same with buying physical stuff at live-shows or directly from the artist. I rather buy my CD over there but I'm not paying  € 20,00 when the same album is € 10 on Amazon. I've made an exception for Haken's Virus but paying the same price plus almost € 15 shipping costs isn't something I'm doing every single time.

So I would say that's the key for artists. How do you develop a model which is both attractive for you and for your fans.
Maybe it's a bit naive but I think bands like Dream Theater could play a role in creating platforms in their niche market by creating  platforms which allows smaller artist to sell their stuff a better margins and better prices for their fans.
I would instantly pay a monthly fee for a platform that allows me to stream music of a bunch of bands I really like and also has some exclusive stuff, sells physical, merch, downloads and more.

I don't understand that mindset. You have an opportunity to actually physically give the bands your money, and it all goes to them. Not only are you supporting the band, but you are also supporting the crew.

Just because I know it's cheaper, doesn't mean I would not pay $20. The Lesser known bands always run their own Merch tables, or are usually there after their set to sign stuff or take pictures. I usually wait till the line goes down then get in line, which is usually at the end so I can chat with the band members. I don't mind wasting money on Bands, honestly better wasted on them then on the $20 beer.

[Lonk]

I found IN SEARCH OF THE, and each Letter is it's own cd, packaged in a hand-drawn slipcase with a CD-R style disc.

What cd is that anyways?

It’s Pike 278: unexpected Journeys.

[lordxizor]

For me, artists overall make more money than they did in the old buy an album days (whether digital or physical). I used to buy maybe 6-8 new albums a year. What did an artist make off an album sale, a couple bucks? Let's be generous and say artists made $24 a year off of my album sales. Now, say I listen to 1000 songs a month at $0.003 per song, that's $36 a year going to artists from my listening to their albums every year instead of $24. Yes, the specific artists I would have purchased the album of would have made more in the old system, but artists overall make more off of me now.

[goo-goo]

Found the Periphery diagram that I mentioned before. This is how Periphery has become financially viable. And there's a lot of bands that have similar ventures like this.

[Ben_Jamin]

I found IN SEARCH OF THE, and each Letter is it's own cd, packaged in a hand-drawn slipcase with a CD-R style disc.

What cd is that anyways?

It’s Pike 278: unexpected Journeys.

Are you following him on Bandcamp? He has a lot of his Pikes on there, and I mean A LOT. I found Population Override on there, but so sad I couldn't get the cd, I had the cd before but it got scratched to hell (I found it at a Hastings back in '05).