I recently spent some time with Spotify, the “subscription” service that let’s you play any song in their library as many times as you want for a fee. The used quotes above because if you’re willing to accept advertisements, and only listen on your desktop, the “fee” is nothing. If you want the full package, with mobile application support and everything, it will cost you about $10/month. I tried the free service.
First, my impressions:
• I think the player looks cool, a sort of “iTunes in black.” Then again, it’s all in the eye of the beholder; Michelle hates the looks.
• I like being able to connect to Facebook, and see the playlists of those people whom I’m connected with. Although I wish there were some kind of Pandora/iTunes genius like method of auto-creating playlists from songs.
• Spotify’s song lists are a bit…wait for it…”spotty.” It imported my 88-song main playlist, and couldn’t find 36 of those songs. Not a great success rate. And this is mostly major-label stuff, not particularly indie or obscure. Of course, there’s another issue here—if the name of an album is even slightly different between iTunes and Spotify, Spotify can’t figure it out. For example, I have the cover of “Fortunate Sons” by Dropkick Murphys. iTunes lists the album as “Dropkick Murphys Singles Volume 2″ and Spotify lists the album as “Singles Vol. 2″ so Spotify couldn’t find the song, and gave me an empty link on my playlist even though it had the song.
• I can’t find a way to get a “controls only” view of Spotify, so you’re stuck with the full window onscreen, or hiding the app. Not ideal for a desktop player.
So software and feature-wise, I think it’s needs a bit of work in the execution.
But my main disappointment with Spotify is how horribly it pays artists. I believe that the current rate is 0.002¢ (in other words, two tenths of a penny) per complete stream (meaning, the entire song is streamed). The result of this is that Lady Gaga can have her single played over a million times, and still earn only around £100. To put that in perspective, from traditional terrestrial radio she would have earned about £15,000. But forget about the superstar level of plays—it means an independent artist, will not earn enough to pay even one month of expenses, let alone the cost of producing the song itself. FWIW, my own group, Ember After, has a small but significant number of plays, and so far we’ve earned around 4¢ from Spotify.
I think the “theory” behind the Spotify deal is that they earn a certain amount of money from subscriptions every month, and from this amount, a percentage is earmarked for artists/labels. The amount of that percentage is then split among every single artist who has plays that month, with more plays getting paid more.
In other words—it’s basically asking for the content first, setting a terribly low expectation for future reimbursement, and saying “if we make money, you make money.” It sounds “fair” at first blush (since the pay scale is equal if you’re a superstar or an unknown bedroom warrior), until you realize that it’s really asking artists to invest in Spotify’s success without ever getting a decent return. Moreover, most Spotify users use the free service, so they aren’t adding to the subscription pot anyway. The article linked to above said that in 2010, they had 7 million free subscribers, to 300,000 paid subscribers. I’m sure both have gone up by now, but clearly, most people will use Spotify for nothing, which means that while those users generate ad revenue for Spotify, they don’t generate any money for artists. So despite Spotify’s initial claim that “we’ll all get paid together” it seems that Spotify makes money off artists in ways that they don’t get any money from.
There’s probably more to it. I know that the major labels, for example, also get free advertising on Spotify in exchange for their catalog. So I may have heard/read/understood some of the details wrong. But I think my understanding is fairly accurate.
And this makes me sad. Not just as an indie musician who wants Spotify to pay me. But because the less musicians get paid, the less they’ll be able to continue to make music. And that means ultimately, Spotify (and other services that pay rates this low) strangle the very supply of music that makes them money.
Seriously, is 1¢ so much to ask? ONE. WHOLE. PENNY? Even a million plays would only result in $10,000. You couldn’t live on that. But it sounds more fair, doesn’t it? If Spotify is earning money off of subscriptions and advertisements from those million plays, doesn’t it seem fair that they should pay ONE. WHOLE. PENNY to the artist who wrote that music? One penny sounds like such a small amount—and it is…and yet it’s many times more than they’re paying.
Ultimately, I’m guessing that subscription services will be the way of the future. But my hope is that the services that end up winning (my bet is that it will be Apple, Amazon, and Google-based services) will pay more than Spotify to the people who make their service possible.