It’s hard to know exact details (because Apple loves its secrets), but as far as anyone can tell, iTunes is profitable, because it runs on all their devices, not just the iPod. In their official reports, Apple lumps together a grab-bag category called ‘iTunes, Software and Services’, which, as one columnist put it, is everything they sell that you can’t drop on the floor. In their latest quarterly earnings report (PDF), this division was responsible for just under $5 billion in net sales, a 9% increase over the same quarter last year, and about 9% of the company’s total sales. They go on to note that year-over-year sales of digital media (including music) is down 4-5%, but I doubt that’s actually pushing it into the red.
…well I stated from the outset my figures were old. I understand the userbase has grown, but a bigger userbase does not necessarily translate to bigger numbers for the artists. And I think that the “Information is Beautiful” infograpic shown in the Guardian cite bears that out.
It very often isn’t the decision of the artists at all to sign with Spotify. An individual artist makes bugger all off Spotify. But a label with many artists signed with them might make a pretty healthy passive income.
Statistics really really aren’t your strong suite. And I mean that with all due respect. Spotify offers free and paid subscriptions. The price for a paid subscription was $10.00 per month. (looking it up now the subscription price is $12.99 per month, but that might just be here in NZ where we have to pay GST on top.)
So with 12 months in a year every paying Spotify music listener spends $120 every year. Every single one. Spotify are being downright cheeky citing that figure as being meaningful in any way. You simply can’t compare that figure with the average spend of every single person in the US who has paid some amount of money at all for online music.
So I’m not entirely sure of what you are convinced of. I’m surely convinced that Spotify are using misleading statistics to try and make them look better than the are. The reality is that out of all the music deals available to artists the only one that offers a worse deal is Youtube. Spotify is objectively a worse deal than Deezer, than Rhapsody, than Beats, than Tidal, than Google Play, than ITunes, than Bandcamp, than doing it yourself.
Spotify has a huge market share with massive revenues that pays artists a very small amount of money and shows little sign of ever going into profit. It has all the hallmarks of a company set up to get a high valuation so it can be sold. No matter how much more revenue Spotify pull in it is very unlikely that the artist will get a bigger slice of the pie.
But if each sale is a loss, then increasing sales compounds your problem rather than fixing it. So since Spotify is still not profitable, having a large user base most likely means they’re in an even worse financial position than they were in the past with fewer users.
And it doesn’t look like they’re paying the artists any more than they were in 2012 either.
When the paying userbase of Spotify increases, the total payout increases proportionally. Of course that doesn’t mean that every single artist will get more, but most will, and artists will get more overall.
You’re not telling me anything I didn’t realize here. (Except that I’m supposedly not good at statistics.) And I fail to see why the average amount of money spend by paying customers is not a relevant figure.
I’m not disputing that Spotify is currently losing money, or that they are losing more money than they did in 2012.
This figure shows quite clearly how much more they are paying artists ocerall compared to 2012.
Because you seemed to be saying there are people who stream music and people who buy albums and it makes good financial sense to cater exclusively to the album buyers. I can draw only from my own experience, but as someone who buys music albums, it’s streaming services that entice me to buy albums. A musician who does not allow their music to be streamed is losing out on both the small percentage of ad revenue from the stream and the larger potential revenue from me buying the album. That being said, Taylor Swift has a lot more information available in terms of what is making her money than I do. But I suspect regarding music streamers as lost sales who’ll buy your music if they can’t stream it is a mistaken belief.
…the actual figures aren’t showing this “proportional increase.” It shows that they are getting fractions of a cent more on average. Remember, not only is the userbase increasing, the artists on spotify has increased as well.
Well you didn’t seem to understand the distinction between revenue and profit. And you keep citing statistics that aren’t particularly relevant.
You really can’t see the difference?
The average figure of $120 will be absolutely constant no matter how many paying Spotify music listeners you include. If you only had two Spotify customers the average spend would be $120. If you had a thousand Spotify customers the average spend would be $120. If you had a million Spotify customers the average spend would be $120. And that average amount doesn’t affect what the artist eventually gets paid. Revenue is not proportional to payout. Payout is calculated by an algorithm that includes (among other things)the number of streams, the country the streamer is based and the artists royalty rate.
Spotify used that figure to compare to total average sales from all paying customers who purchased music of any sort online. Can you tell me did those customers spend more or less in total than what Spotify customers did? (Of course understanding that this average would also include Spotify customers) Did a greater percentage of that money end up in the hands of the artists than from Spotify?
The comparison between the two figures actually demonstrates nothing at all. Its a literal comparison between apples and oranges.
The overall number is meaningless. If your boss doubles his workforce without giving you a raise or lowering your workload, does it matter to you at all that his payroll expenditures have doubled? He has not improved your incentive to work there. If you were on the fence about quitting, your boss’s overall payroll increase will not influence you to stay.
I don’t know you guys. I feel like it’s not that difficult to understand, or disagreeable. Spotify pays 70% of their revenue to artists, and that revenue has gotten a lot larger since 2012. Therefore artists will get a lot more in total.
Anyway, this is probably my last post in this thread.
(It’s true that the number of artists has on Spotify has increased as well since 2012, but with nowhere near the same magnitude.)
If anybody here watches HBO’s “Silicon Valley”, you’ll know that the last thing Spotify wants to do is turn a profit.
So Apple feels that it should be allowed to go 3 months without paying artists? How does the RIAA feel about that or do THEY get paid so (as usual) fuck the artist?
…no, this is wrong. Again. Spotify claims they pay 70% of revenues not to the artists but to the Rights Holders. The Rights Holder in turn pay out a percentage of that to the various artists. From Wiki:
The artist gets a tiny percentage of nothing. The Rights Holder (typically the label) gets a tidy passive income from lots of different artists. The labels love Spotify.
…“exclusive?” Not at all. Artists need to make the right financial decisions for themselves, and passive income and exposure from streaming services are obviously something to consider.
Music streamers aren’t regarded as “lost sales.” They are regarded as a bad return on investment. Which they are. They simply don’t convert that often into bigger sales. It is much more cost effective for artists to put their efforts into promoting revenue streams with good ROI than bad ones. A new band is much better off tweeting a link to their album shop on their website than to tweet a link to their spotify page. It is much easier to make 100 CD sales than it is to get several million streams. But should artists lock themselves into a single revenue stream? Nope.