The music business used to all be so simple. Album sales and radio singles could once make a musician both notorious and rich.
But since the Internet destroyed that model, a would-be star now might get the notoriety of yore, without the money. The irony of the digital age for the music industry is that the barrier for entry has been all but eliminated, but actually getting paid for it is a whole new hurdle.
Services like Spotify have been filling the gap left by declining record sales and rising downloads by offering streaming subscriptions, and paying artists between “$0.006 and $0.0084” per song stream. Not surprisingly, these low numbers have drawn criticism from artists—leading Spotify itself to launch a new web site this week called SpotifyArtists.com to convince the world (and most of all, artists) that they are not evil.
Thom Yorke of Radiohead launched a rebellion against Spotify by pulling his and Nigel Godrich’s Atoms For Peace collaboration from the service in July, citing low payments for up-and-coming performers.
According to the “real but anonymized” numbers released on the site, a niche indie album made $3,300 from streaming in the month of July. Once Spotify reaches 40 million paying subscribers, which the company projects will happen, that same album could make an estimated $17,000 monthly.
Currently they pay 70 percent of their revenue from advertisements and subscriptions to rights holds, amounting to over $500 million dollars paid out in 2013 so far.
"A million streams on Spotify is worth at a minimum twice as much as what a video service would pay, and three to four times what an online personal radio station would pay. A fan streaming your music on Spotify is far more valuable than, say, a fan listening to your music on repeat on a music video service," Mark Williamson, director of artist services at Spotify, told the Guardian ahead of the launch.
The company points to declining numbers of piracy in countries where the service is active as proof that streaming is a good, healthy alternative to stealing music.
Source: Columbia University Copyright Infringement and Enforcement in the US.
So is the service good or bad for artists? That is up to your interpretation. But it does beg the question that the entire post-internet world is trying to figure out: How do we pay creatives in a digital age?
Services like Spotify might not make a new artist rich overnight, but nothing else is making that artist rich, either.
In a July interview with Mexican website Sopitas, Yorke spoke about why he opposes Spotify. "To me this isn't the mainstream, this is is like the last fart, the last desperate fart of a dying corpse. What happens next is the important part."
Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.