Earlier this summer, Thom Yorke, the lead singer of Radiohead (a band that I have never listened to, by the way), pulled a bunch of his work off of Spotify as a protest to how the music streaming service works. In the words of Radiohead’s producer, Nigel Godrich:
“The reason is that new artists get paid fuck all with this model,” Godrich tweeted. “It’s an equation that just doesn’t work.”
You’d think as an artist working in a different medium who is struggling to figure out how to make money in a system that is evolving to low cost and free, I’d be supportive of Mr. Yorke and Mr. Godrich’s efforts. “Yes,” I should be saying. “Go forth and demand more for artists, both big and small. Spotify is a great evil that is depriving musicians. Battle on, good sirs!”
Well, no. I think they are missing the incredible benefit Spotify brings to musicians, particularly the smaller ones. As my long-time readers will know, for a long time I thought the IPod was the greatest invention since sliced bread. When I discovered Spotify, I realized the error of my ways. I love music. If I have a choice, it is always on. At work, except when I’m on the phone or have a meeting. In my car. At home, when I write, when I cook, when I do just about anything. Music is there. What Spotify gives me for $10 a month is access to virtually anything I could possibly want to listen to. I no longer pay for music downloads or for CDs. i don’t need to.
But, that’s not the point here. This post isn’t about how great Spotify is for music consumers. This post is about whether it is a good opportunity, a good service, a revenue producer for musicians. Through the power of Google, I learned that the royalty rate most music publishers pay musicians is 10-20%. So, on that $9.99 download, the artist makes $1 to $2. On the .99 single download, the artist gets a dime or two. And, then their revenue stops. The artist doesn’t get paid each time I listen to what I’ve paid to download. That is the end all and be all of what they will make from my listening to their music.
That’s assuming I ever hear about the artist, listen to their music, and decide to spend my limited discretionary cash on their music. I’m the type of person who prefers buying the entire album, not just a single. So, typically, when I was buying music, my decision was a $10 decision, not a $1.
Now, I have Spotify. That’s not an issue for me anymore. I’ll give you an example of what this means. Spotify has a “Discover” feature. It works like this. You’ve listened to Musician X, you may like Musician Y. Today, I was listening to Spotify on my iPhone and the Discover feature suggested Colin Hay. “Who is Colin Hay?” you might ask. He is the brains and talent behind Men at Work, the 1980’s “Australian” rock/pop band that wasn’t much more than a one hit wonder. I put Australian in quotes because Mr. Hay is Scottish. So, here you have a guy who was a part of a rock/pop band over thirty years ago still producing music and it sounds like this (something I never would have thought to hear from the brain child behind Men at Work).
And I only learned of this because of Spotify. I added him to my Spotify starred list. What follows is a partial list of new artists I’ve discovered since I started using Spotify. Not all of these were discoveries entirely attributable to Spotify. Some I learned of from other bloggers or friends. But what Spotify did was make it possible for me to listen to them and fall in love with them. And then listen to them over and over and over again.
Matthew Perryman Jones
The Band of Heathens (a killer group)
Good Old War
The Gabe Dixon Band
Robert Earl Keen
Ray Wylie Hubbard
Trampled by Turtles
Iron & Wine
Band of Horses
Matthew and the Atlas
The Bonfire Band
Mumford & Sons (yes, I heard these guys on the radio first, but Spotify gave me the ability to get into their catalog and put a ton of their songs on my starred list.)
The Cat Empire
What Made Milwaukee Famous
Krista Polvere (love her, absolutely love her)
Of Monsters and Men (yes, before they hit commercial radio)
The Shouting Matches
Holly Williams (Hank Williams granddaughter, Jr.’s daughter)
The Avett Brothers
The Oh Hello’s
Jamie N. Commons (an incredibly bluesy, powerful English singer with a voice and a rhythm you’ve got to listen to)
The Middle East
The Tallest Man on Earth
Youth Lagoon (this one absolutely incredible song called Posters and I don’t even know how to describe why I love the song)
Imagine Dragons (yes, before they hit commercial radio)
The Lumineers (yes, before they hit commercial radio)
Ed Harcourt (some beautiful, piano based ballads)
Slaid Cleaves (a storyteller who sings)
Ryan Bingham (a great voice)
The Fleet Foxes
Sam Kills Two
Young the Giant
The Apache Relay
Walk the Moon
Dry the River
Kings of Convenience
Said the Whale
All of these artists have songs on my starred list, the thing that provides the background music for my daily existence. Some of these artists have a lot of songs on my starred list. Without Spotify I never would have gone there. I slowed down a lot on music purchases in recent years because of the other demands on my financial resources. But now …
The Tallest Man on the Earth is the best example of what Spotify has done. Never heard of him. Probably never would have listened to him. I know this. I have never, ever heard him on commercial radio, so the chance of my picking up on him before Spotify was not slim, it was none. Then I heard a song (I wish I could remember which one it was) and I went to Spotify and was blown away. There isn’t a song he does that I don’t enjoy. A dozen of his songs are on the starred list. Plus I frequently listen just to him — his entire catalog is available on Spotify. I have absolutely no doubt that Mr. Tallest has made far more money off of me as a result of Spotify then he ever would have if Spotify didn’t exist. And the same can be said for many of the artists on that list. And if I ever find out that Mr. Tallest is playing anywhere near Sacramento, I’m there. I’m buying a ticket. I’m buying a shirt. I’m gushing over him like a school girl. Same goes for a number of artists on the above list — I want to see them live if I have the chance.
And that’s where Mr. Yorke has it exactly wrong. Spotify doesn’t hurt new artists. It doesn’t hurt the lesser known artists. It is a tremendous boon to them. What Spotify actually does is hurt the larger artists. The ones with built in fan bases who buy their CDs without a second thought. You no longer have to do that if you have Spotify. Makes me wonder if he’s not doing this for more selfish reasons than he purports.
Yes, the royalty rate Spotify pays is a fraction of a penny for each play of a song. But Spotify claims to have 24 million subscribers. I’m pretty positive many of them are people who listen to music. A lot. Spotify estimates it will pay out $1 Billion in royalties in 2013. I’m pretty positive that in a lot of ways a lot of that revenue probably wouldn’t have found its way into the pockets of the musicians if Spotify didn’t exist.
P.S. A lot of the articles about Mr. Yorke’s protest provide examples of artists who complain about the royalties they are paid. It typically goes something like this: During the last six months, my songs were streamed 4,472 times and I only got paid $73.
That sounds horrible. Right? But there seems to be this assumption built in to the “horribleness” that the number of listens represents individual listeners. As in, if my songs were streamed 4,472 times, that must be 4,472 potential listeners. Um, no, that 4,472 listens probably represents a small fraction of that number in potential listeners. Because people who find songs they like listen to them over and over and over again. I’m convinced, particularly with smaller artists who can’t crack commercial radio that the revenue they get from Spotify they would never see if it weren’t for Spotify.