Can we now agree Spotify doesn't help artists?
twitter.comWhile piracy may indeed be better than using Spotify as the other article on HN seems to suggest, I think it's fair to note that Spotify is right when they say that you shouldn't look at how they do things in terms of $/play or $/song, just like you shouldn't think a pirated song = a lost sale.
This is the logic RIAA has used for a long time, saying that if a song was downloaded 100 million times, it means they lost 100 million sales. You should probably see Spotify plays more like Youtube views. Just because Lady Gaga got 1 billion views on her songs on Youtube, doesn't mean she lost 1 billion sales, or even close to that.
The same thing with Netflix. Someone might pay $100 per year and watch 300 episodes and movies during that year, but that doesn't mean that if it weren't for Netflix, he would've bought all 300 from iTunes for $2 each or whatever it costs there, for a total of $600.
New technology has enabled us to consume a lot more content, but without paying a lot more. In fact we now expect to pay less. If the industries offering us that content aren't willing to accept that, people are going to pirate it. But even if they somehow stopped piracy, they would still not pay a lot more for the content consumed, and would probably dramatically cut down on the consumption. The end result of that would be that there would be a lot less "popular" artists, and a lot less money for those who aren't popular, because there would be fewer people buying the songs of the unknown ones.
The problem that I have is that it's not clear to me why you shouldn't look at it by comparing it to CD sales. The goal of Spotify isn't to capture all the pirates and leave the rest of the public paying for their music -- it's to replace other forms of music consumption.
In one sense you could compare Spotify to radio and say that it's no different to that. But it is different. On radio, I can't select any song I want to listen to. On radio, I have to listen to what's on a playlist someone else has created (often in a manner that avoids repeating a particular song). Radio doesn't replace the needs to buy a song in order to listen to it repeatedly. Spotify does. And if it's going to do that, I think it behooves them to pay more to artists (or to place some kind of restriction on the number of times a song can be played).
It's obviously all numbers.
How much do you pay for Spotify a month? $5 or $10? Or free, in which case how much does Spotify get for an ad impression, and how many ad impressions do you get served in a month?
Now, how many songs listens do you get in a month? Assuming Spotify takes absolutely $0 for themselves, how much money can that possibly be?
Now, what in your opinion is a "fair" amount to pay artists for a listen to their song? Multiply that by the number of songs that you listen to. Would you pay that for a service?
I'm guessing that I play a few thousand Spotify songs a month (I don't know where that statistic would be). I pay Spotify $5 a month. If I only listen to 1,000 songs, that's $0.005 per listen. And that's assuming that Spotify passes EVERYTHING along to the musician (how to studio techs get paid again?)
If people won't pay the "fair" price for music to listen to it, then the price isn't fair. It's a consumer's market. It sucks that the musician got $16 for 90,000 listens. That's $0.00017 per listen. That's clearly not enough for that artist to live on, but there's no mention of how many sales they received from their attention on Spotify.
It's a complex problem. There's probably no simple solution that will satisfy everyone. Clearly, the main people who are making money with Spotify is Spotify themselves (since they minimize the amount of bandwidth by using P2P technology)...but even if they passed more along, it wouldn't make the artists happy.
The last time I was discussing this (http://news.ycombinator.com/item?id=3047694) I was downvoted because I linked to the famous infographic which appears to demonstrate that Spotify might not earn artists much money. Supposedly, it's incorrect because it was based on data after Spotify had 'recently launched' (the data in the infographic was from 2010).
This tweet is from about 2 weeks ago. Can we now say it doesn't help artists?
Presumably, licenses to stream this music were acquired by Spotify from the artists' designated representatives. Presumably, too, those representatives are receiving some proportion of these licensing fees. If the deal is acceptable to the representatives but clearly abysmal to the artists, I wonder what percentage of the fees are being exacted by the middlers.
I know the amount of money received by a typical artist with a typical contract on the typical sale of a typical CD is, typically, very small.
But how many of those people bought your music after finding it or trying it on Spotify? It might not be better (financially) than piracy, but I think it's far from clear that it doesn't help artists.
Does anyone know if the same applies to Pandora? I've used the paid version for two years now, and would like to believe the artists are getting paid.