But there's an impedance mismatch here. The copyright holders are being paid per-play but the users are paying all-you-can-eat. That's always going to be an imbalance. The only way to "fix" that would be to charge "Terry" a cent per listen like a jukebox.
This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.
That’s not how Spotify works, though. According to the link above:
Every time somebody listens to a song on Spotify it generates payments, but Spotify does not calculate royalties based upon a fixed “per play” rate.
Unless there are some secret deals being struck for fixed per-stream royalties that Spotify isn’t admitting to publicly, every rightsholder gets a percentage of monthly revenue. Which sounds fair, until you consider long-tail producers and consumers, for whom the marketplace is distorted by this model.
Your buffet analogy isn’t really apt here because streams aren’t limited resources, and they all have the same effective wholesale cost to Spotify (again, assuming no secret deals).
You're totally right on the merits, but it's worth noting that the big record labels are composed entirely of and built their empire solely upon unjust-seeming secret deals, and we have no reason to believe that they've stopped that modus operandi now merely because they're dealing with Spotify.
Indeed, there were secret deals with record labels in which Spotify gave up 'some amount' of equity to majors in order to be able to stream their catalogs....along with an upfront sum of course.
I think the real problem that isn't being discussed is the fact that on a service such as Spotify it is impossible for an artist to be independent, his/her efforts WILL support majors via their equity in streaming services.
So I prefer non-lyrical trip-hop. I wouldn't know I have that preference without discovering it through Spotify. You're telling me I should now start buying those albums on iTunes if I want to actually vector money toward those artists? But I can get most of them for almost free on Amazon Prime. So why not just send money to the artist directly?
I listen to Spotify and Pandora almost exclusively. Mainly Spotify. I probably listened to 300 tracks of Emancipator a month on Spotify. At 0.00786 per play, that works out to 2.85. For the last 2 years: 2.85 * 24. That's $56.59. I seriously doubt I would have spent that much on iTunes. In fact, from their site, I can only spend $46 on their music.
In the long run, it seems to me that Emancipator is winning on Spotify, even if I overestimated by a factor of 3 and only listen to 100 tracks a month. Presumably, I will be listening to Emancipator for a long time.
I probably listened to 300 tracks of Emancipator a month on Spotify. At 0.00786 per play, that works out to 2.85. For the last 2 years: 2.85 24. That's $56.59.*
I don't think most people listen to 300 tracks of any artist per month consecutively. Say you are doing 30 tracks per month on average by an artist, that's $5.66, less than buying three 10 track albums.
I have hundreds of albums on CD (I'd guess ~500 or 600). There are many that I probably only listened to five times.
I don't have to listen to it consecutively. But I listen while driving, while studying, while working. I certainly fall in the category of indie fan listening to a lot of music from catalog artists, not hit makers.
My main gripe is that because of this stupid model, it pushes a lot of the artists I would listen to away from spotify because it doesn't connect them directly with the revenue stream they should be getting from their true fans. Artists have a hard time surviving without that.
That's because the indie artists aren't looking at the big picture. They would be getting less than they hoped for from the Spotify model, but now you will likely never even hear about them. They're significantly hindering their growth potential and ability to sell concert tickets.
This. I think one issue is that the music industry pegged the price of CDs at around $18. But that was for hit maker CDs sold to mass market listeners.
But there's a separate listener: the explorer. The value of any given track is exceedingly low, but these are the people you depend on for the discovery function. Personally, I prefer that role, but the cost before Spotify was exorbitant unless you were an industry insider.
It doesn't negate the validity of wanting compensation for Spotify plays. Not being on a music service is one way to let your listeners know that the system is fucked and maybe make it change.
The system isn't fucked. Those bands used to NEVER get radio play except from the occasional college radio station that almost nobody listened to. And many of those bands never even made it that big. Now they have listeners all over the world. And if there's a decent market for their music they will get concert ticket sales. Spotify has got to be the best marketing a small band can get, and Spotify pays you for the privilege of marketing for you.
Just because situation is better doesn't mean it can't be further improved. You're considering 'No Spotify' vs 'Spotify' instead of 'Spotify' vs 'A better Spotify'.
If you think on principles, Spotify should in the long term aim for maximum customer satisfaction. This means optimizing the satisfaction per customer instead of per music play, seems to be currently done. By concentrating money on bands each user listens to each of those bands (getting more money) should theoretically improve in quality (and give Spotify more attention), increasing overall user satisfaction. It's a simple reasoning.
Never mind the fact that it's just plain wrong to assume that "those bands NEVER used to get airplay". E.g. there are a number of significant artists on the label Drag City, such as Ty Segall and White, both of which get plenty of radio play, and most of the label's catalogue is not available to stream.
> But there's an impedance mismatch here. The copyright holders are being paid per-play but the users are paying all-you-can-eat. That's always going to be an imbalance. The only way to "fix" that would be to charge "Terry" a cent per listen like a jukebox.
Or split Terry's money between the artists they actually listen to.
There's another option, which is to calculate the "per play" rate differently for each listener. If one user plays 300 tracks per month (one 10-track album per day), and another user plays music 24/7 (the gyms that have been mentioned before), why should the per-play fee be the same in both cases? If this was a pay-per-play model that would be fine, but this is all-you-can-eat streaming. Users that listen to a disproportionately high number of songs should not dictate which artists get money. That awards those users far more than their normal $10/mo purchasing power.
This scheme is similar to the proposal to calculate artist pay independently for each user, but I think it's a little simpler, since you still only calculate the artist pay out of the global pot, you're just weighing each play by the user's total monthly plays. And you can put a minimum on it too, so the per-play weighting doesn't take effect until the user listens to more than a given number of tracks per month (this way the user who has a subscription but just occasionally listens to a song here and there isn't paying the artist $1 per play, which is to say, until you reach a certain point, listening to other songs won't "devalue" your previous tracks).
This is a bit like being a vegetarian at a buffet and complaining about your admission fee paying for steak which all those other people are eating. It's true, but you came to the buffet because it was much cheaper than a la carte with better service.