Music Should we be paying more for streaming services such as Apple Music and Spotify?

[Traub]

A few points there.

First, you're assuming that the artists who get the most streams are better while the ones who don't are shit. Which isn't typically how people assess art, isn't a good predictor of what art will become culturally important and ignores the impact business mechanics have in artificially boosting an artists' profile on a streaming service. In effect what you're actually saying is that artists on major labels get more, which is a different thing.

Beyond that, the actual royalties artists get per stream is so small that their income has inevitably been massively reduced. It's difficult to say how much exactly they get per stream but most estimates have it in approximately the 100ths of a cent range. The math simply doesn't come close to working in terms of increased listeners offseting reduced revenue per play.

Most importantly, the money doesn't necessarily go to the artist you've streamed either. Let's say we both pay £10 a month but you listen Taylor Swift while I listen to smaller indie acts. Our money gets pooled, the streaming service takes its cut, then the remaining money is split based on the total number of streams that month. That means that the vast majority of the artists' share of the money I've spent to listen to smaller acts instead gets siphoned off to Taylor Swift instead, who I may never have listened to even once. Which again goes back to the business aspect, as it effectively means the streaming market is rigged towards acts on major labels with more marketing budget, who siphon the majority of the money that people spend listening to smaller and medium sized acts in addition to the money people spend listening to them.

But it ends up as the same mathematically, so they're no worse off. For example, if there 100 total people listening, 99 listen to swift and 1 listens to indie, 99% of revenue goes to swift and 1% to indie. This is equivalent of 99 people paying their 10 quid to swift and 1 person paying their 10 quid to indie. Another way of looking at it: the vast majority of your money goes to swift, but a small proportion of every other person who never listened to indie goes to indie.

Honestly I only listen to Spotify a few hours a week so a tenner a month seems fair. My wife has her own subscription even though we often listen together so that's another tenner a month to Spotify. Other than that we listen to the radio a few hours a week too, though nowhere near as much now as pre-COVID since I now don't have to drive to work. The music industry is earning more from casual listeners like me now that I pay a tenner a month to Spotify than before since I never bought albums or anything like that.

Get a family plan and save yourself some cash.

 

[sullydnl]

But it ends up as the same mathematically, so they're no worse off. For example, if there 100 total people listening, 99 listen to swift and 1 listens to indie, 99% of revenue goes to swift and 1% to indie. This is equivalent of 99 people paying their 10 quid to swift and 1 person paying their 10 quid to indie. Another way of looking at it: the vast majority of your money goes to swift, but a small proportion of every other person who never listened to indie goes to indie.


Get a family plan and save yourself some cash.

The money is divided based on streams of an artists' songs though, not how many subscribers do the streaming. So that math only holds if user habits are the same across genres and artists, which we know isn't the case.

A good example is Ed Sheeran. Back in 2017 Sheeran managed to have a remarkable 16 songs in the top 20 at the same time. However, that didn't happen because a completely unprecedented number of people wanted to listen to Ed Sheeran. It happened because the people who did want to listen to Ed Sheeran listened to him a lot.

These are known as "passive" listeners. They're people who tend to like a narrower range of artists, who tend to listen to the same tracks over and over again and who tend to have more free time in which to listen to music. In other words, they tend to be teenagers and very casual music fans. They're who major labels target their mainstream pop acts at and they as individual subscribers wield disproportionate influence on where streaming revenue goes.

Essentially, each stream acts like a vote for where the money should go. But passive listeners will tend to have a lot more votes than the indie fan in your example and tend to concentrate those votes on fewer artists. Which means that Talyor Swift will get a disproportionate number of votes from her 99 subscribers and eat heavily into the 1% of money provided by that guy who likes indie.

Whereas in a user-centric system, the income brought in by that indie-guy would basically be ring-fenced to go exclusively to the indie acts he's actually paying to listen to, with the Taylor Swift fan next door who listens to "Shake It Off" a thousand times a day having no impact on where his money goes. In other words it would be more like the pre-streaming system, where what counted was how many people paid for your music rather than how often they then listened to it once they had it.

 

[Olly Gunnar Solskjær]

Given the sheer amount of music, the prices are far too low. Even in 2020 I think a lot of people are happy to pay full (or close to full) prices just for a single album or song going by the popularity of Bandcamp. So £10 a month or less for access to almost everything is obviously not "enough".

The main issue is that Spotify definitely needs to pay them more. Instead, the billionaire CEO says they just need to start making/releasing music more often. I'd imagine if people knew more money was going to their favourite artists and they weren't struggling, then more would be ok if prices went up a bit.