Report: Spotify Paid Lady Gaga $167 For 1M Plays - hypebot

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Roger Bixley

How much would she have gotten paid if the song played on the radio and was listened to by 1m people?

Ad Noiseam

This seems about right. The label I manage, with more than 100 releases and more than a thousand songs, is getting so little money from Last.fm, Spotify and comparable services that I can but laugh at it.

Yes, CD sales are dwindling, but I make more money by selling one CD a month than by having tenth of thousands of streams in the same period. Better said: these services just add insult to injury.

Old Record Guy

The real math that needs to get done here is how much Spotify is charging for their ads, what's the CPM? That's what needs to be defined and negotiated here.

If Spotify charges an advertiser 6 Euros for 1,000 views (or listens), then let's say the artist in question should get 50% of the CPM, or 3 euros per 1,000 listens. So for a million listens, the artist should be paid 3,000 Euros.

The problem with music sponsored by advertising is the gap between what a typical CPM is worth, versus what the labels want per stream.

Where this gets interesting is how delivering a specific, user desired song impacts the click thru rate of an ad that is delivered next to it. The pricing of these ads should be variable based on the popularity of the songs, and advertisers should pay more to have their ad appear with top content.

Spotify has a great service but apparently little imagination in the ad strategy department. And both labels and artists are still under the illusion that their music has some significant value - it doesn't. In the ad sponsored world, music will always only be worth a % of the CPM.

tricky

My daughters 8 month old band is averaging $150.00 per month in downloads from Tunecore.
95% iTunes, 5% streaming. Spotify's big worry should be a P2P streaming model from iTunes and higher ISP fees for bandwidth usage.
Re:"The Streaming Model" - My 16 yr old son uses up our 90 gigs a month in under 3 weeks. It's $1.25 per gig after that?? Time for a net meter.

Tunecore Rules

Ad Noiseam

> And both labels and artists are still under the
> illusion that their music has some significant value
> - it doesn't.

To the exception that Spotify, Last.fm benefit more from the labels (who bring all the content) than the labels benefit from these services. A lot of labels over here are speaking about leaving these sites altogether, as they are tired of providing content for free.

RouteNote

Umm... this isn't quite right; the modest payment in question was from the Swedish performing rights society, not from Spotify directly. Universal will have been paid a few cents per stream for this, that they may or may not have passed on to the young lady.

http://torrentfreak.com/lady-gaga-earns-slightly-more-from-spotify-than-piracy-091121/

kassin

have you not heard of ASCAP or BMI? she would've have been paid hundred's of thousand's of dollars with a comparable number of radio plays. see, that's kind of the point.

Old Record Guy

"Universal will have been paid a few cents per stream for this, that they may or may not have passed on to the young lady."

EXACTLY. By the time this money passes thru accounting at a label, it's likely diluted down to nothing to pay off an artist's unrecouped balance.

"To the exception that Spotify, Last.fm benefit more from the labels (who bring all the content) than the labels benefit from these services. A lot of labels over here are speaking about leaving these sites altogether, as they are tired of providing content for free"

The labels don't provide anything for free - they have exorbitant per stream rates, and in many cases, they receive large advances and/or equity (which isn't shared with the artists) from these companies in exchange for licensing content to them.

The problem is that the entire world places very little value on music as a product, but most record labels and artists won't accept this. I'm not saying it's right, just that it's reality. If you remove the music from these services, people will go right back to file sharing, whether it be via torrents or giving it to each other via hard drive.

Music is not worth what it used to be and until there is acceptance about that, greta new services like Spotify will die, piracy will continue, and the labels will die.

There's an old expression "It's best to have someone inside the tent pissing outside, than someone outside the tent pissing inside."

At least with Spotify, the consumers are pissing outside the tent.

Ad Noiseam

> The labels don't provide anything for free - they
> have exorbitant per stream rates

The label I am writing about is mine. No "exorbitant per stream" rate, but your down-the-road, 24/7 indie label. So no big accounting fee, since no accountant at all. :)

Daniel "Danny Dee" Aguayo

I dont think any indie artists have any delusions that they are going to get rich off streaming royalties.

Again, its a major artists on a major label shitting a brick. Not relevant for the majority of the artists in the world.

Lee Jarvis // US Music Jobs

When an artist starts out with earning no income from their music, they are quite happy to give it away for the exposure it may create. Obviously it is easier for a small band to offer a free mp3 and say "we may have lost a potential $1000" than it would be for Universal to do it with a Lady Gaga single and consider losing (potentially) a lot more.

However, the idea of exposure still remains. Streaming can be a way for people to try out new artists without committing to a $15 album (of which, Universal made many, many terrible ones).

As there is no way to measure the direct income derived from a person who streams two tracks, then goes to buy them from iTunes, and then pays $40 to see the artist in concert, it can be hard to judge.

I would stick my neck out and say that it helps though.

Lee J
US Music Jobs

LeeJarvis

When an artist starts out with earning no income from their music, they are quite happy to give it away for the exposure it may create. Obviously it is easier for a small band to offer a free mp3 and say "we may have lost a potential $1000" than it would be for Universal to do it with a Lady Gaga single and consider losing (potentially) a lot more.

However, the idea of exposure still remains. Streaming can be a way for people to try out new artists without committing to a $15 album (of which, Universal made many, many terrible ones).

As there is no way to measure the direct income derived from a person who streams two tracks, then goes to buy them from iTunes, and then pays $40 to see the artist in concert, it can be hard to judge.

I would stick my neck out and say that it helps though.

Lee Jarvis
US Music Jobs

Keith

My question is since the majors hold equity in Spotify how much money are they making all together from licensing and equity stakes. Also, are the artists getting paid a percentage of the ad revenue or subscription fee being charged as their music is being leveraged to attract these revenue streams? Do the majors make money off their stakes as a whole or off of their artists only? At the end of the day it seems if artists are getting shafted still in this business model.

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