At Least One Indie Artist Is Making Big $’s From Streaming Music
Guest post by Chris Duncan of The Orchard's Daily Rind.
If you're from outside of Scandinavia, you probably have no idea who Jonathan Johansson is. Let me fill you in. He's a very hip Swedish artist who has been steadily building a healthy fanbase in the Nordics with the aid of his label, Hybris.
It was recently reported in Denmark's Børsen newspaper (equivalent to the Financial Times or the Wall Street Journal) that Jonathan Johansson made more than $20,000 from streaming services alone in the first month of his album being available. This includes services such as Spotify and TDC Play. Even more interesting is the fact that this represents approximately 83% of his total income from digital services, including downloads, in Sweden. Not bad for an indie-pop artist singing in his native language.
Assuming fans keep listening to his music, this income should remain at a similar level beyond the release date, because unlike à la carte downloads or physical product, each play is monetised.
His label, Hybris, took the novel approach several years ago of lobbying their government, creating The Swedish Model along with 5 other independent labels pushing for increased licensing of their music to streaming services – even before the advent of Spotify. Using innovative ideas, offering 50/50 deals with their artists – and most importantly their ear for a potential hit – they're widely regarded as one of the coolest labels in Europe right now.
Jonathan's success on streaming sites, which has been replicated by other artists of similar calibre in these countries, raises interesting questions for music marketing professionals. Rather than setting a release date after the bulk of promotion, it often makes more sense for Hybris to get albums out as soon as they kick-off their promo run. They want listeners, not buyers.
Hybris' Mattias Lövkvist is convinced that this is one of the reasons why Jonathan Johansson's album became such a success. "With Spotify," he says, "you can see a very strong connection between an album that's been getting a good welcome by the media and the streams. Going from reading the daily magazine reviews and clicking on your computer once to hear the music is a very easy process. […] In a way we see a situation returning to how things were in the 90s, with media (traditional as well as new media) playing a bigger role and where sales charts better reflects what people listen to."
The market has become the pin-up of the access model and Lövkvist claims "If you are on the top list of the 100 most played at Spotify you are a star. Since they have such a massive number of users in Sweden, it's the first service since the arrival of the CD that has made itself culturally relevant."
The jury is still out on streaming for many, as critical mass has yet to be achieved in most of the major music markets, but it's extremely interesting to see these revolutionary changes happening beyond the traditional heartlands of the music industry.
Listen to Jonathan Johansson's Klagomuren on Spotify or find him on iTunes.
Did they reveal what his royalty per stream is? Or the the total royalty per stream payable to him and his label?
In experience I’ve had with the indie artists I manage and what I’ve read about what other indie artists and indie labels make per stream, it seems to come in at around $.002 per stream on average.
If that’s the case here, Jonathan would have to have had his music streamed 2M times in that month to get his $20,000 if the label is splitting the royalty 50/50 gross. If it’s 50/50 net, it would be tough to really calculate without knowing the label deducts before paying Jonathan.
If they’ll reveal their rate to you, Clyde, the model would spark a lot of discussion on the blog and in the US music biz in general.
Good point. However, I just reposted this for Chris Duncan of The Daily Rind.
I’ll see what I can find out.
It is pretty sad that 20k is considered “Big $.” I think the article would have a little more credibility if it said living wage, or above average return from streaming music.
Also the assumption of the same level of listening is a big one. This artist is in a battle for attention, and there is no way to know if they will keep the attention of the swedish market for that long. This needs to be revisited every month for at least 6 months before a real conclusion can be made.
I have seen several statements from different aggregators. The rate per stream paid by Spotify was $0.0048 in Q4 2011. Check http://www.spotidj.com/spotifyroyalties.htm for details. With a 50/50 split the artist should receive $0.0024 per stream.
To generate $20.000 by Spotify streams it would take 8.3 million streams.
But mind that it was not just Spotify in this case. The music was also streamed at TDC play. This telco pays far more per stream. €0.0481 ( $0,0631) per stream in 2010 and €0.037 ( $0.048) per stream in 2011.
I think $20K in one month is far above the living wage in most cities around the world. Maybe not Dubai…Where else?
And remember to reach 8.3 million streams it would only take 83k listeners to listen to a 10 song album 10 times in a given month. It’s still a big number but much easier to wrap your head around.
I’m afraid we can’t reveal rates, but an important thing to note is there is not one streaming rate. It depends which country the user is based in and whether they are a premium user or non-premium user – and it varies throughout time. Because Sweden is home to a much higher proportion of premium users, the rate is considerably higher than the rest of the world.
You are right. “living wage” is as equally a poor choice of words as “Big $.” How about “Nice Salary?”
Everything is relative. The point I was trying to make is that in an industry where the most successful of artists can make millions of dollars, saying a 240k a year is “big money” is hyperbole. It is a propaganda piece designed to say streaming will save everyone. One person does not make a trend, and neither does one month.
But lets say it is a trend and this is what a successful artist can expect from streaming. 240k is certainly a very nice salary anywhere in the world, and because this is a solo artist he gets it all. Your average 4 piece band if they made this much from streaming would have to split it 4 ways to 5k a month or a total 60k a year. As near as I can figure the average salary in Sweden is about 40k U.S. dollars. 60k is better but, is it newsworthy?
I’m sure a Spotify developer makes more than that in the US. I’m not sure in Sweden, but regardless they do probably have stock, and when spotify has their ipo and that developer cashes in his shares and it coincidentally adds up to 240k do you you think that someone will write an article about their “big money?” I think reporters will be focused on whoever made millions or billions of dollars.
and again I think that is sad. The tech guys, the VC’s, and the bankers get millions, and want the artist to think that their nice salary is big money.
Streaming revenue is not a salary, it is profit, you’re capitalizing work already done. Also, 2K/month is big money for artists in the music “industry”. There aren’t many getting that much in royalties, which is with what you can compare…
It says nothing about how he received all of the streams. Like what was the promotional model that lead to so many streams of the music. Did every review have a link directly to a stream? Is the label’s website streaming the music? That would be pertinent info I think.
The streams were organic. No specific promotional model, no special treatment from streaming services etc. The label’s website links through to Spotify, but this was not the main driver.
The primary reason for the number of streams was awareness driven by online and offline media coverage about the music.
Hope that helps!
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