Major Labels

Spotify On Track To Pay Labels $60 Million In 2010, But Is That Enough?

image from www.zath.co.uk European executives from the same major labels that have been keeping Spotify from the U.S. are singing its praises. "Spotify is on track to become the largest single partner we have." according to Jacob Herbst, Sony Sweden's director of digital sales. "We already have several artists who receive 80% of revenue via Spotify," added Martin Glemme who holds a similar position at Universal. "An artist who draws in half a million dollars can get $200-300,000 from Spotify."

Spotify's Already Paid $56M. How Much Went To Artists?

The company told Music Ally that it has paid $41 million in royalties through the end of August, a sharp rise from previous payouts. In the previous 12-14 months beginning with it's 2008 launch, Spotify had paid just $15 million to rightsholders for a total of $61 million to date from song streams in the seven European countries where it has launched.

Despite the suggestion of insiders like Glemme that the music service is good for artists, some industry observers question how much money the major labels, who also own 17-18% of Spotify, has shared with creators. And will this already incestuous relationship become even less artist friendly if Spotify launches in the U.S.?  After all, the labels are reportedly demanding big advance payments before green lighting a U.S.  launch. But no one is offering details as to how any label windfall might be shared with the people who make the music that Spotify is paying for.

More: Spotify Inches Closer To U.S. With Cash In Hand

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3 Comments

  1. It seems to me that Pandora paid $30 million to the labels last year, with 40 million users, while Spotify paid $30 million in the first eight months of 2010, with only 10 million users. In french we say CQFD (What You Need To Say)…

  2. I worked for majors for 20+ years. This whole situation with Spotify just shows that the people at the majors may be a new generation of MBA types. but they’re still gangsters, and this is extortion.
    In the old days, when a big chain retailer opened up, all they had to do was pass the credit check, predict their overall volume and place a big initial order. Even accounts that did well under a million dollars were able to buy direct from the majors. And then, the labels PAID THEM to advertise their releases! And they earned at least 30% from each CD they sold, often more.
    So now an account that does $60 million dollars (!) with the majors has to actually cough up huge advances, and give the labels a % of their company. It’s fucking extortion! It’s no way to build an industry, it’s using the furniture for firewood. And all because it’s a “license”.
    Steal all you can people. Download and share all the illegal copies you can. Burn the fucker down. Apocalyptic desperation is the only thing that will make these greedy bastards reasonable. Want to support artists? Buy direct from them. Otherwise steal every bit of copyright you can from the majors, it’s the only moral thing to do.

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