Real cost of Creating Music and Content

What is the real cost of creating music and content? Spotify CEO Daniel EK recently said that it’s close to zero, but any musician with a pulse knows he’s wrong. Explore this detailed breakdown of actual content creation costs.

by Chris Robley of Reverbnation Blog

Daniel Ek’s side hustle as a lightning-rod seems to be going very well.

Last year he shook the music industry with three big changes to Spotify’s royalty payments, effectively demonetizing tracks with less than 1000 streams per year…

… and the internet went nuts.

Then he compared aspiring musicians to amateur footballers.

And the internet went nuts.

Then Spotify argued it can pay less mechanical royalties to music publishers and songwriters because it’s now bundling audiobooks with music.

And the internet went nuts.

The cost of creating content: “close to zero?”

And then…

… Ek went and did the most controversial thing yet…

… tweeting something that (to me) sounded like…

… the truth?

Today, with the cost of creating content being close to zero, people can share an incredible amount of content. This has sparked my curiosity about the concept of long shelf life versus short shelf life. While much of what we see and hear quickly becomes obsolete, there are timeless ideas or even pieces of music that can remain relevant for decades or even centuries. 

For example, we’re witnessing a resurgence of Stoicism, with many of Marcus Aurelius’s insights still resonating thousands of years later. This makes me wonder: what are the most unintuitive, yet enduring ideas that aren’t frequently discussed today but might have a long shelf life? Also, what are we creating now that will still be valued and discussed hundreds or thousands of years from today?

-Daniel Ek, May 29, 2024

The swift backlash from artists

In response to Ek’s claim that the cost of creating content is “close to zero,” the internet…

… (yep) you guessed it:

Went nuts!

Artists like deadmau5 threatened to remove music from Spotify.

Countless other artists — both majors and indies — have registered their ire against Ek’s claims.

However, I was a bit baffled that this particular tweet offended so many musicians.

What’s so controversial?

Because first of all, Ek wasn’t talking exclusively about music in this tweet. He was talking about human creative output in the aggregate.

Songs, books, jpegs, TikTok videos. 

All of which actually ARE easier to create and distribute today than yesterday.

To say nothing of the ease of creation now versus 50 years ago.

What it USED TO COST to release music

While most creative expression that’s worth sharing DID take lots practice and skill to develop, and while musicians in particular CAN spend a lot of money making music if they choose — studio time, session player fees, the cost of gear — it’s also true that great music can be made WITHOUT all of those same costs.

Thanks to less-expensive or even free technology, the barrier to entry (from a cost-perspective) really has neared zero. Especially in relative terms.

Remember that decades ago, the process of creating and releasing successful music usually required (in order):

1. A&R interest
2. A record deal
3. A studio budget of hundreds of thousands or even millions of dollars
4. Wide physical distribution
5. Great marketing and radio promotion
6. Enough sales to justify that stores keep the album in stock
7. And more

I’m afraid to total up that price tag.

Today artists can create a track on their phone and garner billions of streams on Spotify.That may be putting it too simply, of course, because attention doesn’t just magically happen.

Artists who’ve gained traction may have worked to build an Instagram or TikTok following, or spent years streaming on Twitch or YouTube, or toured relentlessly, or assembled a great team.

But the point is: Many of the previous monetary barriers to making music are gone.

It’s probably more accurate to say:

The REQUISITE costs for making content have neared zero

Not to say you SHOULDN’T spend money to make your music.

Even a self-reliant producer who makes electronic music in their bedroom with the same gear they’ve used for years may one day ask, hmmm, what would it cost to get a real bagpipe player in here, or to get my favorite singer to add some vocals?

Personally, I dream of recording with an orchestra one day. And the going rate for 80 pro instrumentalists is far from “zero!”

But the fact remains that the song of mine that has the most streams on Spotify is a folk track I performed and recorded entirely myself. So I don’t HAVE to go that spendy orchestral route in order to reach an audience, is the point. And neither does anyone else today.

The same is true for video. Non-fiction. Poems. Design. Comedy.

The only required cost is the time it takes you to develop your craft. Plus an iPhone.

That’s why there is more art being made and released today than ever before.

If you’re a rock band, would you prefer real drums in a pro studio to whatever you can cook up on your computer? Probably so. But you can distribute your song to Spotify whether those drums are programmed or mic’d.

If you’re a comedian, would it be nice to have major investment in your work? To highlight your wit in an hour-long Netflix special? Absolutely.

But that doesn’t change the fact that thousands of comedians can just hop on Instagram and tell a joke. Whether it’s on Netflix or Instagram, a laugh is a laugh.

Oh no! Are we really talking about Supply & Demand again?

All this means there is much more creative output being shared across formats and platforms. And it’s global.

THIS is the reality Daniel Ek was wrestling with in his tweet. Wondering what the sheer volume of that output means for the ways in which any one particular piece of content will rise to the level of cultural awareness. And how long a piece of content can remain there.

As musicians, we don’t like to see our own art as part of an economic system. Music is connective, ineffable, necessary. It’s priceless, that’s true.

Yet music is now delivered (and let’s face it, often consumed) as if it’s an inexhaustible commodity. In a way, it is that too.

Which suspends us in a contradiction, and inspires debate after debate. Is music priceless or worth less? Is the cost of creation “near zero” or “hey, it took me my whole life to write this song?”

Many things can be true at once.

The supply of music is staggering. The supply of content is staggering. What does that do to demand? 

Seems like an obvious question to ask in 2024. And a complicated one. So I didn’t think it was out-of-bounds for Daniel Ek to ask it.

Tread lightly, sir!

Of course Daniel Ek is the leader of one of the world’s most important music companies. A company that has facilitated, accelerated, and profited from the commodification of music.

So perhaps he could’ve chosen his words better. https://giphy.com/embed/Js8lGilhQ0qPeWs4OT

Especially after so many other controversial statements and policy shifts over the past year. And a few friends of mine have suggested there’s no other way to read his recent tweet except in the light of all those previous controversies.

But I do believe, in this case, his words were taken out of context. And if musicians want to advocate for their interests, and bring pressure against powerful players in the industry, I think it’s important to level outrage selectively, when things are actually outrageous.

Do you make “content?”

Speaking of outrage, I’ve focused so much here on the COST claims in Ek’s tweet, I haven’t even mentioned the OTHER supposed outrage. That he used the word “content!”

“I make music, not content,” exclaimed thousands of artists.

Do you make content? You do! You make musical content, otherwise known as music. Your art is content. It just means it has stuff in it.

Lyrical content, rhythmic content, harmonic and melodic content, emotional content,…

Plus, since Daniel Ek wasn’t specifically talking about music in the tweet — remember he referenced the ancient writings of Marcus Aurelius — content is much easier to type than “a wide range of creative expression across multiple formats and platforms.”https://giphy.com/embed/j6wRfBPi87Z2sTwnkK

Once upon a time a book had to be printed, bound, packaged, and shipped. A symphony might live on vinyl or as dozens of pages of notation. A film came in a canister and got projected on a giant screen. An image might be canvas and oil.

But so much of the expressive work we consume today is delivered in a uniform way: 0s and 1s.

They’re digital files. Going through digital pipes.

In that context especially, “content” seems okay to me.

It’s a catchall word. 

I don’t think he meant it to diminish your music.

What do you think?

These are just my own thoughts here, and hey, I could be wrong.

Do you have strong feelings about Daniel Ek’s latest tweet, or any of the big Spotify news over the past year?

I’d love to hear it. Leave your take in the comments of this video.