Making Dollars: Clearing Up Spotify Payment Confusion – hypebot
(UPDATED) By David Macias, president of Nashville based label services company Thirty Tigers.
Much of the recent discourse about the music business reminds me of listening to partisan political commentators talk about America. There are a lot of conspiracy theories and misguided notions that perpetuate the worst stereotypes about a group of people. I am writing to defend the honor of Spotify and the music business, or at least some of it, by looking at the facts about what Spotify pays the owners of recordings.
First of all, let me tell you that I run a company that distributes and markets albums, mostly for artists that have not signed deals with record companies, but own their own masters. We collect money for them and distribute it out to them (in addition to providing other services). So I actually know what artists get paid. I’m the one that writes their checks.
An artist shares some Spotify numbers
A recent article in Pitchfork by Damon Krukowski claims that indie artists gets paid .005 cents per stream, then goes on to show his math: $29.80 paid for 5,960 streams. That’s .005 DOLLARS, not .005 cents. That’s off by a multiple of 100. Many acts, such as Grizzly Bear, took that incorrect math and tweeted to their fan base with extrapolated, incorrect assumptions about what artists get paid, and I watched scads of people retweet that misinformation, with the inference that Spotify and/or other elements in the music industry are not dealing with artists fairly.
I understand that he is saying that he did not get paid even that, but that the songwriters for “Tugboat” were paid a total of $1.05, the amount that was on his BMI statement. BMI does not collect for owners of recordings; they only collect for owners of publishing copyrights and songwriters. Spotify has a Pandora-like radio player on their site, and that part of their service pays out in a similar fashion to Pandora. You cannot listen to “Tugboat” on demand through this service. The Digital Millennium Copyright Act (DMCA) governs those payments, and the publishing community fights hard to get that rate as high as they can. Pandora is currently paying over 50% of all their earned revenues to owners of the recordings, whereas they pay publishers and songwriters about one tenth of that. They are currently lobbying hard and issuing lawsuits to bring their rates down to owners of both recording and publishing copyrights, saying that they cannot run a radio business paying out over 60% of revenues, when their competitors at SiriusXM and terrestrial radio are paying much, much less than that for the use of music. But if you’re saying that Pandora only paid 21 cents for the use of your composition, my guess is that you’ll find another $2.10 or so on the combined Sound Exchange (who administers compensation for the owners of recording copyrights paid out by digital radio providers) label and artist statements, compensating the owner of the recording.
- On Grizzly Bear And The Spotify Payment Confusion – hypebot (gearslutz.com)
- It Turns Out Bands Make Basically Nothing From SPOTIFY & PANDORA Streaming Fees (metalinjection.net)
- Spotify’s plan for rescuing the music industry: let it fall apart first (qz.com)
- A tight Spotify: Is there a better way to make music streaming sites pay? (independent.co.uk)
- The Debate Over Net Radio Royalties (californiamusicindustrysummit.wordpress.com)
- Pandora Tries To Rip Off Artists – Things Just Keep Getting Worse (nashvillegab.com)
- Are Pandora and Spotify Scrimping on Music to Attract ‘Speculative Capital’? (betabeat.com)
- Pandora Has A Problem With Rihanna That Could Kill The Company (P) (businessinsider.com)