Spotify CEO claims the "cost of creating content" is "close to zero"

[techristian]

A little article to get your blood boiling a bit.

 

https://www.musicradar.com/news/spotify-ceo-content-zero

 

Dan

[Anderton]

This article about whether streaming can be fixed is also interesting.

 

But I don't think Ek's comment is totally off the mark. I come from a background where studio time was super-expensive, as was the cost of producers, engineers, studio maintenance, tour aupport, promotion, etc. Putting music out into the world required a serious financial commitment. This inherently limited how much music was released. 

 

People  complain about paying a few hundred dollars for a DAW that basically puts a $250,000 studio in your $1,000-$3,000 computer. The DAW's cost would have paid for one reel of 2" tape, which stored 30 minutes of music at 15 ips. 

 

Then there's the "but what about all the time and energy I put into my music?" Well, if people don't want to listen to it, that's your problem. I have a YouTube channel with music that people other than me think is extremely good, but that doesn't entitle me to anything. If I'm not willing to put everything into a career in music, as I did quite sucessfully at one point in my life, that's on me - not on millions of people not checking out my YouTube channel.

 

Yes, streaming's current model is pretty messed up. But the reality is that musicians can't reverse the law of supply and demand. The supply is overwhelming compared to the demand. When that happens in an economy, there's deflation, and goods have progressively less value. So it is with music.

 

 

[David Emm]

2 hours ago, Anderton said:

Yes, streaming's current model is pretty messed up. But the reality is that musicians can't reverse the law of supply and demand. The supply is overwhelming compared to the demand. When that happens in an economy, there's deflation, and goods have progressively less value. So it is with music.

 

I don't know quite how to be gracious about it, but IMO, COVID played a part in it. Being isolated as so many of us were, everyone who had been playing a couple of Roland boxes as a hobby became a wannabe and flooded streaming outlets with rather generic, derivative music. Its one thing to pucker up over a style you just don't happen to care for personally. Its another to face the reality of people going for what's easy until it starts clogging the pipes with its sheer weight. It distorted the browsing model people had been using until then. AI didn't have to appear for tons of bland EDM chaff to become a problem of sorts. I like synths, but yeesh, how many Squarepusher clones can the place absorb? Craig's point about our unit value having dropped in the crush of numbers is inarguable.

 

My modest bias also comes from having started on piano as a kid, so I believe in a certain kind of creative sweat being invested or the results will be too robotic or bland. GIGO. Even a noob can hear the difference between a piece born of 6 months' sweat and something born this afternoon that's 90% preset 12 on a TR-08.

 

There's no way I'm going to stop musically, of course. I'm already too crazy to become a painter! I keep recalling the moment when Leonard Bernstein was asked how he and his musicians coped with all of the horror in the world. He replied "We respond by creating more beautiful music." Well said, because there IS no sensible alternative when you already have your arms wrapped around the purest thing available, next to a dog! Few of us will ever hit some magical 100% level, but hey, I have three and a half orchestras, a Mellotron, a CS-80 and a glockenspiel made of tuned wrenches. If I can't devise something of merit with all of that, up mine with a Leslie!  

[ElmerJFudd]

Digitization - every piece of music we ever saved in any format is readily available.  And for getting close to 40 years any “new” music has been released straight to digital.  No one could ever hear it all.  

[Anderton]

6 hours ago, ElmerJFudd said:

No one could ever hear it all.  

 

And I wouldn't want to hear a lot of it anyway.

[Anderton]

But here's what really bothers me: If I subscribe, my money doesn’t reward the people I listen to—which is absurd. What I pay goes into a big pot, with the money distributed based on which artists stream the most. So, most of my money goes to Taylor Swift, Drake, Bad Bunny, the Weeknd, and other high-volume streamers. Imagine how weird it would have been if in 1982 you bought the CD “Music for Nine Post Cards” by Hiroshi Yoshimura, but virtually all of what you paid went to Michael Jackson because he sold a lot of records that year.

[Stokely]

Yeah that sucks.  I've never used Spotify, and probably wouldn't based on that.

I also don't give much credence to the philosophizing of billionaires.  Most of them have lost all "human perspective" from my point of view.

[Anderton]

8 hours ago, Stokely said:

Yeah that sucks.  I've never used Spotify, and probably wouldn't based on that.

 

I don't subscribe to Spotify. But I do listen to it every now and then...which reminds me of why I don't listen to it. I actually like TuneIn.com better. It's less precious but it gets the job done.

[Notes_Norton]

The “Gatekeepers” have always made the bulk of the money, and exploited the artists.

How many one-hit wonders made close to zero on their recordings, while the record companies made millions? Too many to count.

Marcia Griffiths never made a penny in royalties from “The Electric Boogie” (The Electric Slide).
 

Artists do it because we love it, and we work more hours than a factory worker, but our art is worthless, except to the people who know how to promote it, and if lucky, we get crumbs off the table. For every Taylor Swift, Paul McCartney, and Nicki Minaj, there are hundreds, perhaps thousands, as good, almost as good, or better who have trouble paying their rent.

It's a shame, and I wish I knew how to fix it.

 

Notes ♫

[Anderton]

3 hours ago, Notes_Norton said:

It's a shame, and I wish I knew how to fix it.

 

Unfortunately, it cannot be fixed. Musicians can't repeal the law of supply and demand. The supply of recorded music is overwhelming. 22,000,000 songs will be uploaded to Spotify in 2024. If even 1% of that music is exceptionally wonderful and I want to hear it, there's no way I'll be able to listen to 220,000 songs in a year.

 

In local music scenes, you have a better chance of demand outstripping supply. If you can find a niche and fill it way better than anyone else, you can have success. Bob, I believe you're a good example of that. You'll never make anything from Spotify, but you can make a comfortable living from doing live performance within your niche.

[Notes_Norton]

Supply and demand works with just about anything.

 

In earlier days, the radio stations controlled the supply. That was when product managers took over what will be played. That left a lot of politics and under the counter money controlling what we will hear. And that lead to exploitation of a number of one-hit-wonders who never broke even on their recording/production/promotion costs that came out of their royalties.

Now we have the opposite problem. The demand is the same, but the supply is overwhelming. Someone who makes music has to become an expert marketer to get his/her song heard. For someone who is not established enough to be a household name, I'd guess great marketing is more important than great music.

 

As you mentioned, Craig, I found my own little niche. Live performance as a cover artist. My goal is to give a live performance that is better than my competition. People already know and love the popular songs I play, and I put my own little twist on them. Some, close to the recording, some radically different, most somewhere in between.

 

We show up on time, do our best to play what the audience wants when they want it, play at an appropriate volume for the gig, dress appropriately, and spread joy. 

My goals. (1) If it's a commercial gig, I do everything I can to make the 'house' money. I want the customers to stay, have so much fun they want to come back, and spend money.  (2) If it's a private gig, I want the guests to have such a good time that they tell the host "Thank you for a wonderful evening."

 

I don't have Taylor Swift or Mick Jagger money, but enough to live, but I don't have to be a wage slave either.

 

I'm also lucky enough to have been born in my era. When I was young, every hotel from a Holiday In up, every sing;e's bar, and every show club had a bad at least 5 days a week. Private parties had bands, DJs were on the radio, not at a live gathering of people. Any musician who was halfway decent could get gigs. Things are different now, so are the opportunities.

The then future Mrs. Notes and I started this duo in 1985. The only time we were out of work was during the COVID lockdown. We live on our reputation, and still do our best with the same two goals. We're a lot older now, so I think if we were to move, we'd be in trouble. There is age discrimination in this biz. Fortunately, we are a local household name.

 

The cost of creation has always been low (not close to zero). The artist has to finance equipment and supplies. For a painter, it's canvas, paint, framing, and so on. For a musician it's gear and supplies (reeds for my sax are $3.50 each, strings aren't cheap and a good instrument is costly).

 

What Spotify or the gallery for visual art doesn't account for is the time investment. To learn a new song, and then record the drums, bass, and other comp parts, can take me days. But they sound better than the karaoke tracks my competitors use. I'm not making any money when I'm doing that. If I wrote my own songs, it would take even more time - time I could be working at a wage slave job and getting paid by the hour. So I wouldn't call the cost of creation close to zero.

But as you mentioned, it's supply and demand. Being a musician is a small business. You could open another restaurant, and odds are, you will be out of business in 5 years or less. Same for any small business. The very lucky will make a fortune (think McCartney), the majority will fail and try again, and the rest who have figured it out and had the right opportunity will make a living.

So my entertainment business is no different from the guy who owns a small appliance or furniture store. We figure out our local market, hope to make the right decisions, and in the end, pay the mortgage and buy enough food to stay healthy.

 

Insights and incites by Notes ♫

 

 

[cphollis]

While music itself may be a commodity, a peak musical moment or experience is most definitely *not* a commodity.  People will pay for those entertaining moments and experiences -- witness recent ticket prices.

 

In my own local gig market, someone who would have zero interest in purchasing my band's music will routinely show up to our gigs, spend $100 on food and drink, and then throw $20 in the tip jar. 

 

To create that experience takes eight people four hours each for the gig (plus a bunch of gear), so in terms of time pricing, it's never going to get any cheaper.

[Anderton]

6 hours ago, cphollis said:

In my own local gig market, someone who would have zero interest in purchasing my band's music will routinely show up to our gigs, spend $100 on food and drink, and then throw $20 in the tip jar. 

 

That's the future. Think about it - until less than a hundred years ago, nobody made music from recording because there was no such thing as commercially available recordings. So really, we've just gone back to our musical roots that were established over millennia. Live performance delivers an experience that recorded music - mono, stereo, Atmos, whatever - cannot duplicate.

 

The next to fall: "Perfect" live performances with hard drives and lip-synching. People will want real people, playing real music, having a good time, making mistakes, cracking jokes, and relating to an audience.   

[Philbo King]

It's really tough to do a "all other things being equal" comparison in commercial music because every possible aspect of music production, consumption, distribution and performance has long been corrupted by Hunter Thompsons "plastic money trench" effect. 

 

Payola, Ticketron, Live Nation, rap and hiphop criminal producers, even New Jersey mobsters telling Frankie Vallie that he works for them (late 50s), record labels and agents and management and PROs siphoning off money, ad nauseum.  Streaming is just the enshittified modern version of whats been going on for about 100 years.

 

I'm content to create my own CDs, mail them out to public radio DJs I know, and sell them at gigs and blues fests to break even.  This is likely the highest standard I can attain given the RICO aspects of the music industry.

 

I sure as hell will never distribute any of my music via streaming again.

[Notes_Norton]

14 hours ago, Anderton said:

That's the future. Think about it - until less than a hundred years ago, nobody made music from recording because there was no such thing as commercially available recordings. So really, we've just gone back to our musical roots that were established over millennia. Live performance delivers an experience that recorded music - mono, stereo, Atmos, whatever - cannot duplicate.

 

Years ago, I read that in the early days of recordings, on those 78rpm disks, the artists didn't get paid for their efforts. These artists would include Glenn Miller, Duke Ellington, Artie Shaw and the other swing bands. The recordings were merely a promotional tool to get people to come out and listen to the band play live.

Gigging is what I've done since I graduated from school. I tried to enlist in the Air Force Band. Since I was first chair sax in the all-star band every year I was in school, I figured I could pass the audition. But the one I couldn't pass was the physical. I had severe bronchitis when I was young, and was just getting over an attack when my physical was scheduled. I got a classification of 4F.

 

So instead, I went on the road in a rock band, mostly playing college towns (before DJs took that market), playing music, hitting on young babes, going to the next town, and doing the same thing. Eventually, we graduated to opening concerts for major stars when their recordings were top 10 on Billboard. The record company offered us a deal, but it was a bad deal, and that ended that era. But it didn't end my gigging.

I think most recorded people didn't make much money with their records. The Taylor Swift and Elvis Presley types are the exception. I read that Marcia Griffiths never made a penny from her Electric Boogie (Electric Slide) record, but it helped her get more public performances. By the time the record company takes inflated recording, distribution, and promotion fees out of your meager royalties, if your recording doesn't to insanely viral, you become a one disc wonder, lick your metaphorical wounds, and charge more for your public performances because you had a hit on Billboard.

For every Taylor Swift there are thousands of equally good singer/players who will never get the chance to become famous.

I was talking to Tom Scott one night when he was staying in a Hyatt we were gigging about. He said that there is a sax player , playing in a Holiday Inn somewhere like Valparaiso, Indiana, that could put him (Tom) in his back pocket. But he said he was in the right place, at the right time, had the right connections, and could do the job. 

So perhaps for most, nothing has changed since those early 78rpm promotional recordings. Having a hit record is simply great promotion for your live acts.

Here I am, past retirement stage, still making my living doing music and nothing but music. I'm not rich, or even upper middle class, but our mortgage is paid, and I live in a nice neighborhood. I don't have luxury items, but I don't have any debt either. In the tourist season we still gig an average of 25 gigs per month, and in the off-season, we're lucky to get 5/month. But feast and famine is the way of everyone in the hospitality industry here in FL. In the season we make more than we need, and the excess pays for the slack season.

We play to the audience, and we play with the audience. We crack jokes, we make mistakes (mostly the audience doesn't notice), and we have a good time. It's the most fun Mrs. Notes and I can have with our clothes on, and the fun is contagious. It's not a lecture, it's a dialog with the audience. 

If we make a big mistake on stage, one we can't cover up, we crack our own jokes about it, that way the audience is laughing with us, not at us. Everyone has “one of those days” and we're to the point where it almost never happens, but when it does, we make the best of the situation. Actually, I've thought about faking a train wreck. The audience really bonds with you because they too have had one of those days. But, I don't think I'd be a good faker, so I just leave that to my imagination.

People come out to see us. That makes people want to hire us. It's all good.

 

Notes ♫

[Anderton]

2 hours ago, Notes_Norton said:

Years ago, I read that in the early days of recordings, on those 78rpm disks, the artists didn't get paid for their efforts. These artists would include Glenn Miller, Duke Ellington, Artie Shaw and the other swing bands. The recordings were merely a promotional tool to get people to come out and listen to the band play live.

 

I wish you had a link for that. I found info that recordings were viewed primarily as promotional tools for live gigs, but artists did get paid a small percentage of the sales price (at least in theory).

[AnotherScott]

3 hours ago, Notes_Norton said:

Years ago, I read that in the early days of recordings, on those 78rpm disks, the artists didn't get paid for their efforts. These artists would include Glenn Miller, Duke Ellington, Artie Shaw and the other swing bands. The recordings were merely a promotional tool to get people to come out and listen to the band play live.

 

With artists getting paid .003 cents per stream, we're not so far from that today.

[Anderton]

12 hours ago, AnotherScott said:

With artists getting paid .003 cents per stream, we're not so far from that today.

 

Here are the latest figures I got from ChatGPT, so there's a 50/50 chance they're correct

 

Qobuz pays $0.022 per stream, Napster $0.019 - $0.021 per stream, Tidal $0.013 per stream, Deezer $0.0064 per stream, Apple Music $0.0056 - $0.0078 per stream, Spotify $0.0044 per stream, and Amazon Music $0.00402 per stream.

 

So, what's wrong with this picture? The three richest companies are the stingiest when it comes to rewarding the artists without whom their streaming services wouldn’t exist.

[Thethirdapple]

Quote

HEADLINES:

Musician claims the "cost of creating Spotify" is "close to zero"

 

In other news:

Spotify CEO bites the hand which feeds him!

 

 

Considering the upside down nature of our economic reality we, might as well piss in a violin to make things better.

 

 

 

PEACE

_
_
_

[Notes_Norton]

19 hours ago, Anderton said:

 

I wish you had a link for that. I found info that recordings were viewed primarily as promotional tools for live gigs, but artists did get paid a small percentage of the sales price (at least in theory).

It was many decades ago, and I read it in a trade magazine.

 

But it stands to reason. Before recordings, the publishers of the sheet music and the composers made all the money. When records came along, the publishers and composers already had the business model, the money, and the upper hand.

 

Artists are usually not great businessmen or businesswomen. There are exceptions, of course.

 

Notes ♫

[ProfD]

Recorded music was a business card at one point in time until it eventually became big business. 

 

There's no shortage of vinyl, tapes and CDs that cost big bucks to make containing musical garbage littering landfills.

 

I also believe live performance and delivering an experience will stand as the primary means by which most artists and musicians get paid. 

 

Non-performance-oriented acts won't matter beyond YouTube.  Cream will rise to the top among talented folks especially those who are savvy enough to ruthlessly market and promote themselves in order to build an audience.😎

[Notes_Norton]

Unless you already have the industry connections, or the mean$ to get the industry connections, you have little chance of becoming the next Taylor Swift, or making any kind of 'real money' in the recording industry. You might have a better chance buy buying a Powerball ticket. 

It's always been a long shot. I remember reading an article where people at studios hired to make the first pass at a demo recording got more in a day than they could listen to. People enclosed money, women's underwear, gift cards, or anything else they could think of to draw their attention to their submission. The vast majority were trashed without listening or by putting them in, hearing a little 60Hz hum, or something else not pertaining to the music, ejected and trashed.

For those who made the first cut, the odds were still against you. No matter how good the music is/was.

 

Now those gatekeepers are gone, but a zillion recordings a day released on YTube, Spotify and all the others. How are enough people going to notice you and give you a fraction of a penny to stream your song?

 

Now if you are a nepo baby, or already have a strong industry connection, you have a chance. You don't even need talent, although it's better if you have it.

So if getting rich and famous by being a recording artist is your goal, be aware that the odds are against you, so you need to devise some promotion in addition to your music to get you there. As an old musician advised me when I was young, “You need a gimmick.” Elvis used his hips, Beatles had long hair during the crew-cut days, Kiss put on clown makeup, Billy Idol wore a dog collar and cuffs with no shirt, Alice Cooper went in drag on their first LP, Devo wore jump suits and silly hats, and so on. 

 

On the other hand, you can work the local trade, and make a living doing nothing but music.

What does your local area have that works? Can you do it better? Can you be a chameleon so you can do a variety of gigs? There isn't as much work as there was before DJs and Karaoke came in, but there is still work. The odds are good that if you do it right, you can make a living at it. And while you are making a living doing music and nothing but music, you can always still chace your dream of being the next Taylor Swift.

 

Notes ♫

[jerrythek]

On 6/12/2024 at 1:02 PM, Stokely said:

Yeah that sucks.  I've never used Spotify, and probably wouldn't based on that.

I'm certainly not defending Spotify, but the payout method seems to be the same for all the services. Can someone confirm for me if that is correct or not? If so (and I believe it is true), they all operate that way, and the record labels are as much to blame as the streaming service. They made these deals... because they (the record labels) get their money, and don't seem to care for the artists (beyond the handful of megastars). I don't understand why there isn't a one-to-one relationship between stream counts and the artist being streamed.

[Anderton]

1 hour ago, jerrythek said:

I'm certainly not defending Spotify, but the payout method seems to be the same for all the services. Can someone confirm for me if that is correct or not?

It is the same model for all services, but as noted above, only Amazon Music pays less per stream than Spotify (0.00402 vs. 0.0044). According to iMusician, citing Deezer as an example, "Like most streaming platforms, Deezer doesn’t pay artists directly for their streams. In the same way that artists must use a distributor to get their music on Spotify, payment is also handled through the distributor. Deezer transfers the revenue to the music distributors approximately 3-4 months after the music has been streamed."

 

Although Deezer is trying to create a more equitable system for artists, it's not based on direct payments.

[David Emm]

Well, what do you know! The cost of putting Spotify in my rear-view mirror IS zero! Sweet. 

 

I do spend a little time each week breezing through a few places, to hear what's new, or catch something I missed. I randomly hear pieces of real merit, or revisit things like Keith Jarret's Hymns/Spheres. I make sure not to just sit in my own little bubble.  

 

The thing is... am I an elitist goober if I spend most of my musical capital on my own compositions?

The Magic 8-Ball said "Sod off!," so I guess I'm good to go. 

[Anderton]

1 hour ago, David Emm said:

am I an elitist goober if I spend most of my musical capital on my own compositions?

 

I think the correct technical term is not "elitist goober," but "musician."

[David Emm]

21 hours ago, Anderton said:

I think the correct technical term is not "elitist goober," but "musician."

 

Fair enough! However, I have to shoulder the "elitist" part to some extent. I get a certain wicked thrill from showing people a screen full of Logic doings and then hitting Play. They generally go a bit blank, trying to process the esoteric carnival of it. I try to simply take pride in it; if I get arrogant, I deserve a swift kick to the yarblockos. 😵