2013: Streaming, Stealing, and the Money of Music

The advent of Spotify has sparked a myriad of discussion and criticism about the future of music listening and its impact on artists.  The issue began well before Spotify or even the internet, when fans traded bootlegged live recordings.  As technology developed, pirating became easier and easier, and Spotify popped up as an attempt to mitigate the damage.  It promises legal streaming access to an enormous volume of music, in (as digital music goes) good quality as well.

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I could fill up this whole article describing the various layers of this issue, from Thom Yorke pulling his solo material and his band Atoms for Peace’s music from Spotify in protest against compensation policies that he believed unfairly favored major labels over new artists to Foals frontman Yannis Philippakis calling Spotify royalties an “insulting pittance” in October and Spotify publicly releasing a vast amount of information defending their royalty payment system late last year.   Jana Hunter, the lead singer of Baltimore based indie rock band Lower Dens (whose haunting Nootropics placed #5 on my “Best of 2012” list), wrote an immensely thought-provoking piece in 2011 about mass consumption of music and Spotify’s effects on artists.  While Hunter acknowledged the role of Spotify in introducing listeners to new music, she complained about its role (alongside pirating) of perpetuating the idea of unlimited access to music for little to no money.

Elsewhere, an unforgettable chart demonstrates the sheer volume of Spotify streams necessary to provide a solo artist with revenue equivalent to the monthly mimum wage: 4,053,110.  By comparison, 1,161 sales of a physical album at a retail store will earn the same amount.  Keep in mind that both figures are for a solo artist: forget about bandmates and a manager.  Hunter’s article was from 2011 and the chart uses data from 2010 – since then, Spotify’s royalties have increased significantly (by 10-50 times per stream), but the numbers still leave little to be excited about.  One op-ed writer put the number of monthly Spotify streams needed to make the minimum wage as of July 2013 at 230,000.

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Last year, I keep track of what I listen to via last.fm. I was borderline fanatical about this, integrating every music listening platform into my last.fm account.  I am a dedicated album fan and very rarely listen only to singles. For this article, I am analying my listening habits as they relate to compensating the artists responsible to every 2013 album I listened all the way through at least one time.  This analysis does not include any music released before 2013 and probably represents half of what listened to that year.  I am also frank about money spent on my behalf on new music – if that bothers you, then don’t read further.  I think that transparency is necessary to really understand this issue and how it effects the different parties involved.

Through the college radio station where I had a show and from borrowing music from friends, I had the ability to legally obtain some free music.  As a birthday present from last year, I received 1 year of Spotify Unlimited.  Spotify Unlimited costs $4.99 a month ($59.88 a year).  Unlimited is the middle-tier spotify subscription: while it has no ads or listening limits, it does not grant mobile access.  Spotify may fail or flounder (and has yet to turn a profit, with mounting losses accompanying mounting earnings as it expands), but if it ever properly compensates artists, it will do so by gaining more paid, rather than free, subscribers.

First-ChartAt the present moment, even the Unlimited rate fails to properly compensate artists for their music.  Because of this, I decided to purchase music that I really loved even if the music was already on Spotify.  However, I do not have much spare change, so I only did this when I was really blown away by an album and found a reasonable deal to purchase it.

I have read several band’s breakdowns of how they earn revenue.  Based upon this information and numerous articles on the same issue, I have prepared a table containing each album I heard this year and the number of times I listened to a track on that album.  Next to this data is the total amount of money the band would have earned using various methods: Spotify, mp3 purchases, CD purchases (I only bought one vinyl, and it was used), and concert tickets to see the band.

Highlighted are the methods I used to listen to the band, and totalled at the end is the difference between the amount I spent and the amount the band would have earned if I had only used the free Spotify streaming service. These are all ‘ballpark’ calculations comparable to writing some numbers on the back of a napkin.  If you have a better formula for any of this, please let me know.  The full table is located at the end of the article.

Most of these artists are decently well-known but also not huge stadium bands, and naturally my high play counts tend to correlate with my Top 2013 list.  Also, keep in mind that several of the concert tickets are from the same event or festival.  The “Adjustments” column is meant to ensure that I do not overstate the income from Spotify if I also purchased the album and rarely listened to it through Spotify.  Finally, I counted gifts towards the “I spent” amount, including CDs and a sizable number of iTunes cards (>$70 worth) that I applied towards these purchases.

Here are some observations that I can draw from the data:

-My album of the year, Drifters/Love is the Devil by Dirty Beaches, was also my most-listened with 436 plays.  Using only free Spotify streaming, the artist compensation would have been $2.18.  By purchasing it digitally and listening through Spotify Unlimited, I calculate the actual artist compensation as $4.72.

-At #11 is Perpetual Surrender by the new band DIANA with just over 100 plays.  With only free Spotify streaming, they would have earned $0.59 in royalties.  By digitally purchasing the album after listening to it extensively on Spotify, I calculate their compensation as $2.64.

-Further down, Tim Hecker’s Virgins has 48 plays.  It was was on in my Top 10 for the year, but I only listened through Spotify.  Via free streaming, the compensation would be $0.24.  With Unlimited, I calculate the royalties as $0.36.

-Of the 79 new albums I heard this year, only the top 7 most-played would have earned their artists over $1 through free streaming, with over 200 streams each.  Only 1 additional album (so, the top 8 most-played) earned over a dollar through Spotify Unlimited.

-Based on my extremely rough calculations, the top 5 most-played albums (>250 plays each) would have earned more if I only listened to them using free streaming (being in the U.S., there are currently no limits on the number of times you can stream one track) than if I only purchased them digitally.

-If I purchased physical CDs of all of these albums, the cost would have been about $1185 (using $15/CD).

-Digital downloads do not appear to be a good solution, although I often purchased them just to provide the artists with more revenue.

As a reminder – this chart is meant (quite roughly) to track the amount of money that ended up solely with each artist as a direct result of my actions.  I (hopefully) also encouraged plenty of people to listen to some of this music.  The highlighted cells represent what I actually did.  Click the image to make it larger and the text legible.

Chart

From the tone of this piece, I have hopefully made it clear that I care about making sure that artists are properly compensated for their work.

At the end of the day, I find most of the articles and voices decrying Spotify as ripping off artists to be conveying simplistic arguments.  I see Spotify as the market attempting to squeeze some money out of a withering industry.  As the gap between those who see music as free (or just don’t want to pay for it) and those who see paying for music as a necessary component of a healthy music industry (either to have a proper sense of ownership or to compensate artists) widens, the true colors of music fans are starting to show.

I think Jana Hunter’s point that the idea of free access to nearly unlimited music cheapens our relationship with music has credibility.  I can see that in the kind of mass consumption that populates many close followers of current music.  But to each his (or her) own.  Someone may look at the volume of new music I listened to last year (79 full albums, and then plenty of older music) and say that it is impossible to have really cherished and absorbed all of it.  They wouldn’t be entirely wrong – Raum and Tim Hecker, for instance, delivered albums that required a patience that was difficult for me to muster with so much more in my immediate grasp.  But at the same time, I have learned an extraordinary amount and explored a vast, deep sea of moods, political statements, cultures, and approaches to creating art through sound, and I have loved every moment of it.  Spotify has granted me access to a vast trove of ambient, experimental, and cutting-edge music that I could never have accessed otherwise.  Whenever I discovered something new that I loved, I also dug deeper into music I had discovered before.  Spotify simply hasn’t cheapened my relationship with music – it has strengthened it, immensely.

Hunter also discusses how $20 is not an unreasonable price for a full album and all the work that is put into it by the artists.  This is true, and now (thanks to another gift) that I have a record player, I have been trying to cherish the ownership of the music in the form most commonly preferred by the artists (and by myself):.  This, interesting, is part of a wider trend – as those who never cared about paying for music in the first place pirate and/or use free services to greater and greater extends, those who want to own music are purchasing its most cherished form – vinyl – at increased rates.  By contrast, all other forms of physical purchases are diminishing in volume.

My (Small) Vinyl Collection

The music industry used to be inflated, and now that technology has eroded the appeal of ownership, reality is catching up.  I admire artists who risk living under the difficulty of erratic and low revenues.  I admire the artists who fight against the odds to succeed, to convey a message, to captivate large groups of people.  Really, I do.

But there isn’t exactly a significant economic need for even more great artists.  2013 had hundreds of wonderful records, and there just isn’t enough money in this economy to go around and support all of them.  Hunter’s band, Lower Dens, released a phenomenal record and I did what I could to spread word about it and support it.  But if I spent $20 on it, that would be $20 not going to something else: textbooks, food, or, most relevantly, another artist.  I listened to the album on Spotify, providing a band I admire with only a pittance of revenue.  But believe me, I loved that album.  I have dug deeply into it and continue to cherish it.

Looking over the table of 2013 listening/compensation data, it’s startling how little everyone earned through streaming, downloads, and CD purchases.  But I also spread $126.51 of revenue to artists, albeit small amounts between a large number of bands.

What’s the solution?  I am open-minded.  Here are ideas that pop into my head:

-If having access to a large volume of music cheapens your relationship with music, then limit your access to music to compensate.  You’d be better off purchasing one record and cherishing it than breezing through 20 records on free Spotify.

-If having access to a large volume of music enhances your relationship with music, then listen to a large volume of music.  Use tools like Spotify to explore sounds you never would have heard otherwise.

-If you pirate or listen to music for free, realize that ad-supported systems do not compensate artists appropriately.  My chart demonstrates that.  If, someday, you have money to spare, use it to purchase the music that you like from the artists you listened to.  If I win the lottery tomorrow, I’ll purchase every album I loved that I only listened to through streaming.

-Free Spotify can be a great publicity/exploration tool, regardless of other issues.

-If you are an artist, move beyond small-scale bickering and provide guidance.  The vast majority of efforts by artists to speak out against Spotify fail to acknowledge the circumstances that produced it.  There is a surplus of great music.  Technology has destroyed the illusion that a CD, a record, or even ownership is necessary to cherish music.  Many young people grow up knowing that with a few clicks, they can download a track instantly for free and never suffer consequences.  Spotify is a calculated response to that, and its owners are in touch with this environment in a way that its critics are not.  Critics also often indulge in a dual reality, where lawful listening habits that hurt artists are derided while the benefits of providing mass access to otherwise obscure works of art and innovation are ignored.

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-Music really shouldn’t be free.  Don’t just mindlessly pirate.

-One lesson to take away from the chart I made is simply that purchasing music, in and of itself, usually poorly compensates artists.  There are exceptions, although it is difficult to account for them without more information.  In purely economic terms, pirating music is not much worse than using an unpaid streaming service.

Screen-shot-2012-09-04-at-9_21_39-AMI think that staying the course with Spotify – including picking up the tab on the paid Spotify subscription I received as a 1-year gift – is the right thing to do, because Spotify’s only hope at developing into a service that can properly compensate artists is through paid subscribers.  This may not work, but if it does, it could, indeed, be the way of the future.  By-and-large, artists have historically been poorly-compensated for recorded music, and within this context I think it could potentially be a healthy step in the right direction.

The economic impact of Spotify, and music streaming services in general, is a mind-boggling, dense issue, and unfortunately often subjected to simplistic reasoning.  Same goes for pirating and the future of the music industry more broadly.

I’ve tried my best, here, to take on these issues.  In summary:

-Be an active and informed consumer.

-Take responsibility for how your actions impact other people.

-Chill out and find a way to really cherish the music you like.  You can’t please everyone.

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4 responses to “2013: Streaming, Stealing, and the Money of Music

  1. This is really, really interesting. I discover a lot of my music through YouTube, by watching fan music videos for movies and TV shows I like and then following the links. Where does that fit in ethically? On the one hand, I’m listening to songs without paying the musicians, but on the other, I’m encouraging the creativity of the amateur film editors who make the videos, and thereby contributing to creative culture and, furthermore, its democratization. Like you, I do typically end up buying the songs I enjoy the most, and also sometimes discover new movies and shows I wouldn’t otherwise have known about.

  2. Pingback: Albums on Vinyl: Quality, Cover Art, and Design | Neon Observatory·

  3. Pingback: 2015: One Writer’s Favorite Music So Far This Year | Neon Observatory·

  4. Pingback: One Writer’s View of the Top 50 Albums of 2015 | Neon Observatory·

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