Spotify Isn’t Ripping Off Artists, The Labels Are
Written by Ernesto on November 23, 2009A few days ago we reported that Lady Gaga earned a measly $167 for more than a million plays on the music streaming service, Spotify. According to new information received from music industry insiders, it turns out that Spotify isn’t ripping off the artists, the labels are.
By allowing its users to access millions of songs for free, the music streaming Spotify has revolutionized the music industry by handing them a potential competitor to illegal downloading.
Unfortunately, the labels themselves are not as enthusiastic as most users are, as they doubt the service’s ability to generate enough revenue.
Indeed, if we take a look at the numbers relating to Lady Gaga that we reported a few days ago, Spotify is barely generating more revenue than most artists make from illicit file-sharing. With an income of only $167 for more than a million plays, he/she is not going to be able to pay the rent.
However, it turns out that this might not be the fault of Spotify’s business model, but rather the involvement of some of the major labels in the project. As reported before, Sony BMG bought 5.8% of Spotify for 2,935 Euros, Universal Music got 4.8% for 2,446 Euros, Warner Music paid 1,957 Euros for 3.8% and EMI pocketed 1.9% for an investment of 980 Euros.
Lady Gaga is signed by Def Jam (Universal) which partly owns Spotify, which probably has a significant impact on the revenue she makes. After all, the major labels wouldn’t pay the artists from their own pockets would they?
This was confirmed recently by Lily Allen who commented on Twitter: “Did you know the major[s] own hold massive stakes in Spotify, and earn advertising revenue at yet another loss to the artist?”
Of course, this diminished revenue wouldn’t be a problem if Lily signed her music up for digital distribution with a service like RouteNote, who offer the full per track rate, and only take 10% on the back end.
In fact, TorrentFreak has heard from various sources that independent distributors can get deals of at least $0.03 per play with Spotify. This adds up to a pay day of $30,000 instead of $167 for a million plays, which suddenly sounds like an altogether better deal.
Previously: Top 10 Most Pirated Movies on BitTorrent
Next: European Commission: No 3 Strikes Without Judicial Oversight
68 Responses
suprise suprise
Surprise!
Surprise, though somehow… not surprised.
Surprise x 4
nah, not really surprised at all.
merely reason #284 why we shouldn’t buy cd’s anymore. the studios are the real criminals here.
(No) Surprise!
lol @ the labels. Oh wait, they’re rich and I’m not. Well, at least I get to go to heaven
Hello!? Is there anybody in there? Just smile if you can hear me……
Although I do get angry with these folks that think the “industry” has thier rights. I do respect TorrentFreak for allowing both sides of the argument……
Let the fall chips where they may…..
Amazing how they can turn the 167 figure paid to the artist into a reason to vilify the consumer and make the labels look holier than god.
Unfortunately, most media reports will buy the Labels BS and regurgitate the anti-consumer propaganda.
Surprise buttraep by labels!
Artists should go over to being indipendant.
I have been saying this for years. The biggest enemy artists have are their labels, promoters and management. These talentless bloodsuckers have brought financial ruin to more artists than anything else ever will. Recording artists need to start to sell their music themselves.
Eh, screw the damn artists already.
As long as the major labels steal all the money, that’s all that really matters. Least we forget, that’s what copyright is all about. I’m sick and tired of these artists and their nerve for wanting to earn a living from their own work. That’s unacceptable!
My big label buddy neo|riaa can tell you more… <3
a decent business model that fits the current consumer climate works better financially for the artist and consumer than the dinosaur model still being pursued by big labels, big surprise.
times are changing
erm, what Lily Alen said constitutes as a proof? Confirmed what? :facepalm:
“This was confirmed recently by Lily Allen [...]”
well, then it must be true! i knew it!
for christ’s sake TF, a whole article just to advertise RouteNote? you sold out bumwads
Sony BMG bought 5.8% of Spotify for 2,935 Euros, Universal Music got 4.8% for 2,446 Euros, Warner Music paid 1,957 Euros for 3.8% and EMI pocketed 1.9% for an investment of 980 Euros.
That seems incredibly low. Are those figures not in thousands of euros?
the government needs to put money into labels a special bank
Oh im sorry why do we need the labels again?
Ohhh right to be a monopoly and act like there the only one who can work a mixer board..
Labels better get on track.. there time is running out.
That $167 was compensation from the STIM, but from my understanding that did not include revenues generated through Ads/ Premium-Accounts. Does that even involve any record label?
Been saying this to people for a while now. Utter bullshit on the record companies part.
and thats exactly why people shouldnt buy cds, unless the artist is a madonna, metallica or U2. They wont see anything from CD sales anyway.
Download as much music as you can, if you really like someone, go to watch them when they tour and buy some merchandise. That way they get a big cut and the rip off labels dont see a penny of your money.
Indie artists on Jamendo get more than new artists via labels.
what a pity silly lily didn’t say anything about this type of behaviour by the various labels before the over condemnation she made of supposed illegal file sharing. perhaps now she and the rest of those that have been duped can/will see the error of their ways and put the blame fairly and squarely where it should be, ie at the doors of the music industry!!
Allen said she doesn’t mind if you sell/ buy pirated copies of her works, because you still put value in it. The artist surely profits from that, financially.
Ohh surprise sur-fucking-prise. Honestly, does this actually come as a shock to anyone? If so, wake up, you’re in the 21st century.
$0.03 is completely unrealistic. I would love to know who got that deal.
Between $0.01-$0.005 is closer to the norm.
Just like the British MP’s are finding out (with some of them now facing criminal charges), you can only rip the public off for so long until you get busted.
We, as the British public need to push our MP’s into passing a law forcing the labels into publishing their finances (broken down into revenues, expenses and payments to the artists). Maybe then the piracy scam by the labels will be exposed and the artists will get a fair deal.
Write to your MP at http://www.theyworkforyou.com
The net is closing in on the labels and their extortion racket.. Show your support – it only takes a couple of minutes of your time, and might end up with a better and fairer system for everyone!
To borrow a line from the Hitchhiler’s Guide To The Galaxy (when Arthur Dent discovers the Earth was made only for the benefit of a few white mice) “Surprise is no longer adequate and he is (in this case we are) forced to resort to astonishment.”
Of course, there really is no surprise here – it has been said repeatedly here, on p2pnet.net, on Boycott-RIAA.com and other sites that artists always get the short end of the stick when it comes to record label deals. The labels are the ones getting the lion’s share of any revenue.
For example, artists on iTunes only get about 8 cents on the dollars. And all the money collected from the 17,000+ legal attacks by the RIAA on filesharers, where has that mostly gone? To the lawyers, of course. The artists haven’t gotten one cent of that, have they?
Real surprise! The labels were always ripping off artists
No surprise here. I believe this was suggested in the previous thread’s comments by a number of people.
It’s strange to know I could have bought 16.3% of Spotify for a mere 8318 euros. That’s not a great deal at all.
What’s more funny is the fact that the record companies own part of spotify, which means that spotify (record companies) pay.. the record companies.. in order to play their songs.. then give the record companies a cut of the advertising revenue. Oh plus the record companies own part of it so they get money for that as well.
Where can I buy a piece of this action? 980 euros is nothing to me. I want 1.9% of Spotify as well.
Well, do the math. 167$ for a million click, by googles calculations for ppc is about, you owe us double………
I feel a lot of folk just don’t get it……..
Tried M$ 7?
Busted them folk for “stealing” 7 and M$ has been giving it away……
I am about through with this BS……..
And the sad part is, it’s only in my mind…….
^^^^^^^^^^^^^^^^^^^^^^^^^^^
Some artists aren’t even getting when music is being sold or used by the music corporations/iTunes/film industry.
But at least the lawyers and executives are getting paid. That’s all that matters, right .neo.troll/Sometroll/Reasoned Troll?
You know, if the world was to remove itself from parasites and leeches such as scummy lawyers, corrupt politicians, greedy lawyers and the Mafiaa (RIAA & MPAA). I damn guarantee this world would be nirvanna!
You know, if the world was to remove itself from parasites and leeches such as scummy lawyers, corrupt politicians, greedy Bankers and the Mafiaa (RIAA & MPAA). I damn guarantee this world would be nirvanna!
LoL @ #15
I might just die of not suprise.
I say we encourage the
artist to sue the record label and creat their own industry instead of paying someone else to do their own work. People are forgetting it’s a survive not a requirement. Just like police they should serve and protect not demand and bully the public.
And yet another of the cartel’s hunger for money…
“Japan To Tackle Music Piracy On Cell Phones” http://bit.ly/2Wesna
via
http://twitter.com/overnetuser
The telecom and music industry bodies in Japan will reportedly implement a system to automatically check cell phone Web sites for illegal music files, in order to prevent the files from being uploaded or downloaded in breach of copyright law. cont:abo
First of all, anyone subjected to Lady Gaga should be the ones getting paid, not the other way around.
Secondly, I love how everyone on here and other P2P blogs and forums acts like they’d all of a sudden start buying music if the “business model” was different. I say bullshit. No matter what “business model” is in place, as long as people can get something for free, they will.
People always try to say the reason they download music is because they hate the big bad record labels and the RIAA. Again I say bullshit. Just admit it, you like getting things for free.
It’s pretty obvious what’s going on.
The only thing I can offer besides contempt for the labels is advice: stay away from record labels.
You don’t need physical distribution anymore, and you sure as hell don’t want them offering their digital distribution model.
You have the power of the internet.
Do a little research, or, if you are completely inept, find a webmaster or friend to help you get interest in your music. If it’s good, it will take off.
@Fathead 666
Nobody here was claiming that. Maybe you should read a little more. The problem is that the music industry is claiming that big bad pirates steal songs and so the poor poor artists are starving and not making any money, yet here see that in fact the music industry is ripping the artist off. If an artist produced decent songs (ie: not Lady Ga Ga) and gave them away for free with a donate button, they would earn more than what the record company paid out. That’s the issue here. We can all see how that model works, even the music labels can. The music labels don’t like it though, because it renders them obsolete. In response, they ruin the world for everyone.
@Fathead
I already pay £3 per month for VPN access, and £7-8 per month for Usenet access… I would much rather pay it to the artists and go legal – but I don’t have that option. So I will continue to pay the “wrong” people, and to hide my file sharing from prying eyes.
Funny how a basement nerd takes it upon himself to lecture other basement nerds about how a majorly popular artist should market her music and how she should or should not spend the money earned afterwards. For sure, this basement nerd in particular knows what he’s talking about. After all, owning a wordpress blog does give you the right to talk down to everyone, even if that means you’re being a hypocritical douche with a failed life. Just as well, installing a torrent client gives you the right to “advertise other people’s copyrighted works”. If anything, they should be paying you money for your good graces and the very hard work you’re doing on their behalf. Work, if it may be added, they never asked you to do in the first place. Oh well, what a nice little bubble you live in, eh?
I have been around the rock scene for deaceds now.I am 54 years old and started playing in bands in 1972.
http://www.bigmeathammer.com is my site.
1.do not buy riaa corporate music
2.do not buy new mpaa and hollywood movies
3.buy your fave movies used and look locally first used stores.
these labels have ripped off folks for yuears now.i have known bands over the years who got the shaft form the greedbag lables.
Good to see I’m not the only old dog on here gorehound. I will never support The labels again, like you say, if I buy a CD/DVD/BR it will be from a used shop or I will just borrow someone elses and copy it. Screw the labels, screw the movie companies. And like another famous activist said “keep on rocking in a FREE world”. Time to go to the salt mines, later.
Surprise, suprise…the unexpected hits you between the eyes.
@7
or they will go in a Jigsaw trap loll
I like how my comment got filtered.
How ridicules.
“RIAAsoned Mind”
I LOLed HARD! =]
[sarcasm] No kidding, is that true? I thought the labels shared the earnings in a fair manner with the artists! [/sarcasm]
And I still buy stuff when I download and like it. Feels like I`m being made a clown of…
not surprising :) called this one in my comments last time :) good job to TF for keeping their ear on this one :)
Damn music industry, and u wonder why people download from p2p
http://www.likemyscreenshot.com
As Ice Cube said, the record company is the pimp, the artist’s the ho, and the audience is the trick.
Hmmm, I did not understand this at all. The money is paid to Lady Gaga through Stim – the collection society for songwriters.
This has nothing to do with the labels. Lady Gaga would have got just as much – or as little – if she was unsigned, or signed to a smaller company.
Spotify also has to pay the labels for use of their music.
The problem with Spotify is that so many people choose the free version rather than buying the premium one.
You have to fact check your articles, Torrentfreak.
Lady Gaga are pwned, they are being exploited like the good little commercial so called artists they are…
They signed up for this so they deserve the $167 or less :0)
the music industry rips off its artists. There is an infamous/famous blog entry written by a music insider, that details how the industry works. Even the hugely popular artists make only 5% (!!) on each track they sell. Because the music industry has layers & layers of unnecessary middle management. Talk about a Ponzi scheme!!
so artist need to flip the card on labels & sign short contracts, as soon as they make it big, move to independent labels.
does this really surprise anyone ? label are making money over artist that’s what they do!
the time when they decide who is popular and not is dead
I would like to know just exactly what do the labels/promoters spend to get someone like Lady Gaga to #1? I think if she was “inde” we wouldn’t be having this conversation.
If you live in sweden, you would’ve already knew this! People in Pirate Party Sweden has some kind of sniffing technique to find wonderful things like interesting news ^^ So guys, if you want these news EARLIER, learn Swedish :)
I am glad that talentless douchebag puppet Lady Gaga is getting ripped off.
How much would Lady Gaga receive from one play on a major national radio station reaching around 1mil listeners? About the same.
Keep in mind thought that there’s one Spotify and there’s multiple “national” radio stations plus there’s usually more than a million listeners, so she’d earn substantially more.
Correction, the labels are ripping us off too.
Kinda funny how Lily changed her tune 180° since she got chewed up and spit out for her idiot comments a few months back.
Either she wised up and learned how the major labels are the ones taking her in the ass, or she changed her tune simply to keep the favor of her fans.
Lets hope its the first and we have another high profiler to fight against the music industries crusade against the future.
6 references to this post
Responses are closed
All remaining responses will continue to be archived. Use the TorrentFreak forums if you want to discuss something.