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Commentary: Online music streaming, Spotify not worth benefit for musicians

Courtesy of MCT

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Spotify, the ever-popular online music streaming service, seems to be representative of a trend in consuming music. Streaming programs such as Spotify provide extraordinary access to millions of songs, but there is dispute as to whether these programs pay artists fairly. 

As an artist, is it worthwhile, in terms of making money, to place your album on Spotify for streaming? I’m beginning to believe it’s not. 

It is not so much that artists aren’t making any money from streaming services – they are surely raking something in – rather, it is largely a matter of comparison. Artists make more on album purchases and downloads than on streaming plays. This is also mostly in regards to lesser-known, “indie” artists, but not exclusively.

Jana Hunter, member of Baltimore-based band Lower Dens, discussed this matter on the band’s website, in a post titled “On Spotify and Music Consumption.” In the post, Hunter broke down the band’s average income in music sales and streaming royalties for 5,000 of its albums.

On Spotify’s free, ad-funded streaming service, Lower Dens makes about $900 when its album receives 20 plays from 5,000 people, compared to $2,500 on the paid Spotify subscription with the same amount of plays and listeners. Lower Dens makes $5,000 on average from digital purchases, making $1 per album, and about $15,000 from physical purchases, making about $3 per album. 

Hunter noted that there were five musicians involved in making the album, plus a band manager to which Lower Dens has to cut a check. Hunter also noted that the band “might sell 10,000 records a year.” 

Lower Dens is not alone. Damon Krukowski, member of alternative rock trio Galaxie 500, cited similar statistics in a feature article on music blog “Pitchfork.” 

In the first quarter of 2012, Galaxie 500’s song “Tugboat” received 7,800 plays on online radio service Pandora and 5,960 plays on Spotify. Pandora paid the band “a collective total of 21 cents, or seven cents each.” Spotify “pays better,” as the band received $1.05, or 35 cents for each member. 

Krukowski went on to describe the sales of the physical “Tugboat” 7″ single. The single cost the band $980.22 to produce and ship 1,000 copies, or 98 cents each. Krukowski mentioned that “it was easy to turn at least a couple bucks’ profit on each. Which means we earned more from every one of those 7s we sold than from the song’s recent 13,760 plays on Pandora and Spotify.”

Lower Dens and Galaxie 500 are just a couple of the bands that have come out against streaming services, and, admittedly, they are not the most high-profile. There are several mainstream artists that have rejected the service access to their releases. 

According to Spinner.com, when the service was still fairly new (Spotify came to light in the U.S. in July 2011), musicians including Coldplay, Tom Waits and Adele were quick to deny the service access to its new releases. Perhaps the most outspoken was the Black Keys. 

In 2011, the Black Keys did not place its most recent album, “El Camino,” on the service. Black Keys drummer Patrick Carney told VH1 that streaming services are not “at a point where you’re able to replace royalties from record sales with royalties from streams.” 

Spotify and other streaming services supply a certain outlet for consumers. These services provide a chance for underground or otherwise unknown artists to be discovered, and in that respect it is a revolutionary technology that will hopefully give bands a chance. Unfortunately, streaming services are becoming the sole source of music for many listeners, which in turn appears to rip off the artist. 

Hunter states the following in her post criticizing Spotify, which I feel encompasses the entire conflict of streaming music versus downloading or purchasing physical copies:  

“You may have standards, but more and more of us accept that cheap/free is the way things are with music now, and they don’t go out and buy the albums they like, and musicians get screwed and music consumers develop a cheap relationship to music and thus get screwed, too.” 

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