Spotify –The answer to illegal music downloads?

Posted on 6th August 2015.

Since the late 90’s- artists, musicians and industry executives alike have struggled to comeback from the crisis that was the illegal file sharing service, Napster. How does one reconcile a desire for as many people to hear your music as possible with a need for profitability in a market that no longer needs to purchase your music to fall in love with it?

A viable alternative reached our shores on May 12 2012. Spotify became Australia’s first free streaming music provider (ironically Shawn Parker, founder of Napster, is on the board). Spotify is a digital music streaming service that gives you on-demand access to the ever increasing and ever diverse landscape of music. By integrating with Facebook, Spotify has created a social listening experience. You can browse your friends’ playlists, secretly judge their music taste, catch them indulging in some Taylor Swift tunes or simply discover more music that you would never have heard before.

Although research has shown that illegal downloading has decreased in recent years in the US this does not necessarily benefit the artists themselves.

How do I get paid from Spotify?

Spotify generates income from advertising on the free service and from paying premium customers. Although they insist that approximately 70% of all revenue to the rights holders this doesn’t seem to amount to much. Nick O’Byrne – General Manager of the Australian Independent Record Labels Association said this in a recent article for ABC.

“They might be being cagey about it but in the end we do know that it’s less than a third of a cent and probably sometimes – depending on which labels you are and which artist and what deal you have done with them – it may be less than one tenth of a cent. If you do the maths on it, if you see a single song on iTunes you might get paid about a dollar by the times iTunes has taken their cut and that goes to the label and then divided amongst the artist and the label themselves. So if you are getting paid about a third of a cent per stream you would have to listen to the same song about 300 times before it would make the same amount of money.”

As a result many big names such as Adele, Radiohead and The Beatles, have made a stand and rejected the service on the grounds that it isn’t fair for the artist. However many up and coming artists have accepted the service. Although it may not be ideal Spotify presents an opportunity to make their work accessible in today’s market. Perhaps we are yet to find an answer that provides a happy medium for both consumer and artist.

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