Streaming music - how do the numbers add up?

[andrewducker]

I bumped into a discussion of how much streaming music pays, and thought I'd take a look at the numbers, to try and understand better where the issue is.

Spotify is £11/month. 70% of that goes to the labels, which is £7.70.

If you listen to about 4 hours of music per day* then that's about 60 songs/day, that's about 1800 streams/month. Which would work out to £0.0042 (or 0.42p) per stream**. Which is what they pay.

So if you want to pay more per stream to artists then you need to be paying more to Spotify each month. I did spend more than £11/month on music for most of my 20s. But I'd dropped down to about 2 albums/year by the time Spotify appeared, so I actually started spendig a lot more on music when it came along than I had before.

And, of course, £11/month isn't what it was when Spotify first appeared, the monthly streaming cost has gone up by £1 over the last 15 years. If it had matched inflation then it would be £15/month (or about 0.6p/stream to the artists).


*Clearly chosen to make the figures work. But doesn't seem unreasonable - I probably only listen to a couple of hours a day at the moment, but have listened to up to 12 hours a day at other times in my life, between having it on in the background at home and having headphones on all day.

**If you're wondering, the split of that 0.4p that goes to the artist, rather than the label is....about 15% on a major label. 50% on an indie label, but you obviously get a lot less marketing there, and no advance.

Comments

[danieldwilliam]

Recognising that my brain is currently mince but I make that 100m streams per year needed for an income of £50k each for a 4 person band. More than a quarter of a million streams per day.

Or, if you were performing, something like £10 a ticket, 25% to the performers, so £2.50 per ticket to the band. Requires 20,000 tickets sold a year. At, say 200 per concert, is 100 nights of performing a year to make £50k each a year.

[andrewducker]

Yes, the number of musicians who make a living from streaming is apparently around 0.4% https://mixmag.net/read/artists-streaming-income-livelihood-news - live music (and merch) has always been a better money maker.

Similarly with writers, of course: https://publishingperspectives.com/2014/01/how-much-do-writers-earn-less-than-you-think/ (Although they don't tend to make any money at all live or from merchandising).

[danieldwilliam]

What do you suppose happens to the money for streams of recordings that are out of copyright?

[andrewducker]

An excellent question. I am curious now myself.

I took a quick look at some albums here: https://routenote.com/blog/music-now-in-the-public-domain-from-1st-january-2022/ and couldn't find any of the albums on Spotify.

[channelpenguin]

All of this minus what you spend on travel, equipment, marketing, costumes, recording, rehearsal space, insurance etc. So add the time to do all that to your working year... Then pay tax, health insurance, doubt if yer average muso bothers with a pension...

[danieldwilliam]

I suspect the pension plan of your average muso is to hope that something turns up or else to live fast and die young. Which is not the most prudent of financial plans.

I've no idea what the actual split of ticket sales between venue and and might be almost all of the professional musicians I know are also working other music related jobs on top of performing which makes me think that I'm not a million miles, or a million quid, off.

[ninetydegrees]

And, if I remember well, Spotify is one of the companies which pay artists the lowest amount (not that the other ones do much better...).

[andrewducker]

Which means the others either make more money to spread around or they're taking a smaller cut because their infrastructure is cheaper to run.

[ninetydegrees]

nods

[danieldwilliam]

How big is the market for music streaming? I mean how many streaming services could the market use?

[andrewducker]

Amazon and Apple and Google will always do their own thing, so that they can bundle it in with other services. And Spotify are the major one who don't belong to one of the tech companies.

Checking market share, the only surprising one to me is Pandora, who I had no idea were still around.
https://www.visualcapitalist.com/top-online-music-services-us/

[channelpenguin]

And ALL of them pay much worse than radio.

[andrewducker]

According to https://www.prescriptionmusicpruk.com/the-prescription/2016/7/22/how-to-make-sure-you-receive-the-radio-royalties-youre-owed Radio 1 pay about £15/minute. So, £45 for a 3 minute song.

Which is the equivalent of 3,571 streams. For an audience of millions.

Doesn't sound like they pay more than streaming.

[channelpenguin]

But if there was not Radio 1, you would not GET those millions as individual streamers. It's not convertible that way.

[andrewducker]

Okay. You were the one that said "And ALL of them pay much worse than radio." I pointed out that, on a per-listener basis that this is very much the opposite of true.

If you meant something else by it, then please show your maths, or otherwise explain what you mean by "pay much worse than radio".

[channelpenguin]

I guess annual income-wise, but I would have to find (again or anew) links to 'prove' that. Maybe I'm 'wrong'. I don't think that's my point, so let's leave it.

The vast majority of musicians throughout history have ALWAYS needed pupils, patrons or day jobs. That, I think, is undisputed and speaks for itself.

I refuse to deal with Spotify, and anything I read about the opinions and wishes of its top management only hardens that attitude.

As was said, nearly nobody makes a living from streaming. That's not in doubt. It might not be as common knowledge as I think it ought to be, but that's a detail I guess.

[andrewducker]

I agree that nearly nobody makes a living from streaming. But I think that nearly nobody made a living from CDs either. Touring and other merchandise was always where money came from for the vast majority of musicians.

[channelpenguin]

This is far from perfect, but the best breakdown I can find (long)

https://twostorymelody.com/how-do-musicians-make-money/

The 'most lucrative' part is the most interesting.

I think we broadly agree.

[andrewducker]

Thank you for that, it was fascinating!

[ninetydegrees]

Good point!