Tuesday, 20 November 2012

Spotify ~ Hero or Villain?

There have been a lot of blogs, articles and the like flying around recently about streaming services such as Spotify and whether they are dangerous to musicians due to their low royalty payouts. I read a lot of arguments from both sides of the fence, and thought I would share my views with you guys. Leave a comment with your thoughts at the bottom of this post, I'd love to hear what you think about the whole thing.

As an independent musician, I don't think Spotify is ever going to make me any money. That doesn't mean, however, that I think it is a bad model. The idea of the royalty payouts by Spotify is that you get paid a tiny amount of money every time one person listens to one of your songs. For me as an independent musician without ties to a record label who has a deal in place to collect 100% of my royalties, I get about a third of a penny per track play, so if someone listens to 'The List' from start to finish (12 tracks), I'd make about one and a third pence!

It sounds like nothing, but I'll put it another way. Imagine how many times around the world in different people's personal stereos, car radios and MP3 players 'Dark Side of the Moon' has been played. Millions? Hundreds of millions? More? Now imagine if all of those plays had been on Spotify, which in the future will be possible as they branch their service out to mobile devices so you can take it with you wherever you go. You are looking at millions and millions of plays, each being paid a third of a penny or more as the music is so popular. At a third of a penny per play you would need just 334 million plays of individual songs to make a million pounds. For 'Dark Side of the Moon' as a whole, it would be under 33.5 million plays. Considering sales of that album are estimated at 50 million worldwide and not many people listen to an album just once, you can see how it mounts up. And it would be growing all the time.

So Spotify is just another service that's good for the guys at the top and rubbish for the guys at the bottom?

Well, sort of. I use Spotify's player to play the music on my Facebook page and on this blog. I don't think of it as a way to make money, but rather a way to advertise my music to anyone and everyone that wants to hear it, for free, through a trusted medium. And if they like it, they might just go and buy it. Or at least it might get them interested in my music enough to come and watch me play.

So that's my view on Spotify. If you write a great song or album that people keep going back to, it will pay you in the long run. However, if someone decided to listen to my album 'The List' solely on Spotify rather than buying it, they would have to listen to the whole thing over 385 times before I got the £5 for the CD!

That is why I don't use it for financial gain, but rather treat it as an advertising expense. What do you think? Leave a comment and let me know :)


  1. Interesting thoughts there Sam. I haven't really looked into Spotify, though if I re-launch myself I would consider it. Quite frankly, as an acoustic musician I've been paid for shows a grand total of twice in 5 years, so an opportunity to make money, however small, is not something I need to sneeze at right now. Especially since I'm really bad at burning CDs and that, and selling them, so it's not like I'm going to get a great many people listening to my CD!

    One thing you don't mention though is whether you need a monthy subscription fee or equivalent to put your songs on Spotify. If I need to pay money in order to do this, chances are I'm going to be paying a lot more money than I'm ever going to get back off royalty payments...

    Regardless, as I have both your albums ripped onto my laptop, it's unlikey that I'll be listening to your songs on Spotify. But then, since I paid for both CDs, you're still getting the money out of it!

  2. Hi Matt,

    I pay £30 a year to release an album online, that includes Spotify, iTunes, Amazon and the like. Admittedly, I don't make it back through Spotify, but combining the small revenue from that with the larger revenue from iTunes and Amazon sales means it usually pays for itself. There are other deals out there with smaller initial payouts (CDBaby do one, as do Ditto Music), but they take a % of royalties earned as well, whereas that aggregator I use, Zimbalam, do not. I guess it's best to shop around and find who is going to offer you the best deal for exactly what you want :) I'd be happy to help you through it if you do decide to make a comeback :)

    Again with iTunes, I don't see a huge return on my initial investment of £30 a year, but the sales I do get cover my costs, and anything I make after that is a bonus. I also like to have my music on iTunes and Amazon as, like Spotify, they are trusted brands and as such act as decent advertising for me just to be involved with them.