The case against Spotify(thedailyt.com)
thedailyt.com
The case against Spotify
http://thedailyt.com/2009/08/the-case-against-spotify/
10 comments
I know almost nothing about the music business, but I have always heard that artists make more money touring than by selling albums. If that were the case, I would think that artists would jump at the chance to be played widely in hopes that it would drive consumers to buy tickets for their tours.
It seems like two of the arguments (no ownership of the music, no direct compensation for artists) could be made for radio in the earlier portion of the 20th century, yet that vehicle was apparently successful for both the radio stations and the artists.
It seems like two of the arguments (no ownership of the music, no direct compensation for artists) could be made for radio in the earlier portion of the 20th century, yet that vehicle was apparently successful for both the radio stations and the artists.
I'm not an expert or industry insider so take the following lightly.
The reason why they make more money on tour is because of how the current music industry contracts are set up. The music industry take a massive cut of record sales leaving the artist with very little. Also, when recording an album, an artist gets an advance from their label to pay for the studio, the sound engineers, etc. This advance is paid back through their royalties before they ever see a cheque from the label. As you can imagine the cost of a professional cd recording is quite high. The combination of a small cut + reimbursement makes it so that most bands never see a cent from cd sales and make it up with touring and merchandise sales.
This however is changing and not in a good way. Increasingly, labels are forcing artists into what's commonly reffered to as a "360 deal" which gives a cut of everything to the label. CD sales, touring, merchandise, etc, the label gets a cut of it all.
The reason why they make more money on tour is because of how the current music industry contracts are set up. The music industry take a massive cut of record sales leaving the artist with very little. Also, when recording an album, an artist gets an advance from their label to pay for the studio, the sound engineers, etc. This advance is paid back through their royalties before they ever see a cheque from the label. As you can imagine the cost of a professional cd recording is quite high. The combination of a small cut + reimbursement makes it so that most bands never see a cent from cd sales and make it up with touring and merchandise sales.
This however is changing and not in a good way. Increasingly, labels are forcing artists into what's commonly reffered to as a "360 deal" which gives a cut of everything to the label. CD sales, touring, merchandise, etc, the label gets a cut of it all.
If it's true that touring is more profitable then I'd really like to see data for this, and a comparison between famous and little-known acts. This could add a lot of weight to arguments in favour of laxer copyright laws.
Honestly, it depends on how many albums the artist actually sells VS how large of a draw you are(there is a correlation between both).
Say for example an artist makes 1.35/album and sells 2 million(which is not too bad) and then does 100 shows (which certainly is not out of the realm of possibility)commands 40k fee + merch sales at the venue.
1.35/album * 2,000,000 = 2.7 million 100 shows * 40k = 4 Million + merch sales - costs
So it really depends, the more albums you sell the more money you make from albums. The less albums you sell but the more you tour, so for a middle tier artist who generally doesn't sell an obscene amount of albums but does a lot of gigs, they would certainly make more touring.
Someone like U2, probably makes more from album sales.
Say for example an artist makes 1.35/album and sells 2 million(which is not too bad) and then does 100 shows (which certainly is not out of the realm of possibility)commands 40k fee + merch sales at the venue.
1.35/album * 2,000,000 = 2.7 million 100 shows * 40k = 4 Million + merch sales - costs
So it really depends, the more albums you sell the more money you make from albums. The less albums you sell but the more you tour, so for a middle tier artist who generally doesn't sell an obscene amount of albums but does a lot of gigs, they would certainly make more touring.
Someone like U2, probably makes more from album sales.
"1.35/album * 2,000,000 = 2.7 million"
It should be noted that especially new artists often start getting royalties after the costs of making the record and music videos have been paid. I believe that is a big reason why many one-hit wonders might sell millions world wide and go broke soon after the success fades.
yes, that's very true too. So after costs, it might be a break even proposition(or not as much as it might seem anyway) on an album.
Should we be afraid that if we get used to Spotify and its business model, then then they will take away music on CDs. And our senses will be dulled so that we don't notice what they've done until it is gone?
Our should we just pay homage to the fact that grandpa used to have his music on plastic pieces and could play it even after country music was made illegal by UN?
Our should we just pay homage to the fact that grandpa used to have his music on plastic pieces and could play it even after country music was made illegal by UN?
He makes logical points, but I think that his point that Spotify can't be or do everything we expect from a music player (like play in the car, he says), will make his main concern moot. He says we're giving too much control to Spotify because they can cut off the music supply at any time and they decide what's on the service. That's why spotify will never "take over" the market completely... it can't fulfill all the market needs, just some of them. People will use it, and they'll use other services/products in parallel to fill the need.
I have to say that I love Spotify to bits and can't wait for the offline client to hit the S60, but I do agree that giving control to any one central company is a bad idea, and being in a situation where albums just vanish one day is not good, so I see the poster's problem...
I think this is the future.. why worry about maintaining your catalogs and syncing between computers. Let it be online. As for the whole "but i like owning my stuff" argument, I mentioned that in my post. And as for the offline client issue, yeah they're working on it.. I still burn CDs for my car so I'll be interested in how this works out. But I figure in 10-15 years every ipod or other such device you listen to music on, even your car, will be online.. I never want to have to deal with ensuring all my songs have proper and accurate ID3 tag info. If I have to see Track 1, Track 2.. again I'm gonna go apeshit.