Is Music Streaming Worth it for Musicians?
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- Опубликовано: 2 окт 2024
- Music streaming services like Spotify and Apple Music are amazing for listeners. But, are they worthwhile for artists? Justin Colletti dives into the numbers and recommends better ways to use them in your career.
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In the CD model, you never even mentioned manufacturing. Pressing 10K disks, depending on packaging, is going to run you between $20,000 and $30,000. It's also easier to sell physical copies by playing live, but it's easier to get streams through on line networking. So to sell those CDS, even without a distribution company taking a chunk, you'll be touring at least regionally. Touring certainly can be profitable, even small clubs and it's absolutely fun, but it's a huge up front investment. Even a willingness to sleep in the van, or couch surf, and eat 3AM 2 for a dollar tacos, can run you over a thousand dollars a week. Gas, strings, sticks, heads, picks, replacing the missing guitar cable for the 3rd time. 10,000 units is a lot of tour dates and thousands of dollars invested, which you hope to offset with some guarantees, door money, but primarily sales from your table. The more units you aim to sell this way, the lower your profit per unit will be. Not to mention the time cost. 10 hours in a van between cities is 10 hours not spent doing other things to grow your music, or spending time with your family. The key is balance between streams, physical sales, on line promotion and discovery and getting out and playing for your fans face to face.
They could add a special button like: "extra-gift for this artist" with which you could give a ont-time dollar or several dolars to the artist you're currently listening to if you like it a lot 😁
"We tried sticking it to the man, but it turns out The Man was doing just fine." applies almost any time someone tries to stick it to The Man. Few people are knowledgeable enough to be able to purposefully behave in a way that actually sticks it to The Man.
As a side note, as a business nerd I appreciate the podcast episodes that focus on the business of music. It's always great advice that aligns with my experience as well. I know that type of stuff doesn't come natural to a lot of creative folks, so it gives me hope that they'll hear the episode, get real insights, and improve their life.
Music listening seems to be different than things like movie watching in that quite a few people still listen to music released up to 60+ years ago on a regular basis. That means there is more and more competition for listener's ears every year because the new music keeps being released and the old stuff is still loved. Not many people are watching movies from the 60's and 70's on a regular basis, but people of all ages listen to a lot of Led Zeppelin, Beatles, Rolling Stones, Who, Kinks, Pink Floyd etc. on a regular basis. It's kind of cool to look at the comments on some old song on youtube where a twenty year old discovers a 30+ year old album like Spirit of Eden by Talk Talk for the first time and becomes a new fan. Music discovery happens for bands of all eras.
That’s very true about music! Probably moreso than most other art forms-perhaps excluding written fiction.
But I guess you’re asking the wrong guy, because if I’m going to watch a movie, the chances of it being made between 1940 and 2000 are very high!
Then again, maybe I’m weird. (I don’t watch that many movies anymore either.)
But I think there are a LOT of classics, from It’s A Wonderful Life to Terminator 2 and everything in between that still get watched decades later. TV shows as well, whether Star Trek or Seinfeld or whatever.
That said, you’re probably right that this is much, much more significant in music than in movies and TV, though I don’t know the exact stats off the top of my head.
There are reasons for this, not all economic, that could be a good topic for another episode someday.
Thanks for the comment,
Justin
Sound advices, thank you.
I feel like this is as much calling out streaming services as it is about advice to utilize them to the fullest in their current state. Nicely done. Very fair, too. I had no idea about the situation Spotify has been in.
Heyyy men thats videos are crazy , when the video of a mixing masterclass ??? You could bring the nba youngboy engenier to thes channel , with the song green dot
This was very useful information!! Thank you for making this video :)
This was huge. Very enlightening, thanks for putting this together.
They are not worth it to me. I make nothing and my music goes basically unheard…
I recently told a musician friend of mine (regarding streaming) "I don't bother, I can have my music go unnoticed for free."
I whole heartedly agree with you
@@Ninjametal I just use them as a storage device for my songs 😂
@@officialWWM like cloud storage! I like that angle haha
@@Ninjametal yes but it’s cheaper 😂
Amazing video! As always. Thanks for your help.
Comprehensive discussion, insightful and great recommendation regarding “unlocking” strategy
Music streaming should have done what video streaming services like Paramount+ or Peacock are doing. $4.99/mo with commercials, $9.99/mo for commercial free, otherwise you the alternatives like Disney+ and Netflix are pay only. Having a free tier devalues the artist.
30$ a month is too much but people still pay 100-250$ for a dish or cable package and watch 3 shows, and then stream everything else. the only reason they wont pay more for music is because we havent paid for music since napster.
i think spotify should be a paid service with ads, much like hulu, or a cap on song plays and then ads after the cap for 10$ and then pay 30$ for unlimited or something like that.
if anyone is tired of the same cookie cutter songs and artists shoved down their throats by record companies then i think thats the way to go.
Extremely informative and insightful. Although I gotta disagree with the paywalled music take, paywalled music is what motivated piracy.
I get between 5-10k a year from streaming (9/10 Spotify), and that is about 1/4 of my current annual revenue (not all from music). I do consider supplemental revenue streams to make more from music, but only as far as I'd enjoy it, and I don't enjoy producing for others nor teach. Lots of great ideas in the vid. I believe capping the free subscription on Spotify, would create more incentive for paid subscription. Limiting paid subscription would be a dealbreaker for many, but providing access to special tracks, a super-fan option or HD resolution might fare well. Spotify is actually very artist friendly imho, giving easy access to upload your own artwork, write your bios, create marketing materials, sell merc, advertise shows ect. I'm quite happy with them, and understand the revenue part, 30% is not greed at all. I don't think higher subscriptions is the way to go either. Great channel!
What’s funny is that comic books are actually pretty comperable to music, and comics do just fine. Even Webtoon creators make way more than musicians on Spotify/apple.
Not sure about the whole "Spotify are skint" idea... the CEO is a billionaire.... because millions of people pay 10 dollars/euros/pounds etc monthly while the artist gets jack shit.
I had to look up “skint”! :-)
I understand where you’re coming from.
Don’t get me wrong! It’s not that there’s no money floating around Spotify. It’s that their business already keeps losing money with its 30% gross margin.
This is actually a very low gross margin relative to most types of businesses, before expenses.
So, if the goal is to get pay per stream for artists to go up, then reducing that already low 30% gross margin is almost certainly not the way to do it.
As a counter example, Apple Music has a 50%+ gross margin (meaning they keep MORE of the money that comes in) yet, they are able to pay out substantially more per stream to artists than Spotify does-even though Spotify keeps a smaller share of revenue for itself.
As for the CEO, yeah he’s rich on paper...
...but you have to remember that a huge portion of his “wealth” is the assumed market value of his company....
...A company which is not profitable, never has been profitable, and may never be profitable...
...so a lot of that “net worth” of his is purely theoretical “paper wealth” and will likely never materialize.
That said, yes, I’m sure he lives pretty nicely! So no violin playing for him here.
First, he’s able to live on debt he can take out against the theoretical pie-in-the-sky value of his company.
And secondly, money-losing companies effectively transfer wealth from their investors not only to their customers, but also to their employees-particularly C-suite employees like CEOs.
In addition to being an owner in his money-losing company, Daniel Ek collects up to $1 million a year in performance-based income, tied to increases in Spotify’s subscriber base.
(That sounds like a lot, though to put it in perspective, it’s effectively 0.03% of their gross revenue.)
Don’t get me wrong, I think it’s too much! In my opinion, bonuses should be tied to profit, not revenue, so if I was an investor, I’d argue that his bonuses should be $0.
(Then again, I’d never invest in a company that has been around for 15+ years and has only ever lost money, able to stay afloat only because new investors are willing to throw good money after bad to keep the house of cards aloft. But maybe I’m weird.)
I’d also argue that his real net worth is a tiny fraction of what it’s stated as, because any rational valuation of his company should place it at a fraction of its current market capitalization, as they are a perpetually money-losing company, fueled by debt, artificially low interest rates, and investor naivety.
But all that is a bit beyond the scope of a music production podcast I think!
TLDR: I’d like to see Spotify pay significantly more per stream to artists, but that’s not going to happen by reducing its already fairly small gross margin.
I describe the more likely paths to higher artist payouts in the episode.
Hope some of that makes sense!
Best wishes,
Justin
@@SonicScoop What a great answer Justin! I wish streaming had never been invented, was far happier with cds 😂
Such a good balanced perspective on streaming. Thanks Justin. I love the idea of unlocking albums or special content for a fee but still offering singles and popular tracks unlimited. I think it also would increase the perceived value of music rather than have it be this unlimited resource that feels throwaway. It also gives fans the chance to buy into an artist as a fan-perhaps you have give unlock codes to fans who buy physical merch so your honoring those who have already bought in.
Wow...This was a great video. Very balanced analysis that shed some good light on these services. Thanks!
I don't make a ton of money from streaming (lol...I don't think I even break even) but being that I am a hobby musician, it's not really a big deal-it's mostly about getting the music 'out there'.
As always, great podcast: insightful, informative, and balanced. Thank you!
I'm one of the artists that use my music as a loss leader. On any given year, about 2-5% of my income is from streaming services while the vast majority of my income is from licensing to TV, film, and ad campaigns. Spotify is a great way to get my music into more ears!
Thanks Justin, this was very interesting and well detailed. this streaming premium option is so obvious that it is sure in streaming platforms strategy for the years to come. Thanks for the excellent video.
please make timestamps
Ngl it’s forever wild to me that musicians ever engaged with streaming. iTunes had figured out an equitable approach. Streaming is borderline idiocy unless you want to be constantly touring across the globe.
It's not legal, voluntary streaming that took away revenues from recorded music.
It's illegal piracy that pays musicians $0 that did that many, many years before.
With the advent of Napster around 2000, music industry revenues fall off a cliff.
Finally, the streaming services have brought some revenue back to recorded music, starting about a decade ago. But there's still a long way to go.
Unfortunately, although the iTunes model COULD have been great, it did almost nothing to plug the losses from rampant music piracy.
Streaming services now pay out the same proportion that iTunes did/does. They're just not taking enough revenue in.
I hope that helps make sense of it!
-Justin
@@SonicScoop What do you mean? Musicians were making bank with iTunes. But then they went chasing Spotify musicians and now it’s $2,000 for a Taylor Swift ticket. 🤣😂 Because she can’t make money on album sales anymore.
For me, the unknown bedroom producer, it's nice to have a showcase for my songs just incase. Btw - this channel is the best of it's type that I've found with valuable insight and advice. 😀
Awesome to hear! So glad it's been useful to you.
-Justin
How about this for an alternative, instead of having unlimited access to new music, the subscriber is allow a set number of streams to new music and then if you like that particular song, you then purchase an package of streams of said song (i.e. 25 streams for a set price, 50 streams for a set price, etc.,ect.) that way the artist can be fairly compensated as well as the Streaming services. Great job on this topic Justin. I am a big fan and I have purchased some of your training courses.
In the end, Napster won. Music is now free for the listener and the artist or songwriter gets the shaft. We need to be able to monetize music again. Having to actually pay for music product or even downloads is sooooooo much better, IMO. But streaming is here to stay so we gotta deal with it. Napster won and victories have consequences.
based on how it's described here, i'm not sure how much i'm a fan of capping the number of plays one has. "unlocking" certain albums, could make more sense for some people, but i see it as in something like: every month you can add 10/20 albums to your library. those you can stream while your subscription is active. next month you can add additional albums, so then you'd have 20/40 albums in the library. or maybe make it based on the number of songs, since most new artist release only singles?
i think these are the ones that would be hurt the most, because, specially when looking at the kids with student discount, sure they have their bangers on repeat, but mostly, they listen to playlists with what to them is new music of the same style. if capping # of plays, people will probably discover less new music, etc.
or they go listen to hour long mixes on youtube, practically the same for them, without the added benefits of adding and liking individual songs to our own library, to listen later.
and even with the "unlocking" certain albums (or singles), the main issue i see is new users. "for 10$ you have access to all songs" sounds a lot better than "within a year, you'll have added 100+ songs to your library"
my 2 cents are that it's just best to add a "tipping" option on spotify, AM, etc. and keep things as they are. i don't look at this like a lost battle, but i think fact is that people that want to go "the extra mile" to support an artist (and it really is going out of one's way, given the convenience streaming gives) will do so.
to me this means: have your music for sale on bandcamp, in addition to DSPs. lot of people there pay more than what is asked for. once the numbers are there, sell vinyl as well, as well as some merch maybe? instead of merch, sell presets or samples if if you're a computer based producer? the main point is imo: make it easy for fans to support, not more difficult for most people that could just as easily listen to the radio, instead of a mainstream playlist.
spotify/AM could add a tipping option, and even send notifications to users, as in "hey, you clearly listened to artist A way more than B, C & D. if you want you can support him directly" - i honestly think lot's of people, specially the ones really proud in their eclectic taste really would just send a few more $ someone's way
edit: and btw, in no way do i feel that the amounts being payed are right. i'm just looking at this from the perspective of what one individual can do right now to make it through
You can make money from music?! Who knew
i think the point your missing is that in back in the day most artists or bands made their money on stage and selling merch.
It depends on what you mean by “back in the day”.
Several decades ago, concerts were often performed as a “loss leader” for the higher margin product of record sales. (And yes, other merch as well.)
In the past couple decades however, it’s the other way around: recorded music is often the loss leader for the higher margin product of live performances.
We have a recent episode about streams of revenue for artists here if that’s useful:
ruclips.net/video/waeNPPKNvwQ/видео.html
Hope that’s helpful!
@@SonicScoop ok thanks for clarifying. i thought that has been the case since the beginning.
Streaming is going to HAVE to go on blockchain - it will solve many of the endemic problems and corruptions in our present digital distribution services.
As a minimalist, streaming services are 👌
where I can look how to put my stuff on Spotify etc? I know Distrokid is good, but fr? is that about 20 usd per year?
is that easy to do? any1? appreciate any link or some, topic is super mess on net. also copyrights....
also any fire video on copyrights? I also got 1 question about it, thx for anything
Distrokid is great, sure! Tunecore and CD Baby are the other top choices there. What are you looking to learn about copyrights?
Here's a 7% discount link we have for Distrokid if that's useful: distrokid.com/vip/seven/1822931
Best wishes,
Justin
@@SonicScoop I would like to ask about specific situation, cuz I'm not sure I did something wrong or not. is any chance to send you message or just ask right here? thx for any replay, time.
39.99 per year for the mid tier package
No