[jaysonelliot]

While the major labels are setting restrictive terms on Spotify, Spotify itself is turning around and treating independent labels like chumps: http://www.projekt.com/newsarticles/projekt-spotify.asp

From the article: "For a stream on Spotfy, on average $0.0013 is paid to Projekt's Digital Distributor." That means an artist would have to get one million airplays to make $1300.

I'm finding it hard to sympathize with Spotify if that's the terms they set when they have the position of power.

[mikeknoop]

As the article points out (and assuming it applies to Spotify):

7. Most favored nation. This is a deal term demanded by every major label that ensures the best terms provided to another label are available to it as well

... means that Spotify cannot offer small labels better deals else it would put them out of business because they would have to match the deal for every label.

[wmf]

That would only apply if Spotify is already paying indies the same as majors, but it sounds like they're paying much less.

[chrisclark1729]

For what it's worth, the majors are also making fractional pennies. The gap is not as large as the fractional penny amount would make you think.

[gwern]

Do they have a choice? I can sympathize with them fine if the choice is between 'screw over indies' and 'go bankrupt'.

[Kolya]

$0.0013 doesn't sound a lot. But it's equivalent to about $1.50 if somebody listens to an album 100 times.

That's less than if they were to sell the album in a shop. However they don't have the same distribution costs and Spotify users are almost always going to listen to far more music than they would if they bought CDs.

So while $0.0013 per stream sounds stupid, it's closer to a sensible level than one would intuitively think.