[worldvoyageur]

Forget the labels, Spotify is dead. The corpse just hasn't hit the ground yet:

"I am paid $0.00029 per stream of a song on Spotify, and even this amount depends on whether the song is being streamed by a paid user or someone using the service for free. This means it will take upwards of 3,500 streams of a single song on Spotify to earn $1.00 versus that same revenue for one iTunes song purchase...I’ll go even further to say that I actually prefer illegal downloading over Spotify because when you get music illegally it’s at least implicit in the transaction that what you’re doing is potentially harmful to the artist. But with Spotify, your conscience is clear because you’re either enduring ads or paying to use the service and access the music. But from the blue-collar artist’s perspective...there’s little discernible difference between $0.00029 and $0.00...which is why I will withhold any new releases from Spotify in the future."

http://derekwebb.tumblr.com/post/13503899950/giving-it-away-...

Read the whole blog, it jam packed with more than enough insight to make it worth multiple readings.

Even absent the labels, Spotify is a lousy deal for individual music makers.

The search for a viable, sustainable online business model for music is still underway, but unlimited streaming for a low monthly fee is not it.

[mseebach]

> Forget the labels, Spotify is dead.

Let me guess, Netcraft confirms it? I'll believe it when I see it.

Spotify (and similar services) is transforming the way we can listen to music, and, at least for me, I vastly prefer the Spotify experience over anything else I've tried. Also, with Spotify, I'm spending more money on music than I ever did before, and I'm not even considering bothering with piracy. I'm living the promise that if only accessing music legally is easy enough, the pirate will stop being pirates.

So small artists are getting screwed over. Is that in Spotifys interests to sustain that? I would not think so, because the value proposition falls apart if the available collection isn't comprehensive. But right now, they're preoccupied in a land grab, for which they need to focus on the big labels, as the land grab will be possible without small indies, but not without Rihannas full back catalogue.

If you're an artist and you don't think Spotify is a good deal, feel free to withdraw your music - that will push them to think about how to adjust their business model to better accommodate indies.

Spotify is nowhere near having finalised their business model. Declaring the whole thing dead on the back of a few blog posts is just a little bit premature.

[worldvoyageur]

OK, to be less glib and more constructive. A sustainable music distribution model needs to work for:

- the distributor (iTunes or Spotify, for example) or it is not sustainable - the users, or they won't use it - the makers of music, or they won't put their music on it - the owners of music, or they won't put their music on it

If it works for all four, then things are aligned for a sustainable business model. If any one is missing, then the thing can't stay together.

iTunes, check, check, check, check. Four fingers fold in, thumbs up.

Spotify. Works for users, at its existing price point. Doesn't work for makers of music, unless the price point changes, at which point it won't work for the users - unless we are all missing that Spotify can charge significantly more and users would still be happy. Can work for large music owners, but as the original article points out the large owners can achieve this for themselves in a way that no longer works for Spotify.

Spotify is a valiant attempt at a new business model. If anyone can make it work, they are the ones and I salute them for trying. I just don't see how they can succeed.

[mseebach]

iTunes doesn't work for me for discovery. The killer feature for me in Spotify is that I can give anything a listen with no effort and no marginal cost. I subscribe to various third party play lists, so I get suggestions pushed to me. If I like something, then there's a tangent for me to go off and explore. Also, although a much smaller concern, is multi-device asset management. Having to copy stuff around is annoying, which means I don't do it, which means the collections on my work and private computers and my mobile are constantly out of sync.

But where I think you're mistaken is in that the business model conceptually doesn't work for makers of music. If I'm anything to go by (and anecdotally I am), Spotify facilitates a lot of new revenue to enter the system. The concrete distribution of that revenue currently doesn't favour indies, but there's nothing inherent about the business model that says that couldn't change.

Perhaps tier the payment per stream: Random access gets low (radio-like) payment, repeated access get higher and higher payment until $1 (iTunes price) is hit, then little to nothing after that. My listening patterns would certainly make such a model sustainable.

[untog]

I subscribe to various third party play lists, so I get suggestions pushed to me.

I strongly suspect that you are not the typical user. last.fm has been around for years, but still barely anyone uses it. It seems the majority of people use iTunes and Spotify in the same way- to look up and listen to their favourite artists.

[ryanhuff]

As somebody who has tried last.fm, I found the experience lacking. But that doesn't necessarily mean that the model is flawed.

[ryanhuff]

Is it really true that a sustainable distribution model needs to work for all of these stakeholders? Sustainable doesn't necessarily mean that it puts food on everybody's table, but instead, that it just exists, and that the participants (musicians and users) reach mutual agreement through their activities/participation.

Wouldn't musicians continue to produce and distribute music even if they weren't able to monetize it through sales? Sure, its great to reward musicians for their work, and they'd love to sell CD's and digital downloads, but being a practicing musician seems to be one of those things that musicians are driven to do, regardless of whether there is a paycheck associated with it. If music sales disappeared tomorrow, my guess is that musicians would continue to produce quality music and find an audience.

If Spotify isn't "working" for makers of music, then either Spotify will fail, the expectations of "makers of music" will change to match the reality of Spotify.

[hcurtiss]

I find this comment really unfortunate. I suspect you'll find that, notwithstanding their love of the trade, musicians are just as interested in getting paid as the rest of us. Unfortunately, given high transaction costs (in the econ 101 sense), they're not very well positioned to negotiate better terms. The only way they get paid is if the music consumer purchases their product in a manner that benefits the artist. As the comments above indicate, Spotify is not it.

[weazl]

How much do you make per listener if one of your songs is played on the radio? Honestly, I'm asking because I want to know.

In any case, you can not compare Spotify's subscription model to direct sales, it is just not the same thing.

[ecaradec]

Corrolary : if piracy leads to anything above 1 sell for 3500 illegally downloaded songs, it is actually more beneficial to majors that Spotify is.

[krambs]

Maybe a good point - but 3500 listens isn't the same as 3500 downloads.

[onemoreact]

True, but it's easy to download a lot of music you don't listen to so it may be closer to 1:1 than you might expect.

[tomjen3]

Indeed.

But it is properly not the labels that killed it.

I have no problem with paying reasonable prices for stuff (I have brought way too many books on kindle, plenty of music on iTunes, etc) but I see no reason to use spotify/last.fm/pandora over grooveshark.

It lets me stream what I am interested in (whether a specific song or a particular genre of music) when I want it. That is really all I want in a music service.

The irony is that it makes me a pirate (maybe, I am not quite sure if it is still called that when I don't upload) but I am a paying member of grooveshark (and has been for years). If the music guys makes a legal clone of grooveshark, I would properly be a member there instead.

[Rusky]

How much is that affected by the record labels, I wonder?

[onemoreact]

It also takes more than 1 purchase for an artist to make 1$ on iTunes as well. Still, for a lot of people Spotify is a substitute for the Radio and Piracy not just music purchases at which point Spotify is probably a significant net gain for artists.

[thomaslangston]

BandCamp.com charges $0 to listen to streaming songs, but charges to download.

It seems to have a pretty sustainable business model.