Image via blogs.wsj.com
"The ladder of success is best climbed by stepping on the rungs of opportunity." – Ayn Rand
Spotify has recently been in the news for Taylor Swift’s decision to remove her catalog from the service, prompting much debate over whether or not it pays artists fairly. Ben Berry, co-founder of the band Moke Hill, has a different perspective than most musicians do on the streaming service.
In his recent article for Wired, Berry claims his band would be nowhere without Spotify. He breaks down the streams to the dollar figure (albeit the math is not exact), showing it's certainly a money-making platform that shouldn't be dismissed. Spotify keeps 30 percent of the gross revenue, which is used to pay employees and keep the service running. After the 30 percent is taken, 60 percent is paid out to the owner of the masters, and the remaining 10 percent to the owner of the publishing.
Berry says:
"So, 204,250 Spotify streams equals $910.43. This means we're getting paid approximately $0.4457 for every stream. Since we didn't or don't have a label, we used a distribution service to get the EP to the digital services and never pressed any physical copies. That service takes 15 percent off the top, so Spotify is actually paying out more than we're seeing (approximately $0.5244 per stream)."
Perhaps Ben Berry would have a different outlook on Spotify if he didn't hold his music's masters and publishing licenses and a label was keeping a large portion of the money. In Taylor Swift's case, she made approximately $40 million last year when she didn’t even release a record, but instead earned income through touring, streaming, and album sales. Her label has stated that Swift only made $500,000 from Spotify. As Berry points out, this is very deceptive when you take into account that the $500,000 they're speaking of was made in the year after Swift released her huge hit album, Red. It's not surprising, then, that her sales would have decreased, as many fans would have already purchased the album within the previous year.
For an artist of Taylor Swift's popularity, she could hide her music in a secret chest, and it would probably still sell incredibly well. For indie artists who are emerging in the music industry, though, it's important to be aware of all your options. Streaming can be a great way to have your music heard, thus growing your fanbase.
Success takes time, so you need to have realistic goals when beginning to use any type of streaming platform. But if there's any lesson we can learn from all this, it's that you shouldn't make a decision based on just one artist's experience. All you can really do is just try it out yourself, and see if it's a viable income stream or marketing method for your music career.
Have you found any success with streaming services like Spotify? Let us know in the comments below.
Kathleen Parrish is a singer and songwriter from Seattle, WA. While she specializes in lyrics, she enjoys writing short stories, poetry, and journalism. For more information, please visit www.kathleenparrish.com.
