Myth 6: Spotify is killing download and CD sales
This could be true, but that’s a small picture view.
First, it’s not realistic to assume every stream was a possible sale. Sure, a few people who streamed the music might have bought a CD, but that number is much lower than what musicians might admit. We might consume more music if the cost barrier is much lower. I might check out that country song I’d never purchase for a $10 CD.
Second, the big picture view is recognizing that advances in technology have been killing CD sales (and soon $1 downloads) for years. Kids already use Youtube to stream songs on command, and they will put up with the inconveniences of that way to interact with music because it’s free to do so.
My dad spends hours finding old Doo Wop music on Youtube. He has no interested in using Spotify, but he’s already using a streaming platform.
What we can assume is streaming sites are killing piracy. If you offer a simple, easy to use service for music, the regular public will stop dealing with the difficult process of torrenting music.\
Spotify Myth 5: Musicians were OK with songs being on the radio for low pay, so they should be OK with Spotify for low pay. It’s promotional!
False. While musicians want new fans to find music through Spotify, musicians also want to make some revenue from the music consumption.
Radio promoted sales because people heard a song and then bought it so they could hear it again, at their will. Spotify offers a way for people to hear a song at their will, offering no reason to purchase the song. The hope is that enough people will stream songs to create some revenue for the musicians/songwriters.
The questions are does the pay rate offer enough for musicians, and are the streaming sites making enough to be viable companies? Is this model sustainable?
Myth 4: iTunes radio is like Spotify or Pandora!
FALSE
You don’t compare the radio in your car to your MP3 player, do you? Spotify is more like your MP3 player, except it has a gigantic library that streams from the cloud. You control what you listen to. You don’t control radio, other than the channel you select.
I find this comparison really frustrating.
Myth 3. Spotify gives 70% of the revenues to rightsholders, the exact same amount rendered by iTunes.
This misleading comparison ignores who’s receiving the money. Spotify is comparing what they give in total, not what all artists make individually.
iTunes downloads were upfront, no matter what song was downloaded. Buy the Neon Trees song for a $1? Buy a Mike Vial song for a $1? The same 70% goes to the artist/rights holder.
Streaming a Mike Vial song on Spotify doesn’t pay him the same rate as streaming a major label song because the labels worked out their own deal with Spotify, and we don’t know what that deal is.
An indie licensing through CDBaby does not get the same deal as say Rihanna through Def Jam.
Myth 2: A stream pays an artist $0.006
Not completely true. Not every stream pays the same rate.
For example, some people use Spotify for free and hear ads between songs. I’m assuming those types of streams don’t pay the same rate as other uses who pay the monthly or annual fee.
Also, a partial listen doesn’t pay the same rate. I’m guessing that one account streaming one song multiple times in a row doesn’t pay the same rate. So it gets tricky.
Here are some examples of Spotify stream pay rates I received for my song “Reaching Back”:
$0.00618899
$0.00095843
$0.00104792
