from a recent
Wall Street Journal article on Spotify compensation…
Critics of Spotify’s compensation have homed in on the
0.6-to-0.84 cent the streaming service said is a reasonable
estimate of what it pays per play. (The company actually has a
formula that relies on ever-changing variables for getting at
that figure.) But Spotify has released another number worth
noting: $2 billion. That’s the amount the
company late last year said it had sent to rights holders
globally since its inception in 2008.
Cooking Vinyl co-founder Martin Goldschmidt
says those focusing on the tiny payments artists receive are
missing the bigger picture:
“The more interesting thing is the fact that I’m earning more
money,” he says. “[Spotify] is earning artists and the industry
And there’s a not-insignificant bonus: Streaming services that
offer easy, paid access to music have proven an effective way
to draw in listeners who might otherwise choose illegal
downloads, Mr. Goldschmidt said. He calls Spotify “the best
thing the industry has ever done to fight piracy.”
“Music is consumed now more than it ever has been on the
planet, but most people don’t pay for it” or pay “very, very
little,” he says.
“What Spotify is doing is getting people to pay for it.”
Sachin Doshi, Spotify’s vice president of content and
distribution, said he thinks the company has found a formula
for growth that “will help bring the industry to its
peak and beyond.”
It has a way to go: U.S. recording-industry revenue topped out
at $14.6 billion in 1999. In 2014, it was $7 billion.
Complaints about Spotify’s payouts might just as well be
directed at that dropoff, in an industry battered by piracy and
myriad new players competing for music fans’ eyes, ears and
dollars. It’s hard to pay musicians with money that isn’t
“A lot of artists think the world owes them a living,” says Mr.
Goldschmidt. “And it doesn’t.”
Image: taxcredits.com, adapted under a Creative
Commons Attribution 2.0 Generic (CC BY 2.0) license.