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Follow-Up: Spotify Royalties Beat Radio Royalties; Does That Matter?

Posted by - 11:14 AM on 07/18/13
After the whole "boycotting Spotify" thing, Forbes took a look at the math behind Spotify royalties and came to the conclusion that they're better than terrestrial radio -- in fact about 16 times better. They also get a little cynical at the news that Thom and Atoms for Peace have helped launch a new live music streaming service just a few days after criticising Spotify, but I'm more interested in if we should be comparing streaming services to radio plays or purchased rates. Given that you don't "own" the music you stream, I'm more inclined to side with the idea that it's closer to a radio play (and should be compensated as such), but I think those rates need to be higher as well. However, I'm willing to be convinced otherwise. Thoughts?
 
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11:17 AM on 07/18/13
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JamieTheSonger
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But Spotify can essentially replace actually purchasing music.
11:19 AM on 07/18/13
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Steve Alcala
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I feel like some services lean closer to actually owning music, such as Spotify's "save a track for offline listening" feature. It's all perspective I guess.
11:26 AM on 07/18/13
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Jason Tate
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But Spotify can essentially replace actually purchasing music.
I suppose in the same way that Netflix can replace actually purchasing DVDS. But I think there is a difference between having, in perpetuity, a song or album -- and one that could disappear tomorrow. I think it's closer to owning than a radio play (and should therefore come with a higher royalty rate) but not the same as purchasing "forever."
11:26 AM on 07/18/13
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CluckyB
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The difference between radio play and spotify is huge. Radio play gives you little control over what you listen to. You can call it with a request, sure, but if you want to listen to a specific song you might need to wait a while even if its popular, and if isn't popular/you want to listen to a whole album you are probably out of luck.

What does it even mean to "own" the music you stream? I can own a song I get of iTunes, but if my computer crashes and iTunes goes away then that song is gone just like if Spotify goes away then the song there is gone. Sure i need to keep paying Spotify money to listen to it, but I also need to keep paying the power company money to listen to my iTunes songs...
11:28 AM on 07/18/13
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Dustin Harkins
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But Spotify can essentially replace actually purchasing music.

I suppose in the same way that Netflix can replace actually purchasing DVDS. But I think there is a difference between having, in perpetuity, a song or album -- and one that could disappear tomorrow. I think it's closer to owning than a radio play (and should therefore come with a higher royalty rate) but not the same as purchasing "forever."

Agreed.
11:33 AM on 07/18/13
#7
HappyTheHippie
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I hope nobody believes Thom cares about how much other artists are being compensated.
11:34 AM on 07/18/13
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Jason Tate
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The difference between radio play and spotify is huge. Radio play gives you little control over what you listen to. You can call it with a request, sure, but if you want to listen to a specific song you might need to wait a while even if its popular, and if isn't popular/you want to listen to a whole album you are probably out of luck.

What does it even mean to "own" the music you stream? I can own a song I get of iTunes, but if my computer crashes and iTunes goes away then that song is gone just like if Spotify goes away then the song there is gone. Sure i need to keep paying Spotify money to listen to it, but I also need to keep paying the power company money to listen to my iTunes songs...
When you own an iTunes song, they're DRM free, you can do whatever you want with them. Burn them to physical media, back them up, etc. Comparing paying the power company to paying Spotify is a tenuous relationship.
11:47 AM on 07/18/13
#9
hoosierbrad
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I use Spotify daily, but only at home when I'm on my computer. I've never paid for it and probably never will, but I buy more music than anyone I know personally so I don't see an issue with using it for free. Most of the time I'm Spotify-ing an album I already own, but don't have on iTunes.
11:50 AM on 07/18/13
CluckyB
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When you own an iTunes song, they're DRM free, you can do whatever you want with them. Burn them to physical media, back them up, etc. Comparing paying the power company to paying Spotify is a tenuous relationship.
True, the level of "ownership" over a spotify song is less than the level of ownership over an MP3 off iTunes, but there is still a certain about of ownership over both, far more thn you get from the radio or even pandora
11:54 AM on 07/18/13
Jason Tate
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True, the level of "ownership" over a spotify song is less than the level of ownership over an MP3 off iTunes, but there is still a certain about of ownership over both, far more thn you get from the radio or even pandora
I'd agree with that ... and thus believe Spotify's rate should be higher (and it appears, by the article's math -- it's already 16x as much) ... I think radio's rate should be higher too, but that's gonna put them out of business.
11:57 AM on 07/18/13
CluckyB
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I'd agree with that ... and thus believe Spotify's rate should be higher (and it appears, by the article's math -- it's already 16x as much) ... I think radio's rate should be higher too, but that's gonna put them out of business.
Right. I think ideally artists would get more money from sptofy and radio, but the profit margins are already so thin that raising rates would probably drive people out of business.
12:22 PM on 07/18/13
Holly HoX!
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I don't like the Spotify model but it's a monstrous force that isn't going to stopped. People will get what they want when they want it. Musicians just need to adapt and cater to fans who still feel it necessary to support artists they like and care about. Simple as that.
12:23 PM on 07/18/13
Holly HoX!
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Oh and Jason, I had to chuckle at "willing to be convinced otherwise" bit.
12:54 PM on 07/18/13
The Old Black
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When you own an iTunes song, they're DRM free, you can do whatever you want with them. Burn them to physical media, back them up, etc. Comparing paying the power company to paying Spotify is a tenuous relationship.

Isn't there more to it though? I remember a story about someone famous (Travolta or Bruce Willis, if I recall) who tried to put his iTunes collection in his will and was told you can't transfer ownership, even to your children after you die.

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