[EDIT - this post is a couple of years out of date - for a more recent appraisal of where I stand with Spotify, see Why I've Taken My Music Off Spotify]
There were a few articles kicking around yesterday touting a figure that ‘Lady Gaga earned $167 from Spotify for over a million plays’ - I think the story originated on TorrentFreak.
Perhaps not surprisingly the writers at TorrentFreak aren’t too au fait with the way that payment systems work for artists. The figure quoted is a publishing royalty – it’s from STIM (The Swedish Performing Rights Society). It doesn’t reflect payments due to the performer direct from Spotify (outlined in somewhat confusing detail in this Guardian article) which, according to the CEO of We7, are roughly ten times the PRS-collected royalty payment. It’s this figure that may or may not have been negotiated downwards by Spotify with the major labels – the labels have pretty much no say over the rates that the PRS set (other than through lobbying).
There’s also no mention of whether that’s the fee going to Stefani Germanotta (apparently Lady G’s real name) or whether that’s the entire payment, to her publisher, of which she and the other writer, RedOne, get a share.)
So, we now have a situation where for 1 million listens (that’s not downloads, or tracks sold, it’s listens) Lady Gaga has received a royalty of $167 (approx £100, give or take 49p) plus, according to estimates, a performers payment of $1670.
This also doesn’t take into account
- any (unreported on) direct sales through the service (via Spotify’s digital partner 7Digital),
- anyone listening on Spotify to audition the track, then heading elsewhere to buy it (because, say, they have an iTunes account that they use for buying tracks, but use Spotify to listen to them because iTunes has painfully annoying 30 second previews).
The article does mention that she’s had 20 million paid downloads. 20 MILLION paid downloads. (that warrants a Dr Evil pinky-in-the-corner-of-the-mouth pose).
Yup, that’s not the headline, that her digital strategy that includes Spotify has lead to her selling 20 MILLION downloads – in an age when any of those 20 million sales could’ve been grabbed from a file sharing service or copied from a friend (I’m taking a wild guess that Lady Gaga fans run in packs – she doesn’t strike me as the kind of artist that appeals to the friendless reclusive goth kid with the idiosyncratic taste).
No, instead, the fact that for 1 million listens via ‘radio on-demand service‘ (which is what the non-premium version of Spotify really is), she was paid WAY more than she would’ve got for an equivalent number of listeners on, say Radio one’s breakfast show.
According to The Mirror, back in August, Chris Moyles had 7.7 Million listeners for his show. And according to the PRS website (see screen-grab above), Radio One pays £17.68 per minute for airplay.
So, if we multipy that by the length of ‘Poker Face’, which Spotify tells me is 3.57 (we’ll round up to four minutes), that’s
£17.68 x 4 = £70.72, for 7.7 million listeners.
So, let’s divide that by 7.7 to get the value for 1 million listeners:
£70.72 ÷ 7.7 = £9.18, for 1 million radio one breakfast show listeners
And no additional artist payment from the BBC, as well as no direct link to a place to buy it next to the track, a good chance that a big number of those listeners wouldn’t even find out who it was and no way of the person hearing it saying ‘hey, check this out!’ with a direct link to everyone else that they’re friends with and therefor likely to share some music taste with.
So, in summary -
- Spotify, 1 million listeners = £100 royalty + £1000 fee + maximum shareablity.
- Radio 1, 1 million listeners = £9.18. That’s it.
Spotify isn’t by any stretch perfect. I’ve written about this before. But it’s not the disaster this bogus, statistically questionable, piss-poor journalism is making out.
Just to repeat, the headline here is that in an age when people can Torrent whatever they want, Lady Gaga’s digital strategy has netted her 20,000,000 paid downloads. An ocean-liner filled with WIN is sailing her way.