The Wall Street Journal has this analysis about Spotify
People want music for free with no advertising.
People want music for free with no advertising.
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Spotify Is Struggling
- Thread starter TheBigA
- Start date
A few years ago, YouTube instituted a no ad-blocker policy. Contrary to all intentions and faster than you can say Streisand Effect, ad blocker use suddenly exploded from geek kid add-on to mainstream standard To the point it was self-defeating for Google to carry on fighting.
The policy is still there. But it's extremely difficult, costly and fruitless to enforce with all the evolving VPNs, anonymizers and other tools available to high skilled users.
And enforcing the YouTube ad-blocker ban was having the ugly side effect of making highly skilled Firefox/Opera users out of what were once low-skilled cheap Chrome/Edge wanderers. And with the advertising delivered in infinite other ways in those browsers, Google especially doesn't want to lose them.
Google can't ban the other browsers either. They would never hear the end of it. Internationally.
It's tough all over.
And yet, we in radio lose money to digital. Some of the most easily blocked or ignored advertising there is.
And also some of the oldest, with many well known examples of radio ads dating almost all the way back to the beginning of commercial radio broadcasts in the 1920s.
c
Part of the problem here is that, prior to the arrival of digital media, when you purchased physical media (album, CD, cassette) from a record store, it was yours to do as you wanted to with it. Yes, the recording industry screamed bloody murder about people (like myself) who put songs on to blank cassette tapes (this, despite the U.S. taxes on blank cassette tapes that benefited that very industry--they had some gall!) but there wasn't anything they could really do about it.
Along comes digital media and the recording industry, fearing for its life, creates an intellectual property rights treaty which is turned into law (the 1998 Digital Millenium Copyrights Act or DMCA). And now the music industry not only gets to legally go after groups (like Napster) who allowed end users to download music without charge) but charge legitimate businesses (such as radio/Internet simulcasters and Internet-only webcasters) exorbitant per song per listener fees that have driven many, especially in the latter category, out of business. Under this scenario, Spotify will never be able to become very profitable no matter what it does.
It depends. The music royalty situation makes it incumbent on these companies to diversify, and not simply be distribution systems for music. Spotify has begun doing that by adding a podcasting element.
One thing that helps Spotify is that it's a worldwide music service, and music royalty costs are different in every country.
Spotify had its first profitable year last year 2024. They seem to hinting that podcasting is going to lead them to "higher margins".
IMHO this is "corporate speak" that their current business model isn't going to take them much farther.
IMHO this is "corporate speak" that their current business model isn't going to take them much farther.
The record labels' goal is to take 100 percent of the profit from streamers, and it seems they have accomplished that. They want to do the same with broadcast radio too, if they finally bribe enough lawmakers in Washington to pass their wet dream royalty bill.
And how much of that profit goes to the artists.
According to the terms of the DMCA, artists get 49% of the royalties collected.
And who audits that? Who verifies the industry's numbers?
Because these are people with a track record of pure motives and impeccably honest business practices. Right? Right?
I keep hearing from bands that Spotify pays the worst. So who is getting the money.
The Copyright Royalty Board. But anyone can challenge the numbers. There have been numerous royalty disputes over the years.
Spotify, Apple, Amazon, and major streamers have negotiated separate deals. My understanding is that artists can opt out if they don't like the rate. I recall The Beatles kept their music off Apple for a long time. I believe Garth Brooks has also opted out of Apple Music.
Garth Brooks Explains Why His Music Will Never Be On Spotify or Apple Music
"I stick up for the songwriters because I’m freakin’ one of them! Everything I do for the songwriters, I do for myself.”
countrytown.com
Who can challenge royalty?
That's a special case. It wasn't just about the royalty rate. The remaining living Beatles, and the estates of the deceased ones, had a residual hostility towards Steve Jobs and Apple Computer for the way they unilaterally broke the original agreement not to expand into music. Apple had originally agreed to stay on their side of the wall, and with the iPod and the music store they broke that contract (in the eyes of the Beatles and Apple Records).
However that dispute was settled in 2010
Apple and the Beatles: The End of a Long and Winding Road?
The decision by Apple Corps, the Beatles' music company, to allow distribution of Beatles songs on iTunes appears to have been vindicated by the initial sales figures achieved (two million singles sold in the first week, reports Billboard). However, the release of Beatles' music on iTunes, the...
foleyhoag.com
AFAIK, Garth Brooks hasn't settled, and has an exclusive streaming deal with Amazon.
An acquaintance of mine was spending $500-1,000 a month on digital advertising when he launched his business. He decided to experiment one month and cut it back to $100. He saw no significant change in sales or traffic. I haven't run into him in several years, but I assume he hasn't kicked the digital spending back up. He was debating dropping it altogether, and it's been a long time since I've seen or heard one of his ads.
Bob Seger is another who was a longtime hold out, though some of his movie songs were available last I'd checked. When I saw Garth in concert in 2019, he mentioned a website either of his own or with a partner that had his music available for download. Far as I know, he'd never made any of his music available digitally before then.
The one thing that should keep the recording industry executives up at night. Petty soon there will be no need for their services. Someone will sell artists and bands an A. I. program that will be able to do promotions and keep track of distribution and sales.
You're talking about "GhostTunes." That was short-lived idea that he replaced with Amazon.
Joe Rogan is getting a big chunk$ for his podcast and oddly is also available on other podcast platforms including Apple's Podcast App.
I think there is an exclusive window that Spotify has.