Spotify - A New Revolution Or A Nail In The Coffin...
August 4, 2011
Recently I was discussing the benefits of getting your music on Spotify over on hypebot. From running a digital distribution company for five years now, I realize how important it is to be involved with new technologies from the start. Everyone here at Ditto has been looking forward to Spotify’s US launch.
* Major labels earn more per stream than unsigned artists
* Unsigned artists earn 10% percent of a penny per stream.
* Major labels have a percentage share in Spotify.
When Spotify launched it was not easy to convince labels to hand over their content. Spotify had to give them an incentive. The idea of handing over catalogue to a brand new service who would essentially be giving it away freely, was not very enticing.
Here are some comments we received from Facebook and Twitter
@iamcurio "I think spotify is more about discovery and finding new listeners for you music rather than making a living from it..."
@behyped "It's about how important Spotify will be as a music listening tool. If it is, then it is worth having your music on."
@2HungryBros "It doesn't reflect nor does it motivate ppl to buy music when its readily available- or if they hear it then MEDIAFIRE SEARCH.
Spotify is valued at $1 Billion US, so artists may feel that payouts of less than a penny are insulting.
Whilst Spotify may be worth $1 Billion, this is not money in the bank.
Spotify reported losses of $4.4 million for the year 2008 and last year alone paid out $60 million in royalties alone. At this point in time Spotify aren’t necessarily holding back revenue from indie artists, they simply don’t have it. Their investment team along with the music industry are taking a leap of faith that this model will at some point, be sustainable.
If you have had 1000 streams and are worried about only earning $18 then you need to ask yourself - were these 1000 sales I missed out on?
What percentage of these people are new listeners? What percentage of these streamers went on to purchase your music or check out your website?
Today, artists need to take advantage of these platforms as much as possible.
Here are some interesting facts
Artists with the highest streams sell more music
Artists that give away music for free sell more music
Lady Gaga is currently the highest streaming artist in the world. She is also the second highest digital seller in the world, next to Eminem. She is also GREAT at her social media.
You may only have a couple of seconds to grab and hold someone’s attention. Imagine a listener hears about your music, goes to Spotify to check it out, and it isn’t there. They may stay on Spotify and listen to something else but chances are, they won't spend much more time searching for your music. Once that moment is gone, that may be the last course of action that potential fan makes to check out your music.
Here are two things you can do right now to get the most out of streaming music on Spotify and to make sure that you don’t lose any sales.
1) Delay your release to Spotify for 3 weeks after the release date to push people towards purchasing the release instead of streaming.
2) Release a sampler of their album (just 3-4 tracks) on to Spotify to build buzz for the official release of the full product.
Hope this helps.
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