On Spotify and what passes for journalism nowadays

Written by Herra Paalanen on Saturday, November 7th, 2009

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An article regarding Spotify payments has been making the rounds in Finland over the past few days. According to the article the Finnish record label Sakara has received a whopping 31,40 euros from 118 119 streamed songs, and they are somewhat understandably upset. 0,027 cents per one streaming of one song isn’t exactly even a micropayment.

Here’s the thing, tough. I have yet to see any figures on what Spotify (a service currently in BETA, no less) is actually making at the moment, and what percentage of their earnings are being forwarded to the labels/artists. The article didn’t include a single word regarding the difference between a download and streaming models, either.

Certainly Spotify should be getting a lot more transparent with regard to its profit sharing model these days, but in its current form, this is just Bad Journalism and simplistic populism. Now, if Jonathan From Spotify is currently well on his way to making his first million, I’ll change my tune. Something tells me he’s still got a ways to go.

ETA: Here’s the original article, in Finnish. I didn’t even want to link to it to begin with, but there you have it in all its glory.

10 Responses to “On Spotify and what passes for journalism nowadays”

  1. It’s all very simple. Many bands/labels fail to understand streaming. Spotify is on-demand radio. 118 119 plays should be compared to getting one song played on radio to an audience of 118 119 people. How much would the label get from one such play?

    Significantly less for sure.

    Also, with Spotify the band/label will continue to get money as long as they exist in the service. And as Spotify grow bigger and get a higher percentage of premium members, the payments to artists and labels will continue to grow as well.

  2. JB makes a good point, haven’t seen it from that angle yet. You also have a good argument, Spotify is still in Beta so given that Mokoma and other probably also don’t make lots of money with CDs they should welcome Spotify as a way to get more people to legally hear their music and then attend concerts, where bands make the real money.

    Don’t get me started on journalism nowadays. People read Iltasanomat and Iltalehti instead of real newspapers, its a disgrace, really.

  3. One more aspect is that Spotify will also be sold to ISPs and operators, so they can offer their customers a value added or purchasable service. Will the artist see that money?

  4. How is Spotify in beta? I can’t see any mention of that on the Spotify front page or the client.

    Also, JB, like you said, Spotify is on-demand, radio is not. Traditionally on-demand music has been charged a premium, surely that’s why labels expect to get more money?

  5. Thanks for the comments, guys.

    There is a distinction to be made between on-demand and playlist radio, and the question of value added services is also interesting. My point was not that Spotify is above criticism, and I hope it didn’t come across as such.

    I’m just worried about the continuing trend of the discussion to get progressively more simplistic. Bad journalism doesn’t help.

    @Kalle: The front page, right under the logo? Beta.

  6. Well fuck me, there it is. Then again, I can’t find a carton of milk in the fridge.

  7. How beta is Spotify’s beta?

  8. Well, if nothing else, they’ve found a new business model in beta testing. The traditional approach in software development has been to pay testers, not the other way around :)

  9. Of course they won’t get the money they expected , streaming isn’t like CD sales or else, users don’t own anything , they just rent music for listen for a day or week ,month etc.
    But I think spotify like services is good for reach people , but bands, record labels should make money with gigs or something else

  10. And it’s not even launched in USA , in just a few countries.I want pay and use the service but I can’t use it from my country , so it has long to go get some power users who willing to pay for it

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