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Spotify: You do the maths PLATFORM URGES INDUSTRY TO BACK IT OVER YOUTUBE AS IT REVEALS ROYALTY RATE
DIGITAL n BY TIM INGHAM
Spotify says it can reach a premium subscriber base of 40 million users in the “near future” - as it urges the industry to compare its payout rates to YouTube’s.
The streaming platform launched a new artist-facing information website on Tuesday (December 3), which revealed that its average payout to music rightsholders was between $0.006 and $0.0084 per stream.
It said that this rate generated a monthly royalt y payment in July for a specific “niche indie album” of $3,300, while it paid out $76,000 across the month for a “breakthrough indie album” and $425,000 for a “global hit” LP.
A handful of the world’s top artists had generated payments of more than $3 million from Spotify in 2013 alone, it said adding that its average royalty payouts of between $6,000 and $8,400 per million listens compare favourably to figu res of $3,000 for a “video streaming service” (aka YouTube).
“Compared to online video services and internet radio services we’re doing really well - paying two or three times [the royalties] of other platforms,” Spotify artist services director Mark Williamson told Music Week: “We’re monetising [music] ver y well compared to those platforms.”
The new site, SpotifyArtists.com claims that if Spotify reached 40m pr emium subscribers, a ‘hit album’ could accrue as much as $2.1m per month for rights-holders. At last count, S potify had 6m paying subs - but industry insiders suggest it’s already close to 10m.
“We can grow - and grow quickly - in the near future,” said Williamson. “[The 40m figure represents] the trajectory we’re on. That’s the amount of subscribers we’ll have globally when other markets mature to the point th at Spotify has in certain places [like Scandinavia].
“It’s a vital number to reach and we’re going to do it. It’s a fraction of the amount of users of these massive existing services, and it’s totally realistic. This is not pie in the sky.”
He added: “We’ve managed to get across how we’re helping the industry - the inarguable fact that everyone has seen their Spotify [royalty] statements going up - whether a t iny band or a massive band. We’re not in the camp that believe you should give away your music for free and make your money elsewhere.
“We want to refocus the industry on making money from recorded music.”
S potify has paid out more than $500m to rightsholders in 2013, and more than $1bn in total since its launch in 2008.
Metallica (pictured) and Pink Floyd recently agreed to bring their catalogues to the platf orm.
SHARING THE WEALTH
Spotify pays rights-holders 70% of all income - but doesn’t control the amount labels apportion back to their artists. Scott Rodger, founder of Quest Management (Paul McCartney, Arcade Fire) told Music Week all his artists have deals with labels that ensure they receive between 50% and 90% of streaming income.
“We often hear of the older act who may be on a 15% royalty or less from their label,” he said. “At that point, their revenues form streaming are really nothing,” he said. “For [our] artists, the revenue is significant. It’s a challenge for the new artist with very little negotiating power to get terms that make sense for them.”
Added Tim Clark, co-founder of IE Music (Robbie Williams, Sia): “We’re big supporters of Spotify. The cost of digital distribution is minimal but the problem is the share that rec ord companies are prepared to give to artists. Digital deals should be a minimum of 50/50 - though we would expect a better split than that.”
Royal Blood sign deal with Warner Bros UK
The only rock act to make this week’s BBC Sound of longlist, Brighton duo Royal Blood, have signed to Warner Bros. on a global deal. Miles Leonard, chairman, Parlophone and cochairman, Warner Bros. Records UK, said: “Royal Blood are the most exciting band I have seen in years. No-one comes c lose. We saw them, we loved them and no matter what, we had to sign them to Warner. We share the same vision. We don’t have a policy of trying to sign everything that moves and because of that the band could see that they would get the right focus and attention they deserve here.”
Royal Blood manager Ian McAndrew added: “Wildlife Management want to share how excited we and the band are to be working with Warner Bros, we all look forward to a long and successful relationship.”