It's all in the accounting, or: SPOTIFY ISN'T THE ANSWER

Robert Fripp is a guitarist and founding member of King Crimson. He maintains an online diary. From his diary for September 14, 2009…

“Two King Crimson tracks, provided for a CD release to Universal Music Group (although with reservations & with digital rights withheld) have been provided by UMG to Spotify. Those visitors interested in the music industry’s development of ‘legal downloads’ and new income streams for artists may be interested in the following.

“From a Power Possessor at UMG…

What I understand has happened.. is that in our systems there are two versions of the Anthology. One of these is for physical and has the two King Crimson tracks and one is for Digital which does not have the two King Crimson tracks. What happened was that the person who supplied the album to Spotify supplied the wrong version…

I have had royalties delve into this and they have advised me that “Cat Food” has been streamed 353 times and “Groon” 265 times. This has generated a payment to Island Records from Spotify of £1.61p.

I have been assured that the recordings have been withdrawn from Spotify and steps taken to ensure that this will not arise again.

“£1.61 gross on 618 streams, then reduced from gross to net artist royalty on tracks improperly provided by UMG – a shareholder in Spotify? Is this seriously being presented as a future for the industry?”

More on Spotify and other “music subscription services” at the New York Times.

Categories: Uncategorized | Tags: , , , | 11 Comments

About Jay Babcock

I am the co-founder and editor of Arthur Magazine (2002-2008, 2012-13) and curator of the three Arthur music festival events (Arthurfest, ArthurBall, and Arthur Nights) (2005-6). Prior to that I was a district office staffer for Congressman Henry A. Waxman, a DJ at Silver Lake pirate radio station KBLT, a copy editor at Larry Flynt Publications, an editor at Mean magazine, and a freelance journalist contributing work to LAWeekly, Mojo, Los Angeles Times, Washington Post, Vibe, Rap Pages and many other print and online outlets. An extended piece I wrote on Fela Kuti was selected for the Da Capo Best Music Writing 2000 anthology. In 2006, I was one of five Angelenos listed in the Music section of Los Angeles Magazine's annual "Power" issue. In 2007-8, I produced a blog called "Nature Trumps," about the L.A. River. Today, I live a peaceful life in the rural wilderness of Joshua Tree, California, where I am a partner in JTHomesteader.com with Stephanie Smith.

11 thoughts on “It's all in the accounting, or: SPOTIFY ISN'T THE ANSWER

  1. Let’s be clear here. 618 streams is nothing. How much would Mr. Fripp recieve if he was played once on a local radio station with 618 listeners? I can assure you it would be much less than £1.61p.

    The big problem with parts of the music industry is the complete failure to understand streaming. Of course in many cases, such as with King Crimson, greed plays a huge part.

    Robert Fripp is a person that doesn’t care one thing about his fans. All he wants is more money. If all artists shared his uneducated views the world would be an awful place.

    At the moment he gives the Spotify listeners just one great option: to download his music from pirate sites. And how much money does that give him in the end? Nothing. Great work, Mr. Fripp!

  2. JB is exactly on point. The purpose of Spotify, at least as I see it in this phase of its development, is to serve as both limited revenue stream for the artists and as a generous introduction to their work. If a listener can browse through a representative selection of an artist’s work–in a way otherwise impossible through conventional commercial structures–then that listener may become a readier consumer of that artist’s work, both in the short- and in the longer-term.

    To take the extremely myopic view and say, such-and-such song was played X times and I only saw pocket change, is to misunderstand entirely the potential of Spotify and its revolutionary business model.

  3. JB and Sobsister – Spotify’s stream replaces purchase, and the income it generates is inequitably distributed. It’s a net loss for the artist and for the culture.

  4. Jay,

    I disagree, because that “stream replaces purchase” assumes wrongly that, if I listen to song X now, it means that I’m only doing so in lieu of buying the song.

    a) I could be doing so as a longer preview than, say, iTunes allows.
    b) I could be doing so to familiarize myself with an artist whose name–but not music–I’d heard in preparation for a purchase decision.
    c) I could be doing so simply because I feel like hearing the song, period.

    (c), in particular, speaks to your point. The fact that I’m listening to the song because I can do so right now does not in any way mean that I would be buying the song (assuming its availability on a per-song basis) otherwise.

    Free listening does not equal lost sales, because free listening, in many cases, is a matter of opportunity. I get to listen to song X free? Sweet! If tomorrow you tell me I can’t hear that song free, however, I’m not going to buy it simply because it’s otherwise unavailable. Some might d/l it illegally, some might buy it, some might just shrug and listen to something else.

    But there is no one-to-one, zero-sum relationship between free listening and paid listening. To claim otherwise grossly overstates *the significance of a single hearing* of song X for the individual listener and for listeners in the aggregate.

    Further, concerning your statement that a free listen is “a net loss for the artist and for the culture”…how do you measure that? As I’ve shown above, a free listen does not inherently mean a lost sale. So, how does the artist lose? How does “the culture” (and I assume you mean the cultural community of musicians, rather than Culture writ large) lose? I would hold the exact opposite: a free hearing adds listeners to the artist’s audience, who may then become CD buyers or song buyers or ticket buyers.

  5. Sobsister: For the vast majority of music subscription service users, there will be no additional purchase, because the service will provide them with all they need: the ability to listen to the song they want to hear, when they want to hear it, in the way they want to hear it. This “all-you can eat”/”jukebox in the sky” is what power holders are building now, and Spotify is part of it. Robert Fripp is merely pointing out what the income looks like from the artist’s end, right now. It’s hard to look at these numbers and see how this model of distribution can be said to be Culture-positive.

  6. One could of course point out that Spotify is not an issue for artists on indie labels who control their music, which is as it should be. Mr Fripp’s problem is actually that he is not in control of his music — which is of course a legitimate problem.

    On the other hand. Doing some very crude math, if you assume that the wholesale rate received by a label for an album from their distributors is about £5, it would take 2,500 streams on Spotify to supply the same amount of revenue. Figuring 10 songs/album on average, that’s 250 streams of each song. So you’d need 250 people to listen through the album to generate the same amount of money as one CD sale. That can be fine, if you assume that the number of potential listeners on the internet is large enough to cover the number of CD sales. For an indie band, you’re doing damn well if you sell 5,000 CDs. That would then be 1,250,000 people listening through the whole album on Spotify. Seems unlikely, doesn’t it? So the math doesn’t work very well.

    Personally, though, as a former label owner and current musician, I firmly believe that, for better or worse, music is now a free commodity. Whining won’t change that — and in fact nothing will. Music is already pretty much free. People may continue to buy online for a while, but I’ll be very surprised if it doesn’t decline to nothing over the next 5-10 years, if not sooner. Musicians who want to make a living at it will do what indie bands have always done anyway — tour, play shows, sell t-shirts and vinyl and other limited goods: things that people will pay for.

  7. Mason –

    Good comments!

    A few things:

    1. Mr. Fripp is in “control” of his music, or at least the music remarked on in his diary post. But that doesn’t stop it from being on Spotify, as he has shown. So: another thing for him to police.

    2. Spotify isn’t good enough for artists, or for Music, or for Culture, and won’t solve the underlying issue. It’s not “whining” to point that out.

    3. Counseling that bands simply tour or sell merch is not satisfactory. Frankly, the live experience infrastructure in the USA is not set up to support quality live experiences in anywhere near the quantity that the current artistic community requires to survive. There is a huge glut of bands out there, enabled by ProTools/mySpace/internet bullshit, smothering a lot of good artists, who are going to see their careers end prematurely (“prematurely” relative to how long they coulda expected their career to last if they’d emerged pre-1999.) We’ll see who makes it out the other side of this Great Winnowing.

  8. Jay,

    You’re right about Fripp’s control; I misread something up above. Which makes sense — I was surprised to think that he’d changed anything there regarding Discipline Global.

    What I referred to as “whining” was the fact that I’ve seen quite a few musicians and bands recently essentially denying reality and pretending that there’s still a future for record deals. As you said, pointing out the weaknesses of various possibilities isn’t whining, but let’s say it’s a step in that direction.

    Others have pointed out elsewhere that things are not in fact bad for bands right now, and are exceptionally good for music fans. Things are extremely bad for major labels whose revenue structure relies on the sale of tracks — and many of them. If they realize that their strength lies in marketing, not production and distribution, then they may still come out of this with something intact; we’ll see.

    For bands, I very much understand what you mean about live music in the U.S. I’ve done quite a few tours and have barely broken even most of the time. It’s rough. However, many friends of mine have built a good framework for themselves through constant touring and just sticking with it (and, sure, playing kick-ass music!). It’s quite possible, and I’m optimistic enough to believe that quality will shine through the glut. I know very well that luck has a lot to do with it, but perseverence does as well. If the huge glut of bullshit bands keeps a good band down, then that good band either wasn’t good enough, didn’t stick with it enough, or, perhaps, was simply unlucky. The loss is both theirs and ours, yes. If we want to be optimistic about this, we can hope that the ability of the internet to provide such a massive selection will lead to listeners finding a niche they love, and put an end to the corporate-endorsed lowest-common-denominator “star”. The cynic in me laughs at the idea, but we can hope.

  9. Pingback: 8 Artists You Still Can't Find on Any Major Streaming Service - HOMEPAGE

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