What people want is no justification for anything. If people want to have cars for free, are you going to facilitate that? No, Spotify just does it because they can get away with it, while filling their own pockets nicely at the expense of the creators of their merch (Ek's worth is estimated in the $billions).

> into fiscal gains

That does not contradict pay per stream, at all.

I think that balance of power has shifted from the artists to consumers which is driving down direct artist pay. I’ve still got the same amount of time each day to listen to music before streaming services existed, but now I’m afforded so much choice in music that each song/artist must compete harder for my attention. There’s always been way more talented artists than I could possibly listen to, but with Spotify I can now actually get the music to my ears. Now the limit is my time. All of a sudden, each artist is now competing with every other artist (and not just the big ones, either!) because of the new streaming distribution model. It seems natural to me that the price is going down.

The new streaming model also isn’t going away because it’s changed the way consumers engage with music. Before I would have to gamble on CDs/records in a pretty high-friction process. You would pay for the big names because you knew they would put something quality out, so it wasn’t as risky to buy their stuff. Now the cost for me to switch to other songs is basically 0, so I’m much more easily able to find stuff I like.

I’d argue that this new streaming model is incredibly valuable and warrants Spotify’s high valuation. Though, I agree with your sentiment here. Artists and their music power Spotify, so it seems fair that they get the lions share of value. Right now, it doesn’t feel like that. However, I think in the long run artists will win because their music is truly inimitable. Spotify, Apple, Amazon, Tidal, etc. are all fiercely competing on this distribution model. I haven’t seen a single feature that can’t be copied on any of these platforms. On the other hand, it’s basically impossible to copy another artist’s music (and make real money). Over time, I think streaming services’ margins will slim down because they must compete on price if they can’t compete on unique features. This will ultimately allow more artists to earn more money which is something I think we both can agree is what we want out of the music industry.

Spotify exists because artists agree to it. Before spotify the music industry was doing horribly, spotify largely is responsible for saving the entire industry.

> while filling their own pockets nicely

Spotify loses money every year. Sure it has a market cap in the billions, but if it never makes money that wont last long.

> Spotify is a music distribution tool that modern artists use to leverage their popularity into fiscal gains.

This is a skewed way of looking at it, that highlights the positive and ignores the negative.

It’s a lot harder to turn musical talent, productivity (writing & performing songs), and popularity into money than it used to be. Spotify is a big part of that change—and yes, it probably would have been a different company if it weren’t Spotify, but so what? In our history, it’s Spotify.

Besides a handful popular artists not making as much as they used to during the golden age of MTV and CDs, have things really changed that much for the rest? Music business was always extremely hit driven.

Smaller / medium bands have it rough compared to, say, the 2000s.

Music isn’t just hit-driven. There used to be more house bands, more bands who could make a living from tours, that sort of thing. These days, musicians try to find an audience on Spotify and social media and make money doing performances, selling merch, and going on tour, but the amount of revenue you make from that kind of work is a lot less.

Seems like an unlikely claim given that much wider variety of small artists making it work now than before

Seems like the opposite to me—small artists used to be able to make a living playing local bars, or maybe be a musician and have a part-time job, but nowadays there are so few venues with live bands.

Interesting point, but I think it is not a counterpoint. It may be true that there is less room for tiny performance acts with zero success on writing songs that people listen to. It is however a much better place for small acts that write songs that people want to listen to in niche interests. Such audiences can’t be sustained in a single locale.

That’s success in the sense that niche music is getting out to listeners—but I think we should also care whether these artists we like are able to pay for food and rent, and I think the picture looks somewhat grim.

If you’re productive and put out two albums per year, and you want to make half of your money from streaming, let’s say $40k per year from streaming, you end up needing somewhere around 10 million streams per album (somewhere around $2500 per million streams).

That’s just for one person to get by. If you sold digital copies of your album, you’d only need to sell 6,000 copies per album to make the same amount of money (around $7 per digital album sale).

I remember being really happy to pay $10 for an album, just ten short years ago. (Yeah, I was a little slow to get a streaming subscription.)

I guess something doesn’t make sense there though. The fact that these artists are there, still making new music, suggests to me that they are making it work one way or another. Maybe they just on average have other jobs. I feel that’s not obviously worse than them trying to make ends meet playing at bars.

Yeah—as consumers, it’s kind of invisible to us. When I buy something, the production is obscured by the whole distribution network between me and whoever produced it. When I watch a movie, I don’t know if the actors and stagehands were treated fairly or if they were worked to death. When I buy a diamond, I can’t just look at it and figure out whether it’s a blood diamond, a synthetic diamond, or something else.

That’s by design. The distributor benefits from this arrangement.

> The fact that these artists are there, still making new music, suggests to me that they are making it work one way or another.

We could say the same about, say, chickens laying eggs in factory farms.

I mean… is it though? Artists are not fungible like chickens. They’re people. They’re uniquely expressive people that can and do communicate with the public. And in my impression even the ones doing moderately ok as small niche bands seem to be generally thankful for their position. Do small bands with success on Spotify despair on their circumstances? I guess I just don’t feel that’s true. I know that they’re not rich, but I don’t think that you should be rich just because you got 100k monthly listeners.

> And in my impression even the ones doing moderately ok as small niche bands seem to be generally thankful for their position.

That doesn’t match my impression at all—where I’m sitting, I heard artists complaining about how they’re unable to recoup album production costs, and how going on tour has turned into a grind, or artists are even losing money going on tour. I’ve seen people make Twitter posts or YouTube videos talking about how they can’t afford to make music any more. I guess you haven’t seen those posts—I think a couple have gone by the HN front page, but you see them more elsewhere.

It’s not just about being rich—recording a small band could easily cost, say, $2,000 if you do it for super cheap. If you’re not making any money from your music, then your music turns into just another expensive hobby, and you need to spend more of your time doing some other job. Your music ends up competing with family, relaxation, relationships, and personal health.

I don’t understand where you’re getting this impression that musicians are fine, that they’re doing ok, because it is just so different from what I see. There are some musicians who have steady work or have enough draw to make money on tour or through streaming, but the rest of the artists are just getting squeezed out, and it seems like it’s getting worse every year.

It’s contingent on the fact that being a musician is a very difficult thing to do profitably intrinsically. It always has been. The question is whether it’s getting harder or easier; but it’s always going to be hard.

It seems impossible to square the fact that my listening is comprised of small acts who would never get mainstream radio time in a million years with the idea that it is harder to be a musician. What were those bands doing before, with, at best, a small local following? There’s just no way that the bands I like would reach me in the old days. How could a band have an easier time in a world where they have no exposure? How could harder dynamics result in a massive wave of more bands making music than ever before?

I’m not seeing this explained in your posts.

It’s easier than ever to make music and sell it on Spotify or elsewhere (especially without a label), which is a double edged sword: an artist is competing against everyone else who joined the talent pool.

Yeah—it’s also easier than ever to write an article and post it online, which is also a double-edged sword: journalists are competing against everyone else who joined the talent pool. Good reporting is basically dead compared to the 1990s, and professional musicians are getting squeezed out.

The majority of the recorded music revenue pie appears to go to a small group at the top of the pops, and I don’t think that has changed since the 90s. Perhaps the scraps are being fought over by a larger pool, but the demand for alternative music has never been higher, likely increasing the pie. Demand for good reporting seems to be non existent in comparison.

> It’s a lot harder to turn musical talent, productivity (writing & performing songs), and popularity into money than it used to be.

Nonsense. It's never been easier, and the change is so dramatic that it's an entirely different world than it used to be.

Anyone at all, alone, with no agent, label, production team, or any support whatsoever, can create and publish music and videos, for free, upload them to free hosting services, where they will live indefinitely and be available to a global audience on-demand. And if they're even a little popular, they can get paid. If they're really popular, they can get paid a lot.

Exactly when and how was it ever easier than this? Before, you needed an army of people and companies on your side, and had to be exceedingly popular to stand any chance of earning a penny. There were dozens of gatekeepers between artists and the fame and fortune they sought.

> Before, you needed an army of people and companies on your side, and had to be exceedingly popular to stand any chance of earning a penny.

Before, you could play to local audiences. You even stood a decent chance of making a living doing that, or maybe enough that you could do that and have a part-time job. Nowadays it’s a lot harder.

This is where a lot of our big stars came from, in the first place. Some were in cover bands, or played piano in local bars for small audiences.

It’s easier than ever to get popular, but harder than ever to earn money.

Got any numbers for this decline? Because intuitively, I would guess the opposite - Smaller acts would have it easier today to find an audience for their niche.