Music Royalties and Spotify

The BBC World website is reporting that Thom Yorke, the singer from Radiohead, has pulled some of his music off Spotify and Rdio because he says that their royalty payments are too low.

To be exact he tweets:

%CODETWEETTB7%

Radiohead are not new to this type of provocation however. In 2007 they released an album “In Rainbow” that could be downloaded only from their website. The interesting line was that the listener could pay whatever they wanted for the download, there was no fixed price.

They came in for a lot of criticism as this article in the NME shows, with some people claiming they were making it more difficult for new bands to make any money from their releases.

Well Thom does not agree. The album was “bought’ 3 million times in its first year of release and Yorke himself says that the band made more money from this one album than all of the others put together.

So this leads to the obvious question about Spotify, how much do they pay?

Busking pays more than Spotify

Busking pays more than Spotify

As a musician myself I have a good knowledge of how the payment systems worked in the days before digital downloads. When my band released albums or singles and we received radio play we were paid. In the UK about 15 years ago an artist was paid about $30 a minute for a play on national radio. This means about $90 to $100 for a song, minus the 20% that the PRS take for collecting it and distribution. It’s good money. One single that gets 10 plays on John Peel or other fringe shows could make $1000, enough to make another.

Now Spotify is different of course because a play is personal, not to an entire country. This article on the Music Think Tank blog explains how royalties are worked out, but I will try to explain here as simply as I can.

Spotify make money from advertising and subscriptions. They pay 70% of their income out in royalties for the music they play. They pay out pro-rata, so if 1% of all streams happen to be your music, you get 1% of that total payment. Simple enough (maybe).

So lets look at the numbers.

In 2011 Spotify generated $20,333,333 per month.

They distributed 70% which is $14,233,333.

They had 1,083,333,333.333333 streams per month.

Let’s say I got 20 streams a month, about 0.00000184615% of the total royalties payout.

I make $0.26 a month, that is 26 cents. $0.01 per stream, minus the 15% that the digital distribution company takes for putting the tracks up and the 10.2% publishing fee.

About a quarter of a cent per play, in round terms, anyway not a lot of money by anyone’s standards.

Of course the more people use Spotify, the less an individual stream is worth.

In the US Pandora, another streaming site is pushing Congress into passing legislation that will cut this rate further, by 85%.

Even Pink Floyd have been complaining that artists are being duped.

I for one keep making music and releasing it to the world, I don’t expect to get rich though!

UPDATE: This week the BBC has a follow up article about Thom and Spotify. Check it out here.

UPDATE: Spotify has now revealed it pays artists $0.007 per stream. That’s a lot less that previously thought.

Asleep at the Wheel?

Anyone who has ever driven a long distance will know the feeling of “zoning out”. You lose focus on the road, staring blankly in front of you, your reaction time lengthens, and sometimes people even fall asleep.

In the UK it is estimated that about 20% of accidents are caused by people nodding off at the wheel, but a breakthrough at the University of Leicester might help to put an end to this problem.

Researchers have been working on a system that combines high speed eye tracking and EEG technology, with one application being to alert drivers who show signs of drowsiness.

These forms of technology have traditionally been difficult to marry together, EEG use has been around for decades and any epileptic person will have had experience of it. The EEG system involves wearing a kind of cap with electrodes attached that measure neurone activity in the brain. Once a cumbersome affair this can now be carried out using a lightweight headset, a far cry from the rubber cap manually fitted with sensors and cables that I grew up with.

A contemporary EEG Underway

A contemporary EEG

The eye monitoring technology involves infra red cameras measuring how LED light reflects from the user’s eyes, monitoring where the user is looking, how often they blink and other signs of distraction and sleepiness.

The researchers at Leicester have made the breakthrough of devising a way to use these different measurements together, something that has not been possible in the past.

Applications go much further than saving lives however. The developers point to uses for people who cannot use their arms, as they could control machinery using their eyes and thoughts. Even more importantly for some, the technology could be used to control video games, so that a player would no longer have to use a console of any sort but could communicate through measuring where their eyes were looking and the patterns in their brains.

More information is available here.

Global Information Technology report 2013

The World Economic Forum recently released its Global Information Technology Report 2013, and in this post I would like to have a quick look at it.

It is a long document, so I will just try to take a few highlights to give an idea of the findings.

The report has a Network Readiness Index that aims to measure how prepared countries are to adopt and make the most of new technology. Factors such as investment in broadband and other telecommunications fields obviously enter, but so does the quality of the education system and regulatory powers.

Finland leads the world in embracing technology, followed by Singapore and Sweden. The UK is in 7th place, the USA in 9th and my present home Italy is well down at number 50.

World Economic Forum

The Nordic countries and the so-called Asian Tigers – Singapore, Taiwan (China), South Korea and Hong Kong SAR – dominate this year’s index thanks to their business-friendly approach, highly skilled populations and investments in infrastructure, among other strengths. Finland, which arguably has one of the best educational systems in the world, stands out as a digital innovation hub.

Southern Europe shows a massive lag in fact with the North, and this is a major problem.

The positioning is not only important for so called ‘techies’, but really important for the economy as a whole, and here in Italy (and in Southern Europe on the whole) we are in serious need of economic improvement.

Latin America, the Caribbean and sub-Saharan Africa also suffer from a serious lag despite infrastructure improvements, an expansion of coverage and a push into e-government. Weaknesses in the political and regulatory environment, the existence of large segments of the population with a low skills base and poor development of the innovation system are all factors hindering Latin America’s technological potential. In sub-Saharan Africa, costly access to technology, a low skills base and unfavourable business conditions are among the chief obstacles.

The report demonstrates that economic growth and technological readiness are tightly linked.

Top 10 countries for Network Rediness 2013/2012

A look at the top 10

An analysis by Booz & Company has found that ICT could help lift millions out of poverty.

Digitization has boosted world economic output by US$ 193 billion over the past two years and created 6 million jobs during that period, according to the study. Using a Digitization Index that ranks countries on a scale from zero to 100, Booz & Company found that an increase of 10% in a country’s digitization score fuels a 0.75% growth in its GDP per capita. That same 10% boost in digitization leads to a 1.02% drop in a state’s unemployment rate.

If emerging markets could double the Digitization Index score for their poorest citizens over the next 10 years, the result would be a global US$ 4.4 trillion gain in nominal GDP, according to the study. It would generate an extra US$ 930 billion in the cumulative household income for the poorest, and 64 million new jobs for today’s socially and economically most marginal groups. This would enable 580 million people to climb above the poverty line.

So investment is this area is extremely important, but in many places falling profits due to economic downturn (as is the case in Southern Europe and to some extent the USA) mean that less money is available, and this effects future growth scenarios.

Interestingly 3G growth is more important than general mobile telecommunication growth, we really do live in an information society that is based on Internet connectivity.

Medical care is also another area where benefits are net and easy to measure.

Southern Europe is in a particularly precarious position due to lack of investment capability. Rwanda on the other hand is following many other African countries in investing in expanding its fibre optic network and hopes to become a banking and finance hub, moving to being a knowledge based economy and away from agrarian in the next 7 years.

Colombia, Uruguay and Panama have become champions of e-government and connectivity. In Colombia, Internet connections have tripled to 6.2 million in the last 2.5 years. In Uruguay, small and medium-sized tech enterprises helped lift technology exports from US$ 50 million in 2000 to US$ 225 million in 2010.

Here in Italy there is little investment and a distinct lack in centralized planning, so we will soon be slipping below these countries on the scale and continue to suffer the related threats on economic development that this situation provokes.

The report is free to download here. It is as I said long and detailed, but the rankings are in chapter 1 if you just want to see where your own country sits.