Business Category Archive

Music Royalties and Spotify

3 Replies Jonny Hankins

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.

Global Information Technology report 2013

3 Replies Jonny Hankins

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.

Aquaculture – mankind’s future?

10 Replies DomesticApe

A photograph of a fishery at sunsetAs the world’s fisheries come under ever increasing demand and pressure, many companies and countries around the world are turning to aquaculture, the farming of fish, crustaceans, aquatic plants, and shellfish. But is this method of producing food the “green” answer it is often claimed to be?

Aquaculture is not a new concept by any means, there is evidence that suggests the farming of aquatic life was taking place as early as 6000bc on what could be called a commercial scale.

The modern age has mechanised, computerised, and scaled up this concept of food production into one of truly immense proportions. South America alone produces over a startling one million metric tons of farmed salmon per year, with methods some have described as unsustainable.

Globally, aquaculture has been a very erratic business in the last 40 years, with major outbreaks of disease wiping out hundreds of thousands of tons of fish at a time, and poor practices responsible for localised environmental changes, and pollution on a large scale.

A huge steel or plastic floating structure, anchored in place and powered by massive diesel generators has become the standard sea farm with what is described as a “footprint” devoid of life beneath it, that may extend some distance depending on local currents and conditions.

Fish being caught in Te Pangu BayIs this what Jacques Yves Cousteau envisioned when he made the following famous quote?

“We must plant the sea and herd its animals using the sea as farmers instead of hunters. That is what civilization is all about – farming replacing hunting.”

But then, if one considers the reality of the world we live in, where violent conflict is an everyday occurrence, populations continue to grow and people go hungry …… then I think aquaculture is a step in the right direction.

Aquaculture in New ZealandIt could be argued that most aquacultural products demand a premium and in many countries are beyond the means of the average consumer. And this would be quite correct in many cases, but may in some part be off-set by the direct benefits to the local economy through job creation and a direct boost to the local economy.

The single greatest benefit aquaculture is receiving at the moment is technology. Automated systems deliver pellets to fish in a highly measured manner and consumption is monitored in points of a percentage. Geneticists are carrying out selective breeding programs so only the most efficient of stock are sent to sea and environmental monitoring is carried out using an array of high tech sensors and systems.

Water quality tests and histologies are carried out on site and the training requirements of staff are increasing exponentially in order to keep up. Thousands of scientists are busy scuttling about, working day and night on improving “feed conversion ratios” or the amount of feed in kilograms it takes to grow a kilogram of product.

Swimming fishSomething that possibly started out as an art form has become a science.

New Zealand fisheryWith increased use of technology, coupled with a strong social conscience, aquaculture just may be the answer to many of the world’s problems, which it could be argued are largely driven by increasing population and dwindling resources.

As long as mankind uses this tool as a farmer and not the hunter we have descended from, then I see aquaculture playing a very strong role in mankind’s future.