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.

Nanotechnology Lecture Invitation

On Tuesday I am participating in a lecture about nanotechnology at the Bocconi University in Milan.

Nanotechnology Lecture Poster

Nanotechnology Lecture Poster

This is not a subject that is new to this website as a quick search demonstrates. In May of 2011 Hayley asked the question of whether nanotechnology research is safe. It is a well written and commented post that raises some critical questions about the ethics and practices surrounding technology that is already changing our lives and has incredible potential in many walks of life.

Hayley continued her thread in January of this year with an article about nanobots, the future of nanotechnology. Here she describes the bottom up approach that the technology is taking on, underlining the importance of self replication.

In March I followed up on these articles with a post about how nanotechnology procedures are regulated, based upon the National Research Council’s report of the same month. Many similar issues are raised in the report about environmental damage, possible risks to health and governance.

On a lighter note in April I posted about nano-art and again in May about how nanotechnology is making waterproof electronics a reality.

So all of this leads me on to Tuesday’s lecture. The main speaker is Michael Bruch, the Head of R&D and Risk Consulting at Allianz Global Corporate (the insurance company). He is going to talk about the role of insurance in innovative technologies, with a focus upon nanotechnology.

If we read the articles linked above we understand that this research is fraught with risk, and so development companies have to take out insurance against losses, but how can the level of risk be calculated with such an unknown and potentially powerful product? What might the implications be for the global financial system if something goes catastrophically wrong?

Well if anybody can tell you Mr Bruch can.

The proceedings will be streamed live through the Bassetti Foundation website, but I am travelling half way round the world to be there in person. It will also be available later on podcast, and I think will be a very interesting debate.

I will let you know next week how it all goes. Invitation enclosed.