Analysis

A Genuine Freakshow manager Erik Nielsen weighs into Spotify payouts debate


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This week’s arguments about Spotify payouts to artists and independent labels were fuelled yesterday by a tweet from musician Jon Hopkins, who’s one half of King Creosote & Jon Hopkins. “Got paid £8 for 90,000 plays. Fuck spotify,” he wrote – a remark that has since been widely retweeted.

It’s a shocking ratio, but Music Ally has been contacted by Erik Nielsen, manager of UK act A Genuine Freakshow, who questioned whether Spotify is at fault in cases like this.

“I saw the Spotify row starting, so went into my sales figures for A Genuine Freakshow for October 2011. In short, we got paid £7.29 for 1,923 plays,” he says. “This is based on £10.24 gross income minus 85p mechanicals, minus £2.10 PIAS distribution fees. And this is based on worldwide Spotify plays.”

Why the difference then? How can A Genuine Freakshow get nearly as much from just under 2,000 plays on Spotify as Jon Hopkins got from 90,000? “We’re self-released, and are obviously doing a hell of a lot better for it,” says Nielsen. “It highlights the crippling terms of record contracts, not necessarily of poor payments from Spotify’s end.”

That’s a point made in a separate blog post by distributor Kudos Distribution about the payouts issue. “I have seen quite a few statistics that have puzzled me, with artists publishing what they have earned individually for streaming,” writes Kudos’ Danny Ryan. “When I query further, I discover that the artist in question is on a points deal with his record label,  in which he earns less than 10% of digital income.  This is an argument the artist needs to have with his label, not with streaming services.”

Ryan says that Kudos is earning a lot more money from Spotify every quarter than the figures published by another distributor, ST Holdings, in its own blog post earlier this week. “I suspect the key here is that we have been supplying Spotify since the service opened.  We (and our labels) have seen turnover grow exponentially over the past three years,” writes Ryan.

“Streaming services are very “long tail”. It takes time for consumers to discover your music, add it to playlists, favourite it, and share it with friends. The longer a label is on a streaming platform, the more established they become, and the more time users will have had to discover their music. Users need to dig deep and it also helps if labels market their playlists.”

The more artists and managers who are willing to share their figures, the better – transparency is going to be vital in this debate around streaming payouts. Nielsen’s figures do shed a new light on the debate, although the idea that self-releasing is the way to make better money from Spotify is unlikely to find favour with artists who are currently signed.

In a follow-up tweet, Hopkins added that “radio 1 pay about £50 for each play” – a comparison between streaming and radio that is being made by a number of other artists both privately and publicly.

There has already been a response to this, too, from Kieron Donoghue, founder of Sharemyplaylists. He makes it clear that he’s “a Spotify fan boy”, but has a valid point to make about streaming payouts versus radio payments.

“Jon seems aggrieved that he received £8 for 90,000 Spotify plays. However his mistake is to compare a Spotify play against a Radio 1 play. Radio 1 has approx 11,000,000 listeners so if you do the maths that’s 0.0000045p per listener. Spotify pays 0.000088p per stream (listener) according to Jon’s own figures above. So by Jon’s own maths, Spotify pays more.”

The key problem remains the ‘jam tomorrow’ issue though.The best argument in favour of streaming music services is that if they grow to have hundreds of millions of users, the payouts to artists will become much bigger, even at a very low per-stream rate. But if the number of artists pulling their catalogues or new albums off Spotify and its rivals, the chances of reaching that scale will be harmed.

Which isn’t to say artists should grit their teeth and stop complaining about low payouts. Spotify has been very successful in creating a consumer-friendly service and selling major labels on its merits. Now the company needs to engage more directly with artists and managers, addressing their concerns and making its pitch as a positive thing for their future.

Artists – not just the likes of Coldplay and Adele, but Jon Hopkins and his independent peers – are the lifeblood of the music industry. If they’re unhappy about the way it’s evolving, their concerns cannot go unaddressed.

Stuart Dredge

Read More: Analysis News
3 responses
  • will lines says:

    This is a fascinating debate and not simply a question of comparing numbers as they are not like for like. A stream is different to a “passive” radio listen is different to a purchase.

    One point of accuracy – Jon Hopkins is not one half of King Creosote, but rather a collaborator on the (rather wonderful) Diamond Mine lp.

  • stuartdredge says:

    Thanks Will, have altered the piece accordingly – that was my mistake!

  • […] downloading. That last point, however, has been knocked out of the park. Jon Hopkins may have been rather, um, unparliamentary in his language but the sentiment was clear – using music streaming services as a primary […]

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