For many members searching for jobs in the music industry, each little bit of income helps, and streaming seemed to offer hope of another revenue source to help make a living from music. However, Spotify, the streaming application that is immensely popular in Europe (and due to launch in the US soon, has come under fire along with the performing rights societies about the minuscule amount that artists actually receive.

Hypebot recently reported that Spotify paid Lady Gaga just $167 For 1M Plays:
Lady Gaga’s “Poker Face” was one of the most popular tracks for 5 months on Spotify; being played more than 1 million times. But according to reports this weekend, the Swedish Performing Rights Society only paid her $167. If true, it confirms other complaints from other artists like those of Swedish musican Magnus Uggla who pulled his music off Spotify declaring, “I’d prefer to be raped by Pirate Bay than played on Spotify”.

When an artist starts out with earning no income from their music, they are quite happy to give it away for the exposure it may create. Obviously it is easier for a small band to offer a free mp3 and say “we may have lost a potential $1000 in order to gain some new fans”, than it would be for Universal to do it with a Lady Gaga single and consider losing (potentially) a lot more.

However, the idea of exposure still remains. Streaming can be a way for people to try out new artists without committing to a $15 album (of which, Universal made many, many terrible ones). There are already reports saying that streaming is drawing consumers away from P2P sites, and with the Pirate Bay trial and Joel Tenebaum ruling gaining so much press this year, some users will be scared off using such sites in the future. The Pandoras, Spotifys and LastFMs of the new music industry are an essential part of artist promotion in my opinion, and so I would consider pulling your music away from them is a foolish move.

As there is no way to measure the direct income derived from a person who streams two tracks, then goes to buy them from iTunes, and then pays $40 to see the artist in concert, it can be hard to judge.

I would stick my neck out and say that it helps though.

We’d love to hear your response on this – comments around the Music Jobs office range from outrage at the royalty rates for artists to “that’s about $166 too much”! Feel free to comment below.

Lee Jarvis

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The music streaming app that is currently taking the UK and Europe by storm is looking to set-up in the US in the very near future. (This may well help create music industry jobs in the USA, so keep checking the Jobs Board!)

Founded by two Swedish entrepreneurs, Spotify has over six million tracks available to stream, and gives users the ability to create, save and share playlists, offering greater interaction and discovery. They are working with US music publishers and labels to evolve a deal to enable them to offer the same service here. Having dealt with many of the key companies regarding European licenses, it’s a very real possibility that they will be operating here soon.

The relatively new start-up (October ’08) is hoping to launch it’s desktop application in the US by the end of this year. However, even greater potential could be reached if they are approved as an iPhone app. The issue there? It could be so good as to make Apple’s iTunes virtually redundant to millions of music consumers.

Spotify derives revenue from a number of audio commercials during playback (current EU advertisers include Nike, Ikea, H&M and more), or a monthly fee for a premium service with no commercials, greater audio quality and extra premium-only content. The monthly fee is currently £9.99 in the UK (approx $15), and word is that the mobile app would only be available to those who subscribe to this.

People are becoming excited about the possibility of a real contender to iTunes, and as a fan of aiding music discovery, I really hope that Spotify will push forward with the licensing deals. They provide a great service, and user word-of-mouth will ensure a global success.

Lee Jarvis.

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