Record Labels Keep 73% Of Spotify Premium Payouts

I'm shocked. I would never have imagined that the record labels would have transitioned their business model online :rolleyes:

Is it still the norm that an artist will pocket more money from a tour than their record contract? I remember reading about it years ago and it involved some fairly recognizable names at the time.
 
MrCaffeineX said:
I'm shocked. I would never have imagined that the record labels would have transitioned their business model online :rolleyes:

Is it still the norm that an artist will pocket more money from a tour than their record contract? I remember reading about it years ago and it involved some fairly recognizable names at the time.
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Yes pretty sure the model is true... where live events are the money makers for the artists. Though I think the really big names get a bigger chunk since they have bargaining power (when their contacts up at least). The new acts really get screwed.

Its funny though artists like Taylor Swift pulling their "art" from streaming due to not being paid enough... Sounds like they need to speak with their labels more so than the services... But since no one actually gives proper info in the publicity game its hard to tell if these artists are greedy or the victim as well.
 
Indeed, this is how it's always been.

Why people bother with having record companies nowadays when really you can do most of it yourself. Then once you've made a buzz and some money you can afford a good lawyer and negotiate a decent deal.

I remember David Bowie saying "In the rock business you don't need a manager, just a good lawyer!"

He should know.
 
I talked to members of Periphery about it at one of their shows last year and they said it's all about the merchandising. As far as I know record labels do not take a cut from that. I'd be interested to see what the cost of promotion is compared to the cost and revenue of putting on a tour is nowadays for a typical band.
 
seems higher/on par with the last 75 years of record/cd sales (1-10% profit per sale)
 
I think most if not all up and coming artist or even not up and coming should switch to a completely free model. Simply give your music away. If it gets popular then start making money off of live performances, merchandise, etc.... Things that you can better monetize. This would also have the side effect of really pushing online music services to compete.

When I think about what a record label does I cannot think of any reason the majority of artist would want to even use them. If you are already big you have no problem selling stuff and getting attention. If you are small the record label is unlikely to push your product unless you already have hit. And really that is what they are suppose to do, be the ones that push your name brand and get people who are more impressionable to listen and buy. So the only people who really benefit are the rare up and coming artist whom actually for whatever reason convince the record label to make a hard push and make a name for them.
 
The way for an artist to get around that sort of thing is not to sign contracts with the recording labels but to underwrite their own recordings and go to these services direct. But as has been pointed out, most artists voluntarily sign label contracts because they don't want to be bothered with all the behind-the-scenes administration and financing themselves--they just want to make music and get paid...;) Contracts with recording companies are always voluntary--of course--so why all this "Oh, look at the poor abused starving artists!" sentiment. The artists know exactly what they are doing when they sign such contracts--what the pie charts don't show is the expenses the labels underwrite *before* they pull out their percentages. If we could see those numbers the pie chart would look completely different.
 
Record labels have been ripoff artists for decades. Back in the 50s and early 60s, artists made 40-50% of the record costs, but the record labels found they could keep the artists on a flat rate while raising the prices for the records to the customers. It didn't take log for the record labels to begin getting tremendously rich while leaving pennies for the artists. Even the RIAA admits it.

https://www.techdirt.com/articles/20100712/23482610186.shtml

The funny part about this piece from the RIAA, they double charge the costs to make the record, cost of the tour, and many other things, showing it comes from the artist and from the record label, which is wrong. The artists pay to make their albums, videos, and tour support. They list the label getting $11 million from gross record sales, paying out $500,000 in manufacturing, $2.4 million in marketing, and $750,000 in royalties. So that leave them with $7.9 million in profits after a 3.65 million investment, and almost no work. The artists barely get anything, do all the work, and have to pay their money up front to get the new albums made.

Book publishers aren't any better. Most authors barely make 2% of the book sales, while the manufacturing costs are barely 1% of the cover price. While they do provide editor services to the author to help prevent certain mistakes authors are prone to make, they still make better than 95% profit from physical books. Their complaints on ebook costs are totally unjustified.

Self publishing through a service like Amazon or Apple is FAR better for any artist. I regularly read works from three authors who have gone that way, bypassing the old fashioned publisher model. Musicians should go through the same thing. Screw the publishing labels. They don't deserve the money.
 
I'm confused as to why record labels still exist. They don't actually seem to serve a purpose (other than as a cash sponge) anymore.
 
Quix said:
I'm confused as to why record labels still exist. They don't actually seem to serve a purpose (other than as a cash sponge) anymore.
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IMO, labels are like the mafia of the music industry. They get to decide who gets heard on major radio stations, MTV and all those stuff that could make an artist visible. So anyone who wants to be a huge hit will have to be associated with these labels, and give up their hard earned cash to them in the process. In return, they make an artist popular.
 
Big music is simply gonna die some day over this greed. May not be in my lifetime, but it's going to happen.

There will be a massive push to Indy stuff and local talent.

You've been learned...
 
Not if people get arrested for it. I know people think it's a stretch, and I sort of too... but Kim Dotcom's raid happened a bit after he announced his music website thing, right?
 
Quix said:
I'm confused as to why record labels still exist. They don't actually seem to serve a purpose (other than as a cash sponge) anymore.
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They exist because of what was mentioned above. The artist are too lazy or too dumb to do it on their own.
 
It used to be that musicians had to move to where LA or NYC or other music industry cities to get into the music industry, and they may not have even been in a band. They needed the labels to back them, produce them and promote them. Connections and cash meant everything, which the labels had...and bands didn't. Only bands that could afford a good lawyer could get better than a raw deal.
Now it can pretty much all be done from home over the internet; band members don't even have meet in person until their ready to start gigging. And with YouTube indie music sites and such, bands can generate free or nearly free publicity and sales. I'm thinking the hardest part would be booking and funding a tour, but I'm sure that could be worked out.
 
I dunno why end consumers should care about any B2B monetary transaction unless that person is also a company shareholder or has some other vested interest. I mean, whatever, if Spotify costs too much, don't use it. If it's affordable and something you want, do use it. Beyond that who even cares what happens behind the scenes?
 
And the lowest share go's to the actual artist.... to quote Mort the Jew from family guy "wow you guys have alot of talent but what you need is a manager someone with no talent who can take the lions share of your profit"
 
When an artist only gets $300 for 20 million plays, it isn't the record companies ripping them off, it is spotify.
 
daglesj said:
Indeed, this is how it's always been.

Why people bother with having record companies nowadays when really you can do most of it yourself. Then once you've made a buzz and some money you can afford a good lawyer and negotiate a decent deal.

I remember David Bowie saying "In the rock business you don't need a manager, just a good lawyer!"

He should know.
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Because people are lazy as fuck!

They would rather give 90% away to have someone else 'make them a star' then complain afterwards
 
Music artist are still being signed to huge contacts. The money coming in to cover those contracts are not from music sales. So yes the labels are going to be getting most of the money which they in turn use for their contracts.
 
Staples said:
When an artist only gets $300 for 20 million plays, it isn't the record companies ripping them off, it is spotify.
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I believe Spotify pays more per play than the radio does. I remember reading a breakdown of the numbers when Taylor Swift got pissed and pulled her music from them; her record company was making a killing, and she was pissed at them? Dumb.
 
They didn't drop the helicopters on Dotcom until he was about to launch his pay direct to artist streaming service.
 
Staples said:
When an artist only gets $300 for 20 million plays, it isn't spotify ripping them off, it is the artist and the record companies.
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Fixed that for you.

Not Spotify's fault if the artists contract puts 95% of what Spotify pays into the record company coffers. Its the artists own fault for signing the contract and the record companys greed.

She's another zero talent artist anyway imho. Just like 95% of whats being sold today. She should be on her knees thankful that enough people are dumb enough to pay anything for her so called "music".
 
$200 blue yeti pro + decent room to record in = ALL DA MONIES!

We seriously don't need recording studios when basic home tech + internet access is the easiest way to get exposure and earn far more money these days
 
As mentioned earlier. Record companies do have a large say in what goes on the radio waves.

Also most *Indi* music doesn't sound that great until a professional company tweaks it. Now this is getting much easier to do for the average person, however record companies have Professionals doing this. Professional promoters, advertisers, wheeler dealer types.

An artist generally isn't going to do well until he is "discovered". Many bands played for years until they were "discovered". They sound completely different.
 
mynamehere said:
It used to be that musicians had to move to where LA or NYC or other music industry cities to get into the music industry, and they may not have even been in a band. They needed the labels to back them, produce them and promote them. Connections and cash meant everything, which the labels had...and bands didn't. Only bands that could afford a good lawyer could get better than a raw deal.
Now it can pretty much all be done from home over the internet; band members don't even have meet in person until their ready to start gigging. And with YouTube indie music sites and such, bands can generate free or nearly free publicity and sales. I'm thinking the hardest part would be booking and funding a tour, but I'm sure that could be worked out.
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Well, get those independent artists to organize and get a channel up on SeriusXM Radio and then they have a terrific public venue to add to other internet outlets.

Truth is, the whole thing is just another twist or take on Unions.
 
Who listens to satellite radio? Its that free shit that comes in a car then you stop caring. Also organizing anything will never work for independent artists, you know why? because just like in any other system eventually someone will have power and that person will then begin abusing it. Pretty soon the organization will be no different than any other record label. Artist just need to learn how to be independent.
 
daglesj said:
Indeed, this is how it's always been.

Why people bother with having record companies nowadays when really you can do most of it yourself. Then once you've made a buzz and some money you can afford a good lawyer and negotiate a decent deal.

I remember David Bowie saying "In the rock business you don't need a manager, just a good lawyer!"

He should know.
Click to expand...

They do because you need the record label to make it in the first place most of the time. If you don't have someone influential mass marketing you music, you're not going to get very far. Think about how many garage bands you've heard in local bars that sound amazing but never get off the ground.
 
daglesj said:
Indeed, this is how it's always been.

Why people bother with having record companies nowadays when really you can do most of it yourself. Then once you've made a buzz and some money you can afford a good lawyer and negotiate a decent deal.

I remember David Bowie saying "In the rock business you don't need a manager, just a good lawyer!"

He should know.
Click to expand...

Problem is the Labels own the air waves, the radio stations and all that air time you need to get known is all owned by them, so they can just shut you out making it very hard to make it big.

But on that note, if you are truly talented you should be able to get noticed, just so much crap out there these days, everyone and their mothers thinks they can sing or dance..when really they cant!
 
MrGuvernment said:
Problem is the Labels own the air waves, the radio stations and all that air time you need to get known is all owned by them, so they can just shut you out making it very hard to make it big.
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Yep, payola. Music companies pay promotion companies to pay radio stations to play their music. So any musician who doesn't already have a lot of money isn't going to be able to get most stations to ever play their music.

The music companies are the worst thing to ever happen to music. They leech up most of the profits, and keep the independent musicians out of the market.
 
HockeyJon said:
They do because you need the record label to make it in the first place most of the time. If you don't have someone influential mass marketing you music, you're not going to get very far. Think about how many garage bands you've heard in local bars that sound amazing but never get off the ground.
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I disagree. I reckon you just need a good internet/social media guru that can push you out there on all the media thats not controlled by the usual suspects.

Broadcast radio and TV are not the prime exposure points anymore.

Who watches MTV or listens to the mainstream radio playing Journey over and over?

Thats not where it's happening.

Far more opportunities to make it big if you apply some brain power.
 
TwistedAegis said:
I believe Spotify pays more per play than the radio does. I remember reading a breakdown of the numbers when Taylor Swift got pissed and pulled her music from them; her record company was making a killing, and she was pissed at them? Dumb.
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Was quite the "opportunity" to have the number one selling artist at the time to say that they're pulling their music from streaming because they're not making enough money. Then the label will make even more money because people who want to listen (and aren't going to pirate) are gonna have to buy it then on a much higher margin revenue stream.

I've seen some really disgusting recording contracts, even management contracts. No sympathy for those devils here.
 
Armenius said:
I talked to members of Periphery about it at one of their shows last year and they said it's all about the merchandising. As far as I know record labels do not take a cut from that. I'd be interested to see what the cost of promotion is compared to the cost and revenue of putting on a tour is nowadays for a typical band.
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hmmm.. Im going to the carolina rebellion in may, and periphery is playing.. Havent heard them yet, what albums and/or songs you recommend? thanks in advance
 
I've been saying this crap for YEARS! Stop blaming the service when you read these articles about artists getting cents or fractions of a cent per play. It's all based upon a contract that has been agreed upon in their behalf!
 
TwistedAegis said:
I believe Spotify pays more per play than the radio does. I remember reading a breakdown of the numbers when Taylor Swift got pissed and pulled her music from them; her record company was making a killing, and she was pissed at them? Dumb.
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I heard something a few weeks ago about Spotify indicating that their rates were a few dozen dollars per million plays. I did some looking around and couldn't find this article. I did however find what you said, Spotify royalties are greater than radio. I stand corrected.

As to the article, I remember artists saying that they got a few pennies per CD sold. If that was the case, then this is a better deal and I don't see why anyone should complain.
 
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