A report in the New York Times this week considers what Spotify pays artists for streaming their songs. From the Times:
"Spotify declined to comment on its rates, but according to a number of music executives who have negotiated with the company, it generally pays 0.5 to 0.7 cent a stream (or $5,000 to $7,000 per million plays) for its paid tier, and as much as 90 percent less for its free tier."
These payments may not be sustainable -- in the sense that it could be impossible to survive as a professional musician from such royalties alone -- but I think how the royalties are characterized above understates their value. After all, these are payments per play, which is a different measurement from payments per sale. In other words, how much are you paying per play when you buy a CD or download a $.99 song from iTunes?
As a very rough generalization, if I like something I'll listen to it at least ten times, and if I really like it, many, many more times. So instead of me buying a track for $.99, I might listen to it 30 times and thus send $.21 in royalties to an artist. Again, this doesn't mean that streaming royalties are sufficient, but they may not be much less than royalties from traditional sales.
All of this points toward new considerations of what makes for economically successful recordings. MP3s and iTunes have already broken the album, allowing for easy and inexpensive purchase of individual tracks. Streaming royalties can, on the one hand, reinforce this trend by rewarding tracks with mass appeal and high replay. On the other hand, when free to the listener (or as part of a subscription), listening to full albums may regain appeal. Artists and labels could benefit from this different economic orientation of listeners by stretching their attention across multiple tracks.
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