The music industry is by far one of the most profitable business to be a part of…providing you're a big time artist or a member of a successfully commercial band. Otherwise, it's an extremely tough way to try and earn a living.
In a world where it can be so easy to learn an instrument and find other like minded to write music with, why is it so hard to reap some benefits from your hard work? Read on to find out the true cost of music.
Spotify
Spotify is the one of the biggest music streaming services around at the moment, so surely you'd expect all the worlds biggest artists to be partnered with them? Well if you do, you'd be wrong.
Spotify has shared its fair amount of controversy regarding artists such as Taylor Swift and Thom Yorke (Radiohead) both withdrawing their respective back catalogues of music from the site. “But why would they do this?” you may ask. The answer is simple. Money and revenue.
Now it may seem a little finicky that these two very successful musicians are throwing the toys out the pram over money, but, as Thom Yorke tweeted regarding the issue, they did it as a opportunity to “standing up for our fellow musicians”. And this does make sense.
Spotify ultimately makes its money through advertising and paid subscribers, and ends up paying its featured artists roughly 70% of that revenue in relation to the number of streams of their songs. So if an artists song account to 10% of the total number of streams on Spotify, the artist will earn 10% of the 70% revenue.
This may seem like a good deal to artists who know the public will stream their songs, however smaller artists become victim to Spotify's algorithm, causing them to be drastically underpaid at essentially £0.007 per play.
Looking at it from this angle, it becomes seemingly pointless to even try to generate a profit from Spotify unless you've already made it big.
iTunes
iTunes is the granddad of all digital music, being every Apple product owners go to site to download their favourite songs. The iTunes library is just as large as Spotify's, perhaps even bigger, however iTunes lets user buy and keep songs as opposed to streaming them, and is free to use.
In terms of how iTunes benefits artists, anyone can upload their music, as long as it fits all the criteria of the site, which is easier than getting your songs on Spotify to begin with.
Artists earn, for example, 10p from every 99p song sold from iTunes, which may seem like a relatively small cut until you put in to perspective that it would take around 64 Spotify streams of the song to make the same amount.
Judging by how hard it is for smaller artists to get streams on Spotify, iTunes seems to be the better option for generating profit from music, as it is a more stable source of income from your songs, regardless of the 10p cut, because your uploaded content will always be there to purchase.
Growing Pains
Despite iTunes being a better choice if you wanted to profit from your music right now, in the long run, that, that might not exactly be the case.
As stated before, it would take around 64 Spotify streams of the song to make the same amount as one sale on iTunes does. But once the a song is streamed for a 65th time, it begins to generate the artist more profit than the iTunes sale did.
Once a song is sold on iTunes, it cannot make the artist any more money than that 10p out of 99p, whereas the song can be streamed an unlimited amount of times on Spotify, ultimately boiling down to unlimited profit.
Another factor to consider is that Spotify is still a growing service, meaning that in the future, the rates at which artists are paid could be increased, meaning a song would have to be played less to generate the same income as an iTunes sale.
When and if that day comes, I believe that Spotify will become a good way of artists establishing themselves and generating profit from their efforts.
Music To My Ears
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If your thirst for musical content hasn't been quenched, take at look at our Sounds Historical piece to really reminisce about how we used to listen to music.
