Focus was the founder Daniel Ek.
Mentioned the following
- He’s worth 4 billion dollars.
- Got rich selling music & doesn’t pay musicians.
- Was worth 4-5x what Paul McCartney is despite not being a musician.
Feel like there’s a lot of personal hate from musicians towards Spotify and they may deserve some defense.
First claim was they make money.
From that alone, a big voice popped up in my head going “stop”.
Spotify made 9 billion dollars in 2020, but wasn’t profitable at all.
They ran a loss of 664 million and have actually never been profitable, losing over a billion dollars in 2017.
2021 may be the first profitable year ever and the margin will only be a few million made on over 10 billion in revenue.
Spotify isn’t profitable and that’s due to them paying creators/staff.
Second is just how much creators make there.
In 2005, when downloads with MP3’s were king, the global revenue was 8 billion dollars a year.
Today, it’s 2.4 billion, but streaming revenue is 11.5 billion.
Meaning post inflation, the music industry is actually seeing more revenue now pre the rise of streaming.
Spotify is also the largest player in doing this and have made the revenue of the music industry bigger.
Three, basic numbers.
Spotify is bashed for the fact it’d take a creator 10.4 million streams a year for a person to make a years worth of a minimum wage job.
Something to think about with this though.
Spotify costs $10 a month.
The average American user will be on it 140 minutes a day.
That’s $0.02 a minute, for what they pay.
Spotify pays $4 per 1,000 streams on average, for $0.004 a stream.
Sounds sort of like a ripoff, but factor in the massive cost of labor on the tech side, marketing and many other investments to keep the business afloat.
This is ultimately a business where people are paying $10 a month to listen to literally thousands of songs every month.
Creators aren’t making a lot of money, because quite literally no one is.
And final thing, think of the gain.
Be a musician pre digital and here were the options.
- Have an uncle who worked at a record label. Sleeping with someone there was also an option.
- Be Eminem level good.
- Go on American Idol and get really far.
- Self publish CD’s and sell them for $1 to pity purchases on the street.
- Beg radio stations to play the song for free.
That was the music industry.
Today, it’s just produce and post. That’s it!
Smaller musicians are complaining about how little they make on Spotify, but not realizing they’d make NO MONEY pre Spotify. The vast majority of musicians were just a band at a local bar and a CD stockpile on a brief case.
Today, thousands of creators are complaining about how little they made off 5 million views, not realizing they’d not have 50,000 views 20 years ago.
For Spotify, I see them as unfairly talked about.
They’ve never been profitable.
They are in a low cost/low margin business.
They have grown music as a whole.
It is easier to be a musician now over any point in history and it’ll get better from here.