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200+ Labels Withdraw Their Music From Spotify: Are Its Fortunes Unravelling?

50 points by glymor 15y ago

AndrewDucker 15y ago
I'd love to know whether Spotify was generally causing an increase or a decrease in the amount spent on music. I'm currently spending £120/year on music that I wasn't spending before, but I'm aware that I might not be normal.
- waterlesscloud 15y ago
  What matters is how much of that spending is making it back to the rights holders. Is that amount increased or decreased via spotify?
  - AndrewDucker 15y ago
    My understanding is that it pays a similar amount to airplay - and that if I want a band to make the same amount they would have made from me buying their album then I need to listen to it about 100 times. Which, for albums I love, tends to happen. Rubbish albums full of fillers, on the other hand...
    - nagoff 15y ago
      It all depends on how big a label they're with and so what terms they get from spotify but it looks more like 2000 (track) plays = ~200 full plays of an album in the best case scenario and perhaps as bad as 100,000 track plays in the worst case.Part of the problem is that its essentially impossible to tell from the outside which is which. http://musically.com/2011/11/18/a-genuine-freakshow-manager-erik-nielsen-weighs-into-spotify-payouts-debate/ http://musically.com/2011/11/18/a-genuine-freakshow-manager-...
      - waterlesscloud 15y ago
        This was the key point of that post to me- “Streaming services are very “long tail”. It takes time for consumers to discover your music, add it to playlists, favourite it, and share it with friends. The longer a label is on a streaming platform, the more established they become, and the more time users will have had to discover their music. Users need to dig deep and it also helps if labels market their playlists.”
  - AndrewDucker 15y ago
    Some good figures here: http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-earn-from-each-music-platform-uniform-notion-shares-the-numbers.html http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-...
    - w0utert 15y ago
      Keep in mind that comparisons like this don't take into account that streaming services like Spotify attract a lot of users who would not have spent a dime on music distributed in any other way, so they are effectively useless to compare revenue streams. They are a bit like equating every pirated song to a lost sale. Myself, I'm just like the guy above me, I literally spent $0 on music for over a decade, until I got a Spotify Premium account about a year ago. I think there are many others like me.
      - alexhawket 15y ago
        Services like Spotify and Netflix are marginal cost services. Their intent is to monetize the previously non-paying customers like yourself at unheard of low prices. However, it's not all gravy. Marginal cost services cannibalize a portion of the existing market. The degree to which this happens depends on the popularity of the service. It may a small percentage or in the extreme, every customer. If Spotify remains relatively small and is kept in check, then it will likely be a net benefit to artists and labels as it costs them little to participate. However, it's also a disruptive innovation at a radically lower price point. If the lion's share of the music market were to switch to Spotify or a similar service, the drop in revenues would not sustain the market since great content is labour intensive and expensive.
  - maxjaderberg 15y ago
    This is a good infographic on that http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music...
  - gizzlon 15y ago
    "What matters is how much of that spending is making it back to the rights holders." Rights holders or artists? It's not like the artists receive a lot for each CD sale. I'm not saying the music industry can't provide a valuable service, but if there where any real competition they would be out of business a long time ago. IMHO, it might be better for "music" if they all went bust.
- gizzlon 15y ago
  I have been a premium subscriber for about a year, and for me it has gone up. I buy even less music now.. but I spend more on music.
- matwood 15y ago
  I'm the same as you. I occasionally bought an album from the Amazon $5 deals, but even then I would often fill my cart, not feel it's worth it and then skip buying. With spotify $10/month feels like a good deal for a good product. If labels want to pull all their music then I'll go back to listening to my catalog of stuff I already own and not spending money at all.
- freehunter 15y ago
  I don't use Spotify, I use Zune Pass (it was available in the US long before Spotify was), but when I got a Zune, I moved from pirating _everything_ to never pirating music. I've been a Zune Pass subscriber for three years now and have discovered tons of new music I hadn't heard before. On some artists I've found I'll go out and buy the album on vinyl so I have it at home but that's a very rare occurrence. Just an anecdote from some random guy on the Internet, but when done right and with good integration, music subscriptions can be a great thing for the user _and_ the industry.
- ticks 15y ago
  Only music I have bought in recent years is bands that aren't on the streaming services, like RHCP or Metallica. As a user these streaming services are a nice free alternative to buying music, but if I were a band with a well known brand (i.e. lots of money has been pumped into it over years/decades), then I would avoid streaming services like the plague. Services like emusic are better for labels because they at least treat the music as something special and limited.
waterlesscloud 15y ago
I have a strong suspicion that these particular "labels" mostly have 1 artist on them.
- JonnieCache 15y ago
  This is not the case. They are admittedly all UK-based underground electronic music labels, so perhaps not the end of the world for spotify, but it isn't something they can ignore. STholdings has been a successful distributer for many years, it underpins the UK scene. Others are sure to be watching.
  - jopt 15y ago
    If anything, it's more worrying for Spotify that these labels are all closely related by genre. This leaves a gaping hole in that specific genre, which is harder to ignore than a few artists here or there.
    - marvin 15y ago
      InsideOut (the biggest progressive rock/metal label) removed all their music from Spotify about a year ago. This would have been a dealbreaker for me when I started my Spotify subscription, but now I almost can't be bothered to switch...switching would mean exporting my 200 playlists to the next sertive.
      - AndrewDucker 15y ago
        Same here. I lost Frost* from my playlists, but frankly there' so much other music to listen to that I'm not missing them.
        zokier 15y ago
        That's one scary aspect of music services such as Spotify. They twist our listening behavior with selective offerings.
      - 15y ago
JonnieCache 15y ago
When I read this I was not expecting it to be STholdings! That's about half of my favorite new music right there. Glad I didn't buy a subscription now.
mvkel 15y ago
Oof. The sole reason I have a Spotify subscription is for its vast dubstep catalog. Checking out my "favorites" playlist today, I hope I don't see half of them gone!
- mvkel 15y ago
  Yep. Lots of stuff gone. Joker, Mount Kimbie, Luke Vibert, Distance. Huge names, gone. This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can. It has nothing to do with Spotify remaining solvent.
  - gcp 15y ago
    This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can. Without a middleman, it's going to be a pain to subscribe to multiple labels. It would require vast improvements in protocols/infrastructure in an industry that's extremely slow moving.
    - icebraining 15y ago
      Billing would probably the hardest part - customers won't want to pay different values each month depending on the labels the music they listened to happened to belong, in my opinion. They (We) want flat, predicable bills, and that involves having a middleman acting as a "financial buffer", which charges the same to every client but pays different values to each label.
  - matwood 15y ago
    Unless you are dealing with the artist directly, you are always dealing with a middle man. Make no mistake, the current distributors would love nothing more than the ability to cancel rights on any music you already think you own. There is some exec right now looking at video games that phone home before each play and thinking he wants to make that work with the music his company distributes.
philwelch 15y ago
"because it turns a service that has everything into a service that has “most stuff”" Spotify already was a service that has "most stuff"--it was never a challenge to find holes in their catalog. And judging from the ads that the free version of Spotify plays for me, either their entire userbase is really into country, or their advertising is more intended to badger me into buying a subscription so albums I actually like aren't interrupted by country music every 2-3 tracks.
- nicwest 15y ago
  ... has “most stuff” — that’s a life-and-death difference to a hardcore music fan as you say, spotify's lacking catalogue is not news. I would be interested to know however if hardcore music fan's makes up the majority (or a significant minority) of spotify's user base. As such is this truely a life-and-death difference to spotify as a whole.
mbesto 15y ago
Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity. Interesting quote. Is music production being exploited as a low value commodity, or is it in reality a low-value commodity? With the insane amount of music that is available I personally feel like it's the latter, and the reverse exploitation of publishers/distributors has gone on for too long.
- JonnieCache 15y ago
  The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. This will strongly affect their decisions about selling/marketing it, in ways that will likely appear irrational in the light of cold economic analysis. Those who manage to understand this "passion" factor and work it correctly into their business models are the ones that will make the post-piracy music industry work for them. A simple example of this is the sale of super-deluxe limited edition box set versions of albums for $200 which we've been seeing over the last couple of years.
  - dpark 15y ago
    >The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. Passion doesn't change the economic facts. Painters pour their hearts and souls into their works as well. That doesn't mean that they can realistically sell at a high price. Most painters are broke, and most of the art people own are cheap reproductions from places like Pier 1 or Art.com. And most people still own relatively few reproductions. The question for musicians should be how can they maximize revenue, not price. Unless they want to live in a world where albums are purchased liked paintings: rarely and only by a small market.
    - JonnieCache 15y ago
      >Passion doesn't change the economic facts. Nope, but it will change economic behaviour.
gcp 15y ago
This is a gamble that can turn both ways; what these labels/artists now risk is that they basically no longer exist, or are no longer discoverable, for a large portion of listeners.
- rdtsc 15y ago
  The could also be thinking of building an in-house product similar to Spotify. Every label is probably thinking, "we can pay some web dev to build us this". Well, I hope they all do and see what happens.
waldr 15y ago
I wonder how many new fans those artists got from being on spotify, how many people then paid to see them live and recommended them to their friends. It's difficult to put a price on that.
cjstewart88 15y ago
IMO Spotify is overrated, www.tubalr.com is where its at.
bookwormAT 15y ago
If more gaps in Spotify's library really makes people purchase albums again? I know it makes me switch to Grooveshark.
akmiller 15y ago
more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio. Somewhat sensationalist headline trying to make it sound like it's Spotify that's losing these labels when in reality it's the labels opting out of ALL subscription based music services. Not to say that it's not a huge problem but there is no need to single out Spotify in the title.
- betterth 15y ago
  Also, it's a bunch of small time techno labels, and not a single major label is a part of the enormous sounding "200 labels".
eyko 15y ago
Scumbag STHoldings. Withdraws music from Spotify. Available in Soundcloud.
- JonnieCache 15y ago
  They only publish clips to soundcloud. Also, it's their music, they can do whatever they want with it.
ssharp 15y ago
If someone is going to solve the music problem, the business model should be as focused on addressing the concerns of labels and artists as it is on consumers. If the middleman is making customers happy, and artist/labels feel like their getting an equitable fee, lock-in will happen and it will become a strategic disadvantage to leave. It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. If we only look at the consumer end, we're bound to end up with lots of models that don't interest labels and artists, and ultimately will not satisfy customers either. If the ultimate destination is a world where we largely marginalize labels (which seems to be something a lot of people advocate as it will push costs down), then does Spotify get us any closer to that goal? Not as it stands now.
- JonLim 15y ago
  > It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. I think the gaming industry is good proof that this DOES work. Steam (and Gabe Newell) basically came out to say that making it super easy and convenient for customers basically made it easier to purchase from Steam rather than pirate. (Myself included.) The consumer end, especially for media like music or gaming, is probably the most important for business considerations, in my opinion.
fauldsh 15y ago
This is truly the big problem with Spotify. They're completely at the mercy of the big labels/distributors, who aren't receiving enough money for Spotify to matter to them that much. Whereas Spotify completely cannot afford for labels to pull their music. The problem is beyond sheer numbers of subscribers as well, Spotify needs people to listen to less, so that the money generated per song play increases and makes them a more attractive distribution medium. Radio stations do this by having DJ's talk lots between songs and varying the popularity of the songs they play, so they don't play too many new and expensive songs. The only tool Spotify has to alter the revenue per song play is changing the subscription price.

50 points by glymor 15y ago

I'd love to know whether Spotify was generally causing an increase or a decrease in the amount spent on music. I'm currently spending £120/year on music that I wasn't spending before, but I'm aware that I might not be normal.

waterlesscloud 15y ago
What matters is how much of that spending is making it back to the rights holders. Is that amount increased or decreased via spotify?
- AndrewDucker 15y ago
  My understanding is that it pays a similar amount to airplay - and that if I want a band to make the same amount they would have made from me buying their album then I need to listen to it about 100 times. Which, for albums I love, tends to happen. Rubbish albums full of fillers, on the other hand...
  - nagoff 15y ago
    It all depends on how big a label they're with and so what terms they get from spotify but it looks more like 2000 (track) plays = ~200 full plays of an album in the best case scenario and perhaps as bad as 100,000 track plays in the worst case.Part of the problem is that its essentially impossible to tell from the outside which is which. http://musically.com/2011/11/18/a-genuine-freakshow-manager-erik-nielsen-weighs-into-spotify-payouts-debate/ http://musically.com/2011/11/18/a-genuine-freakshow-manager-...
    - waterlesscloud 15y ago
      This was the key point of that post to me- “Streaming services are very “long tail”. It takes time for consumers to discover your music, add it to playlists, favourite it, and share it with friends. The longer a label is on a streaming platform, the more established they become, and the more time users will have had to discover their music. Users need to dig deep and it also helps if labels market their playlists.”
- AndrewDucker 15y ago
  Some good figures here: http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-earn-from-each-music-platform-uniform-notion-shares-the-numbers.html http://www.hypebot.com/hypebot/2011/09/how-much-does-a-band-...
  - w0utert 15y ago
    Keep in mind that comparisons like this don't take into account that streaming services like Spotify attract a lot of users who would not have spent a dime on music distributed in any other way, so they are effectively useless to compare revenue streams. They are a bit like equating every pirated song to a lost sale. Myself, I'm just like the guy above me, I literally spent $0 on music for over a decade, until I got a Spotify Premium account about a year ago. I think there are many others like me.
    - alexhawket 15y ago
      Services like Spotify and Netflix are marginal cost services. Their intent is to monetize the previously non-paying customers like yourself at unheard of low prices. However, it's not all gravy. Marginal cost services cannibalize a portion of the existing market. The degree to which this happens depends on the popularity of the service. It may a small percentage or in the extreme, every customer. If Spotify remains relatively small and is kept in check, then it will likely be a net benefit to artists and labels as it costs them little to participate. However, it's also a disruptive innovation at a radically lower price point. If the lion's share of the music market were to switch to Spotify or a similar service, the drop in revenues would not sustain the market since great content is labour intensive and expensive.
- maxjaderberg 15y ago
  This is a good infographic on that http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/ http://www.informationisbeautiful.net/2010/how-much-do-music...
- gizzlon 15y ago
  "What matters is how much of that spending is making it back to the rights holders." Rights holders or artists? It's not like the artists receive a lot for each CD sale. I'm not saying the music industry can't provide a valuable service, but if there where any real competition they would be out of business a long time ago. IMHO, it might be better for "music" if they all went bust.
gizzlon 15y ago
I have been a premium subscriber for about a year, and for me it has gone up. I buy even less music now.. but I spend more on music.
matwood 15y ago
I'm the same as you. I occasionally bought an album from the Amazon $5 deals, but even then I would often fill my cart, not feel it's worth it and then skip buying. With spotify $10/month feels like a good deal for a good product. If labels want to pull all their music then I'll go back to listening to my catalog of stuff I already own and not spending money at all.
freehunter 15y ago
I don't use Spotify, I use Zune Pass (it was available in the US long before Spotify was), but when I got a Zune, I moved from pirating _everything_ to never pirating music. I've been a Zune Pass subscriber for three years now and have discovered tons of new music I hadn't heard before. On some artists I've found I'll go out and buy the album on vinyl so I have it at home but that's a very rare occurrence. Just an anecdote from some random guy on the Internet, but when done right and with good integration, music subscriptions can be a great thing for the user _and_ the industry.
ticks 15y ago
Only music I have bought in recent years is bands that aren't on the streaming services, like RHCP or Metallica. As a user these streaming services are a nice free alternative to buying music, but if I were a band with a well known brand (i.e. lots of money has been pumped into it over years/decades), then I would avoid streaming services like the plague. Services like emusic are better for labels because they at least treat the music as something special and limited.

waterlesscloud 15y ago

I have a strong suspicion that these particular "labels" mostly have 1 artist on them.

JonnieCache 15y ago
This is not the case. They are admittedly all UK-based underground electronic music labels, so perhaps not the end of the world for spotify, but it isn't something they can ignore. STholdings has been a successful distributer for many years, it underpins the UK scene. Others are sure to be watching.
- jopt 15y ago
  If anything, it's more worrying for Spotify that these labels are all closely related by genre. This leaves a gaping hole in that specific genre, which is harder to ignore than a few artists here or there.
  - marvin 15y ago
    InsideOut (the biggest progressive rock/metal label) removed all their music from Spotify about a year ago. This would have been a dealbreaker for me when I started my Spotify subscription, but now I almost can't be bothered to switch...switching would mean exporting my 200 playlists to the next sertive.
    - AndrewDucker 15y ago
      Same here. I lost Frost* from my playlists, but frankly there' so much other music to listen to that I'm not missing them.
      - zokier 15y ago
        That's one scary aspect of music services such as Spotify. They twist our listening behavior with selective offerings.
    - 15y ago

JonnieCache 15y ago

When I read this I was not expecting it to be STholdings! That's about half of my favorite new music right there. Glad I didn't buy a subscription now.

mvkel 15y ago

Oof. The sole reason I have a Spotify subscription is for its vast dubstep catalog. Checking out my "favorites" playlist today, I hope I don't see half of them gone!

mvkel 15y ago
Yep. Lots of stuff gone. Joker, Mount Kimbie, Luke Vibert, Distance. Huge names, gone. This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can. It has nothing to do with Spotify remaining solvent.
- gcp 15y ago
  This is why subscription models don't work when you're subscribing to the middleman. If a label suddenly wants to yank their music, they can. Without a middleman, it's going to be a pain to subscribe to multiple labels. It would require vast improvements in protocols/infrastructure in an industry that's extremely slow moving.
  - icebraining 15y ago
    Billing would probably the hardest part - customers won't want to pay different values each month depending on the labels the music they listened to happened to belong, in my opinion. They (We) want flat, predicable bills, and that involves having a middleman acting as a "financial buffer", which charges the same to every client but pays different values to each label.
- matwood 15y ago
  Unless you are dealing with the artist directly, you are always dealing with a middle man. Make no mistake, the current distributors would love nothing more than the ability to cancel rights on any music you already think you own. There is some exec right now looking at video games that phone home before each play and thinking he wants to make that work with the music his company distributes.

philwelch 15y ago

"because it turns a service that has everything into a service that has “most stuff”" Spotify already was a service that has "most stuff"--it was never a challenge to find holes in their catalog. And judging from the ads that the free version of Spotify plays for me, either their entire userbase is really into country, or their advertising is more intended to badger me into buying a subscription so albums I actually like aren't interrupted by country music every 2-3 tracks.

nicwest 15y ago
... has “most stuff” — that’s a life-and-death difference to a hardcore music fan as you say, spotify's lacking catalogue is not news. I would be interested to know however if hardcore music fan's makes up the majority (or a significant minority) of spotify's user base. As such is this truely a life-and-death difference to spotify as a whole.

mbesto 15y ago

Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity. Interesting quote. Is music production being exploited as a low value commodity, or is it in reality a low-value commodity? With the insane amount of music that is available I personally feel like it's the latter, and the reverse exploitation of publishers/distributors has gone on for too long.

JonnieCache 15y ago
The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. This will strongly affect their decisions about selling/marketing it, in ways that will likely appear irrational in the light of cold economic analysis. Those who manage to understand this "passion" factor and work it correctly into their business models are the ones that will make the post-piracy music industry work for them. A simple example of this is the sale of super-deluxe limited edition box set versions of albums for $200 which we've been seeing over the last couple of years.
- dpark 15y ago
  >The factor that is often missed in this equation is that good music will always have a high value to the people who make it, because they pour their heart and soul into it. Passion doesn't change the economic facts. Painters pour their hearts and souls into their works as well. That doesn't mean that they can realistically sell at a high price. Most painters are broke, and most of the art people own are cheap reproductions from places like Pier 1 or Art.com. And most people still own relatively few reproductions. The question for musicians should be how can they maximize revenue, not price. Unless they want to live in a world where albums are purchased liked paintings: rarely and only by a small market.
  - JonnieCache 15y ago
    >Passion doesn't change the economic facts. Nope, but it will change economic behaviour.

gcp 15y ago

This is a gamble that can turn both ways; what these labels/artists now risk is that they basically no longer exist, or are no longer discoverable, for a large portion of listeners.

rdtsc 15y ago
The could also be thinking of building an in-house product similar to Spotify. Every label is probably thinking, "we can pay some web dev to build us this". Well, I hope they all do and see what happens.

waldr 15y ago

I wonder how many new fans those artists got from being on spotify, how many people then paid to see them live and recommended them to their friends. It's difficult to put a price on that.

cjstewart88 15y ago

IMO Spotify is overrated, www.tubalr.com is where its at.

bookwormAT 15y ago

If more gaps in Spotify's library really makes people purchase albums again? I know it makes me switch to Grooveshark.

akmiller 15y ago

more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio. Somewhat sensationalist headline trying to make it sound like it's Spotify that's losing these labels when in reality it's the labels opting out of ALL subscription based music services. Not to say that it's not a huge problem but there is no need to single out Spotify in the title.

betterth 15y ago
Also, it's a bunch of small time techno labels, and not a single major label is a part of the enormous sounding "200 labels".

eyko 15y ago

Scumbag STHoldings. Withdraws music from Spotify. Available in Soundcloud.

JonnieCache 15y ago
They only publish clips to soundcloud. Also, it's their music, they can do whatever they want with it.

ssharp 15y ago

If someone is going to solve the music problem, the business model should be as focused on addressing the concerns of labels and artists as it is on consumers. If the middleman is making customers happy, and artist/labels feel like their getting an equitable fee, lock-in will happen and it will become a strategic disadvantage to leave. It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. If we only look at the consumer end, we're bound to end up with lots of models that don't interest labels and artists, and ultimately will not satisfy customers either. If the ultimate destination is a world where we largely marginalize labels (which seems to be something a lot of people advocate as it will push costs down), then does Spotify get us any closer to that goal? Not as it stands now.

JonLim 15y ago
> It's far too easy to say "give the customers what they want. Your model is antiquated, catch up!" That isn't solving a problem. I think the gaming industry is good proof that this DOES work. Steam (and Gabe Newell) basically came out to say that making it super easy and convenient for customers basically made it easier to purchase from Steam rather than pirate. (Myself included.) The consumer end, especially for media like music or gaming, is probably the most important for business considerations, in my opinion.

fauldsh 15y ago

This is truly the big problem with Spotify. They're completely at the mercy of the big labels/distributors, who aren't receiving enough money for Spotify to matter to them that much. Whereas Spotify completely cannot afford for labels to pull their music. The problem is beyond sheer numbers of subscribers as well, Spotify needs people to listen to less, so that the money generated per song play increases and makes them a more attractive distribution medium. Radio stations do this by having DJ's talk lots between songs and varying the popularity of the songs they play, so they don't play too many new and expensive songs. The only tool Spotify has to alter the revenue per song play is changing the subscription price.