Music Deep Dive with MOOCO!
Hello! 😄
It’s MOOCO again! I am really excited about today’s topic: music. It is such a big part of my and many other people’s lives. As a frequent listener of music myself, I decided last year that I would pay for one of the most popular streaming platforms out there today — Spotify Premium. Despite the fact that I’m putting my oh-so-precious money into this platform, I’ve never sat to think about the business behind the music. Being that I am a Kpop fan, I always see countless posts of fans reminding each other to “stream the new song!!!” But what does streaming actually do for the artist? How does putting their song on repeat translate to profit? Where is my money actually going? In this post, I’m going to be answering those questions and diving into all the behind-the-scenes details about music streaming on Spotify.
My first song of choice and favorite song at the moment is “LION” by (G)I-DLE. (G)I-DLE (pronounced the same as idol; the G is silent) is a Kpop girl group under the Korean record label Cube Entertainment. Despite not being a very well-known record label, Cube Entertainment is one of many labels under Kakao M, a large corporation based in Seoul, South Korea. My second song-of-choice is “I NEED U, IN THE SUMMERTIME” by Warrenisyellow and Chasu. Warrenisyellow is actually a small independent artist and is therefore not under any record label (to my knowledge). Warren wrote the lyrics and co-composed with the producer of the track, Chasu. The final song I will be talking about is “You And I” by Jacob Collier. This song is actually a cover of Stevie Wonder’s original hit. Jacob Collier is currently under Hajanga Records. There is not a lot of information on this record label — they’re only associated with Collier. Honestly, it wouldn’t be much of a surprise to me if this is Jacob and his team’s own label… Jacob is somewhat of a revered musical genius.
I purposefully chose these three different songs to dive deeper into because they are all a bit unique. The first is based in Korea, which makes a bit of a difference. As of today, Spotify has not yet launched in South Korea as a streaming platform. Korea’s biggest platforms are Melon, Genie Music, Soribada, etc. However, this doesn’t mean your favorite groups aren’t profiting from our streams over on Spotify. Any artist on Spotify is able to make money off their streams. How much an artist earns from streams is strictly between the artist and their team — whether that be with or without a record label. In the case of Warrenisyellow and Chasu, who operate privately without a record label to guide them, the profit from their streams likely does not get that extra cut from some upper authority. For Jacob Collier, if we assume that he does not run his own independent label, it is likely that he earns his share of the deal with Hajanga.
Now for the complicated part — the numbers. Streaming platforms do not follow the same pattern for how much an artist earns per stream, so I’m not saying the following information is how it is done in the entire industry. This is specific to Spotify. According to Ryan Waczek of the Indie Music Academy, an artist’s royalties from Spotify streams depend on a variety of factors but can be summed up in one general rule:
10.5% of the gross revenue of the company, minus the cost of public performance.
Waczek also explained that on a previous FAQ page, Spotify clarified that
“…variables have led to an average “per stream” payout to rights holders of between $0.006 and $0.0084. This combines activity across our tiers of service. The effective average “per stream” payout generated by our Premium subscribers is considerably higher.”
Basically, every artist profits differently depending on where the streams are coming from, how many premium users are in that area, advertisements on Spotify — the list goes on. It is therefore not clear how much each of these artists is making. In terms of how much we listeners pay, the answer is a little clearer. Spotify users can listen for free with the occasional advertisement interrupting your listening party. On desktop apps, any song is accessible with an internet connection! However, on iOS or Android apps, the user is not able to select a specific song but instead must shuffle through songs. For $9.99/month, individual users have access to ad-free and downloadable music, meaning that the music will be accessible without an internet connection at any moment. If you are a student in college, the monthly subscription fee goes down to $4.99/month for a bundle deal including Hulu and Showtime, both with ads. A pretty good deal when you look at it face value! However, the amount one person pays per song really depends on if they use the available amenities every month! I am a Spotify Premium Student member, and I have not used the Showtime feature even once. I’ve used Hulu here and there, and I use Spotify every day. In my opinion, it is very much worth $4.99 a month, as I am splitting that price down by the consistent number of new songs I get to find and enjoy.
Overall, the music industry was much more complicated than I expected. Digital media has become such an integral part of my life but I never realized how different it has made my experience with music. Not only that — these huge monopolies that have been created in the digital music industry now struggle with managing all of these artists while also having to worry about profiting as a company. For some time, Spotify wasn’t making any profit, but have recently been able to turn that outcome over as a result of lower costs and plans. On the other hand, digital media has opened up so many opportunities for artists around the world. Kpop, for example, has rapidly become popular in so many countries — something I believe would not be possible with digital media. Small artists are also able to chase their dreams by having a streaming platform to put their creations on. Though it might feel like they are releasing their music into the void, there is an equal opportunity for all starting musicians. In those ways, digital media has helped bring people together through the love of listening to and creating music, and it has therefore defined the culture of appreciating music today.
Quoted:
https://www.indiemusicacademy.com/blog/music-royalties-explained#royalties-from-streaming
