Spotify, which was just recently introduced in this country, has already garnered over 1.4 million users in less than a month -- with about 175,000 of those users opting for the paid levels. As Century Media acknowledged even as it removed its catalogue from the service, it's a great tool for fans to discover new music. It just not that lucrative for the artists or their labels.
On average, it's estimated that artists get between $0.00029 and $0.00991 per song streamed, meaning an artist would need to see between 1,500,000 and 4,000,000 streams a month just to make minimum wage. That's opposed to selling around 143 copies of a self-pressed CD a month, which roughly equates to a little over 3,000 CDs on a major label.
"It's a pretty sad state for indie artists expecting to get paid by selling their music," declares Plastic Sound Supply head Justin Gitlin. "Spotify is just another example of this trend, and I appreciate Century Media's decision. I can't say it's the right or wrong decision, but it's a noble position."
Virgil Dickerson, founder of Suburban Home Records, agrees, but sees the potential in Spotify, "As a label owner, I am not super-excited about the low payouts, but how much do we get paid when someone illegally downloads a record? Last time I checked, it was zero."
Since Spotify's catalogue is sourced from a number of different places with a variety of licenses, some imprints might not even be aware their catalogue is available there. Such was the case recently with Bocumast Records, whose co-owner, Jason Cain, wasn't aware that his label's releases were available on Spotify until we alerted him. Considering that the bulk of Bocumast's catalogue is already streaming or inexpensively available online, he didn't seem to mind. Exposure in a sea of blogs, download services and hundreds of other services is a pretty big deal, particularly for smaller labels like Bocumast, Suburban Home and Plastic Sound Supply.
"We're a tiny label and not selling much music anyway," says Gitlin. "We do it for the love, which shows up in the music we release. That said, I would love to see all of our artist's catalogues on Spotify, purely for exposure."
Dickerson agrees, "I do think Spotify represents the potential future of music. I imagine a time in the near future when nearly everyone has Spotify. You post a link to an album you love and everyone who sees your wall can also listen to it. It will take music discovery and listening to a whole different level."