You know when you go into a restaurant, and the waitress seats you and asks if she can get you started with some drinks while you take a moment to look over the menu, and you say “I’ll have a Coke,” and they say “is Pepsi ok?” and you just go ahead and settle because it’s what they have and saying “no, it’s not” won’t magically make a Coke appear, and no one at the restaurant is going to run across the street to get you one?
That’s how artists feel when it comes to selling music (Coke) vs. making it available for streaming (Pepsi).
Fun With Math!
In 2015, Spotify reported “over 75 million listeners enjoying over 20 billion hours of music.” So, that means the average streaming listener is playing 266.66 hours of music a year, let’s just say 267 for simplicity’s sake. A little less than 45 minutes a day spent listening to music.
20 billion hours of music: let’s say that you can listen to 17 songs an hour (the ol’ 3 and a half minute average, not taking into account those who enjoy 17 minute improvised free-form jazz tracks), that’s a possible 340,000,000,000 (340 billion) songs streamed.
0.5% = $4,270,000 = $0.002 per stream…
Now, Drake was the most streamed artist in 2015, with 1.8 billion streams. Holy shit, 1.8 billion streams, guess he’s getting the biggest chunk of the royalty pie, right? Well, 1.8 billion divided by 340 billion (our estimated total songs streamed) is 0.5%. That’s his share.
Spotify claims they pay 70% of their revenue to rights holders, and that 70% “is split amongst the rights holders in accordance with the popularity of their music on the service,” so it’s not a pay-per-stream model. Last year, Spotify made $1.22 billion, so 70% of that is $854 million, and 0.5% of that is $4,270,000. That’s Drake’s cut. Well, more accurately, that’s the cut of the people who hold the rights to the songs, and then they dole it out accordingly to the performer, the writers, the producers, and I’m sure the labels probably keep a buck or two for themselves (sarcasm doesn’t work very well in written form, I’m well aware they take the biggest chunk, save your comments).
This would work out to $0.002 per stream, which is a little off the mark of the $0.006 — $0.008 per stream that Spotify claims was the average. And although a lot of this is admittedly speculation based on estimates, I’m getting to my point, which is the other number they mentioned…
46 million people streamed at least one Drake song once.
If 46 million people PAID for a Drake song, ONE Drake song, at the regular iTunes rate of a buck… well, no need to get out the calculators for this one, that’s a possible $46 million dollars in revenue in 2015. If they all bought just two of his songs, that’s $92 million dollars in revenue. Now, this may seem stupid to you, you’re thinking “of course 46 million people won’t pay to listen to a Drake song, they’ll listen to it if it shows up in a playlist but you’re fucking crazy to think they’re ALL going to buy his music too.”
Why? Since Drake is the most popular artist, let’s compare him to the most popular movie currently in theaters… Batman v Superman. It’s generated $682 million as of writing this. The average ticket price reported by Variety is $8.61, which means roughly 79.2 million tickets were sold (so far).
Sure, some of those are going to be significant others dragged along to a movie they didn’t want to see in the first place, some people went and saw it twice, but that’s not important. What’s important is that it’s not insane to think that 46 million people who have even the most passing interest in something would be willing to pay money to consume it when a lot more people are spending a lot more money for a one-time experience.
“But some ARE willing to pay money to consume it, they’re willing to pay $9.99 a month to consume as much music as they want… unless of course they just take the free version, then they’re willing to listen with ads, which generates money so we don’t have to!”
And this is why music is considered so devalued, and why I feel artists are settling. In no other sector of the entertainment industry is this acceptable to creators. Sure, Netflix exists for movies, but they’re not showing brand new movies that just came out in theaters, they’re not even showing brand new movies that just came out on DVD/BluRay/Digital Download, everything’s at least a year old by the time it makes it to Netflix and had a chance to make some real money, and they certainly don’t make it available for free, AND not every movie ever made is on there.
If the music industry did that, said all brand new music was only available at retail on CD or on iTunes for 6 months, THEN available on streaming platforms? People would use that as a justification for piracy, because again there’s no perceived value, there’s this belief that music should be free or as close to it as possible.
Meanwhile, the music industry has made concession after concession to try to prevent piracy. You know how every sanctimonious music fan on the Internet wishes it was still the 90s? So do the artists. In the 90s, you pretty much had to buy a $20 CD for that one song you liked. Aqua sold 14 million copies of Aquarium because of ‘Barbie Girl’. Eventually, everyone felt ripped off (and rightfully so if you spent $20 for Barbie Girl, though that’s really your fault), not being able to get just the songs you want for a reasonable price (even a CD single was $5 or $6). Peer-to-peer downloading came about, music files are really small and were easy to download even on dial-up, and the Internet was starting to become more than just dweebs playing Everquest. Soon, everyone and their mother were pirating songs from Napster and Kazaa (and 9 times out of 10, you got the actual song you were trying to download… the virus-ridden porn clip on attempt #10 was a bonus).
Enter iTunes, a buck a song, so if you only liked two songs on an album? Shit, that’s only $2 you gotta spend! Such a great deal, right? Who wouldn’t do this?! Well, you let me know when a song hits 14 million digital downloads. The RIAA says that Justin Bieber’s “Baby” is the best-selling modern single at 12 million copies, and shows only 10 other singles with Diamond (10 million+) certification, one of which is Elton John’s “Candle in the Wind 1997,” so I can tell you right now that’s not digital sales.
SO, when that didn’t work, they said “ok… what if we figure out a way for people to not really have to pay for each song, but they can still listen to them for really cheap? Even cheaper than a fuckin’ dollar, which we thought was insanely cheap already!” And streaming services were born.
“Streaming is a great way to discover new music though, and a great way to decide if I like a song enough to buy it!”
Clearly only half of that sentence is true. Again, 46 million people listened to Drake songs, most of them likely chose to, but they didn’t like them enough to open up their wallets. In 6 years, he’s sold 37 million digital singles, again, that took 6 years, that’s not 46 million people listening to his songs 1.8 billion times in 1 year on ONE streaming platform (we haven’t even talked about Tidal, or even YouTube, where Hotline Bling itself has been streamed 680 million times). And when you consider that 16 of his singles are certified platinum or multi platinum (go search this on the RIAA site yourself) making up at least 35 million of those downloads, and the best he’s ever done is 5 million copies of a song (the aforementioned Hotline Bling), that’s a relatively low percentage of discovery-to-purchase.
So, when Drake walks into a restaurant and says “I’ll have a Coke,” and the waitress says “is Pepsi ok?” he pretty much has to say yes. If he says no… sure, he’s doing alright, 37 million downloads in 6 years is nothing to bitch about. He can say no like Adele and Taylor Swift and a handful of other extremely successful artists have, but what about those who aren’t Drake? What about the artists who are doing half the sales and streams of what Drake’s doing? Or a quarter? Or a tenth? Or a hundredth Mildly popular Indie artists who could make a living and do more shows if music had any perceived value, even if that means they sold 50,000 — 100,000 singles a year?
They all have to settle for Pepsi too, have their songs stream to make a sad percentage of what they could if people actually bought music the way they buy other forms of entertainment. Because it’s either that, or stay thirsty.
NOTE: Buckley is more of an RC Cola man, and only got a 60% in Grade 11 math.
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