In the last month, you may have noticed a bunch of stories and social media about how Spotify is evil based on some really stupid and tone-deaf comments made by CEO Daniel Ek. In a recent interview with Music Ally (link here), he suggested that to be viable, artists need to make more content, that putting out a record every 3 to 4 years just isn’t good enough anymore. The pandemic is really hurting smaller bands, so this was extra tone-deaf for him to say right now as he has made millions and millions while companies like Spotify have gutted revenue streams for the very bands who create the music he is streaming. A lot of artists were rightfully pissed off about this, and many posted about it online. Some even went so far as to stop using Spotify to distribute their music.
For artists, the economics of streaming are really bad, which we don’t think a lot of music fans really understand. Let’s use Stellarator to illustrate this. We have both of our EPs on Spotify (11 songs), and make about 0.3 cents per stream (yes, 1/3 of a cent), which is a pretty common royalty rate for Spotify. Since we publish our own music, we are not splitting royalties with our record company. However, many bands do split royalties with record companies or publishing companies, some as high as 50%, which make that 0.3 cents per stream much much smaller. Stellarator pays a small percentage to our distributor, so we pocket about 3 cents every time someone streams all 11 of our songs (both of our EPs).
We self-produce, self-record, and self-release our music, so we keep our costs really low. If you ignore CD manufacturing costs, we released “Pins & Wires” for about $700 and we did “Under Different Stars” for about $900. So we spent $1,600 to release 2 EPs (11 songs). How many streams are required just to cover our modest production costs? It would take more than 53,000 streams of songs, or nearly 5,000 listens of each EP just to break even. Our average song length is 3:30, so this is something like 3,100 hours of listening, or 130 days of straight streaming just to cover the costs of making the music in the first place.
What if we wanted to make a living on this? Assume all four of us would need to at least make Seattle minimum wage of $15/hour. As a band, we would need to earn $2,400 per week. To get that level of income from Spotify, we would need more than half a million fans to listen to both EP’s every week. We can assure you we are keeping our day jobs.
OK, so if the economics suck that bad, why are we on Spotify at all? For Stellarator, the answer is pretty straightforward: it is the easiest way for people to hear our music. At the scale that we operate, we really only do this for the fun and buzz of making music, the opportunity to hang out with good friends, and to have a creative outlet. We would put our music on Spotify for free if needed. Here’s why: It’s cool to be with someone who says “oh, you are in a band?” and then grab their phone and follow ourselves on their Spotify app (with extra hand sanitizer in the pandemic of course). We all decided long ago that trying to be full-time musicians just isn’t worth it, so what we care about most is people listening to our songs, whether or not we get paid. So (for us anyway) Spotify, Apple Music, YouTube, etc., all help with that mission.
But now you should think about all the bands that you love that are full-time musicians (or are trying to be). Streaming makes it super easy and convenient for you to listen to their stuff, and I’m sure that they love having you as a fan. But they are not making any money from you listening that way. These bands and artists typically make their money by touring (selling tickets & merch). This pandemic has killed live music for now, so most of these artists have no real way to make money in the current circumstances. The timing of Daniel Ek’s comment about “artists need to put out more content” was particularly bad when you look at the situation most indie bands are in right now.
Spotify didn’t create this problem. Frankly, the music industry has always been bad for musicians, going back to the beginning of time. It got worse with Apple and iTunes, when they started pricing all songs at $1, and people could buy individual songs (not the whole record). This started a major disruption, and Spotify, Apple Music, Napster, Tidal, etc., were just the next logical steps. But the situation really sucks for musicians today and the pandemic has turned the level of suck up to eleven. Even some very successful indie bands that we listen to can no longer make a living just being in a band. We bet more than one of your favorite bands is in this situation today.
If you really love a band or an artist (who isn’t named Taylor Swift), you should assume that they are struggling right now. One way to help is to buy CDs, vinyl, or other merchandise directly from the band’s website, or through bandcamp.com. Another way to help would be to donate to them directly – most smaller bands or indie artists have some form of Venmo or Paypal account, and would be happy take a donation. We have done this, and it is a nice way to connect with bands that we love!
By the way: please do not donate to Stellarator – the best thing you can do for us is to convince one of your friends to listen to us. We all have day jobs, and we make our records “on the cheap”. We’re doing OK. But we also do zero marketing when we release our music, and depend 100% on word-of-mouth. So if you like our stuff, tell your friends. 🙂
If you made it this far, thanks for reading!