Spotify and Artists Still Disagree Over Royalties
Spotify and artists are in the midst of a battle of sorts over royalties that each feel is deserved. The thing in question is, how much? How much is a digital stream worth? Some services pay more than others, some charge more to play than others.
If the record companies are to be believed, then as of right now, the average artist has to have their song streamed anywhere between 80 and 200 times for them to equal the amount of money earned from 1 digital download. When the numbers do not add up, and the artists and record labels refuse to move forward with their business model, things like Napster and Limewire happen. So how does the mold of the business model that the music industry runs on get changed?
All most labels see is the sheer numbers of streams vs. digital downloads. 200 streams equals $1, while 1 digital download equals $1. The void between these 2 needs to be closed. With a more dynamic paying system between up and coming services such as Spotify, and behemoths like iTunes, the industry will move forward more fluidly. Unless services that dominate the digital download service (iTunes) stop charging Coldplay rates for garage band tunes, the void will never be broached. Beacuse all the Labels will see is the all mighty dollar sign, not what was done to get there.
Because the digital music era is still in its infancy, the ability to look forward 20 years is way harder than to look back 20 years to see a new 10 track Michael Jackson album earn $20 a pop. As the industry pushes forward, and the digital age fully takes hold of the music industry, changes will happen and bands like Coldplay and Rihanna will show up on services like Spotify on day 1. Until then, the fight goes on.