Apple proposes flat streaming music royalties for songwriters, at the expense of Spotify, YouTube

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Comments

  • Reply 21 of 36
    freerangefreerange Posts: 1,589member
    RickeyP21 said:
    Poor Apple. "Only" making $45 million per year for playing someone else's content. However do you stay in business with your over priced laptops and $800 iPhone sales. I know, why don't you screw over music fans everywhere and force them to pay your over priced fees instead of using better products like Spotify!
    Uh oh, we have an ignorant troll among our ranks. So little Rickey, you think it's ok that these free streaming sites are ripping off the artists? It was an absolutely stupid business model from the start - an "all-you-can-eat" music site for free. And what has the impact been for artists? Their album sales have plummeted, and they are making next to nothing on their recordings except for a handful of top artists, all so you don't have to pay for what you use. Go get yourself a good education so that you have a better understanding of basic economics. And if you don't want to buy an Apple iPhone or computer don't. You won't be missed.
    calinolamacguyjason leavitt
  • Reply 22 of 36
    VisualSeedVisualSeed Posts: 217member
    bells said:
    Free was never the model. Radio Stations, restaurants and bars all pay royalties.




    Not not entire true. Traditional radio stations generally do not pay royalties. It depends on what type of media they play. They were exempt under the copyright act. Streaming ones do.  Streaming ones aren't because they weren't around when the original act was passed.
    Traditional radio stations don't let you play your own selection of songs from their library. They play a set of songs that is popular in order to attract the most listeners to their advertisers so the ratio of royalties to ad revenue is manageable. 

    "Radio airplay is considered a public performance. Public performances generate performance royalties for songwriters, which are collected by the PROs (ASCAP, BMI, or SESAC). In the US, terrestrial broadcasters (AM or FM stations) do not pay performers or sound recording copyright owners; they only pay the songwriters"
    edited July 2016
  • Reply 23 of 36
    foggyhillfoggyhill Posts: 4,767member
    Here's where Spotify loses out in competition with Apple if Apple gets everyone (copyright holders, at least) to agree to higher royalty rates across the board:

    Apple doesn't need to make any money on the music itself, as it makes money on the hardware used to play it, and the whole Halo Effect.

    Apple's best business move would be paying a rate that keeps a neutral financial gain from the music royalties versus sales alone, assuming the government doesn't decide even that's too aggressive due to using their other strengths to leverage their rates.
    If they thought that was too aggressive (neutral) then they'd have to close up Amazon for all they've done in the past...
  • Reply 24 of 36
    Apple's Proposal was created by Trent Reznor - a musician and songwriter who helps lead Apple Music. As such Apple's proposal carries a lot of weight. It definitely benefits songwriters with a very reasonable flat fee for their work. It definitely helps the music business and the creatives in particular.
    baconstang
  • Reply 25 of 36
    bells said:
    Free was never the model. Radio Stations, restaurants and bars all pay royalties.




    Not not entire true. Traditional radio stations generally do not pay royalties. It depends on what type of media they play. They were exempt under the copyright act. Streaming ones do.  Streaming ones aren't because they weren't around when the original act was passed.
    Radio Stations pay royalties to those who own the music. Congress has set the law for radio station royalties. They are much lower than streaming royalties.
    baconstang
  • Reply 26 of 36
    RickeyP21 said:
    Poor Apple. "Only" making $45 million per year for playing someone else's content. However do you stay in business with your over priced laptops and $800 iPhone sales. I know, why don't you screw over music fans everywhere and force them to pay your over priced fees instead of using better products like Spotify!
    Free was never the model. Radio Stations, restaurants and bars all pay royalties. Why people like you feel entitled to free stuff is beyond me. Do you refuse to pay for newspapers and magazines because they have ads in them? Or maybe you're going to give up paying for cable because networks also make you watch ads? Or maybe you haven't noticed how ad free services come at substantial premiums or in the case of public tv are subsidized. I suppose you could use OTA TV and Radio to support your argument, but TV ads were placed at massive premiums to cover production costs (unlike radio) and radio paid far lower royalties than Apple is proposing in the hopes that it would promote the artists concerts and record sales. Two COMPLETELY different scenarios. You don't have the opportunity in either case to constantly replay and effectively own the content with OTA, whereas you do with a digital archive. I suppose Spotify could turn its app into a radio station, but then it wouldn't be Spotify as we know it and would resemble streaming radio from the late 90's. 

    With respect to apple's profits. It's actually pretty surprising that they're willing to offer the service for the little profit it actually yields. Handing over $7 for every $10 subscription is generous to both the content providers and Apple's customers especially considering the resources they have to allocate to make those streams available. Most companies would make you pay a subscription AND listen to ads. 
    Actually, "free," as in ad-supported, is a very popular and proven business model. Works well for Facebook and Google. 
  • Reply 27 of 36
    davidwdavidw Posts: 975member
    Free was never the model. Radio Stations, restaurants and bars all pay royalties. Why people like you feel entitled to free stuff is beyond me. Do you refuse to pay for newspapers and magazines because they have ads in them? Or maybe you're going to give up paying for cable because networks also make you watch ads? Or maybe you haven't noticed how ad free services come at substantial premiums or in the case of public tv are subsidized. I suppose you could use OTA TV and Radio to support your argument, but TV ads were placed at massive premiums to cover production costs (unlike radio) and radio paid far lower royalties than Apple is proposing in the hopes that it would promote the artists concerts and record sales. Two COMPLETELY different scenarios. You don't have the opportunity in either case to constantly replay and effectively own the content with OTA, whereas you do with a digital archive. I suppose Spotify could turn its app into a radio station, but then it wouldn't be Spotify as we know it and would resemble streaming radio from the late 90's. 

    With respect to apple's profits. It's actually pretty surprising that they're willing to offer the service for the little profit it actually yields. Handing over $7 for every $10 subscription is generous to both the content providers and Apple's customers especially considering the resources they have to allocate to make those streams available. Most companies would make you pay a subscription AND listen to ads. 
    Actually, "free," as in ad-supported, is a very popular and proven business model. Works well for Facebook and Google. 

    Those are different models. With Facebook and Google, they created what they are giving away for free and are hoping the the ads they sell will pay them more than what it cost to create what they are giving away free. But there is a possible lost as the ad revenue produce might not pay for the cost of creating what they gave away for free. 

    With models like Spotify and YouTube, they did not create what they are giving away for free, the artist in the music industry created it. And they are only paying a percentage of their ad revenue to the music industry for giving it away free. Therefore, there will never be a lost for Spotify or YouTube, as they didn't have to bear any of the cost to create what they are giving away for free and they are not paying them 100% of the ad revenue. But the music industry could lose as the ad revenue they receive for the music that was given away for free might not be enough compensation for the artist that created it.

    But bearing in mind that the artist also did not bear any cost in creating their music for free streaming as they already created their music to make money with physical media and digital download sales. So to them it's a matter of whether the money they make with free steaming music is enough to compensate them for any lost physical media or online download  sales due to streaming. With the free streaming ad supported model, probably not. And may not even with Apple minimum royalty per stream model. But they are probably better off with Apple's model.

    And not all artist are affected equally. I imagine with big artist that have a big fan base, the lost of sale would be minimal as their fans would still want the bonus tracks and artwork that comes with a physical or digital download. Not to mention the better quality recording. Middle of the road artist would probably be affected the most as more often, they only have 1 or 2 tracks that are worth having and they don't have enough hardcore fans willing to buy it, if they can stream it. Now the relatively unknown artist might benefit as streaming would expose their music to a wider audience than they would normally have otherwise. So they might end up with more sales plus the revenue from streaming. Streaming would essentially be advertising for them. Much like back in the days when radio air time was the best way for an artist to get their music out to the public. Which led to the radio payola scandal. A topic for another thread.    
    edited July 2016
  • Reply 28 of 36
    foggyhillfoggyhill Posts: 4,767member
    Free was never the model. Radio Stations, restaurants and bars all pay royalties. Why people like you feel entitled to free stuff is beyond me. Do you refuse to pay for newspapers and magazines because they have ads in them? Or maybe you're going to give up paying for cable because networks also make you watch ads? Or maybe you haven't noticed how ad free services come at substantial premiums or in the case of public tv are subsidized. I suppose you could use OTA TV and Radio to support your argument, but TV ads were placed at massive premiums to cover production costs (unlike radio) and radio paid far lower royalties than Apple is proposing in the hopes that it would promote the artists concerts and record sales. Two COMPLETELY different scenarios. You don't have the opportunity in either case to constantly replay and effectively own the content with OTA, whereas you do with a digital archive. I suppose Spotify could turn its app into a radio station, but then it wouldn't be Spotify as we know it and would resemble streaming radio from the late 90's. 

    With respect to apple's profits. It's actually pretty surprising that they're willing to offer the service for the little profit it actually yields. Handing over $7 for every $10 subscription is generous to both the content providers and Apple's customers especially considering the resources they have to allocate to make those streams available. Most companies would make you pay a subscription AND listen to ads. 
    Actually, "free," as in ad-supported, is a very popular and proven business model. Works well for Facebook and Google. 
    IF the ad, actually SUPPORTS, the service.... Well, yes. This is not the case for Spotify, not even close.
    One of the reason is that it's not their product to give. If your making the product, you can take the "artist"/"producer" cut yourself, which makes ad supported possible.
    That's one of the reason Netflix is going so strongly into production to lessen their reliance on broadcasting other people's products.

    Even in the case of youtube, it's arguable that with higher royalties, ads will support that too (Google is in a tiffy with copyright owners too).
    They'll have to change some things.

    Radio can be ad supported because broadcast costs are lower since the user can't ask for a song on demand.
    edited July 2016 baconstang
  • Reply 29 of 36
    foggyhillfoggyhill Posts: 4,767member
    davidw said:
    Actually, "free," as in ad-supported, is a very popular and proven business model. Works well for Facebook and Google. 

    Those are different models. With Facebook and Google, they created what they are giving away for free and are hoping the the ads they sell will pay them more than what it cost to create what they are giving away free. But there is a possible lost as the ad revenue produce might not pay for the cost of creating what they gave away for free. 

    With models like Spotify and YouTube, they did not create what they are giving away for free, the artist in the music industry created it. And they are only paying a percentage of their ad revenue to the music industry for giving it away free. Therefore, there will never be a lost for Spotify or YouTube, as they didn't have to bear any of the cost to create what they are giving away for free and they are not paying them 100% of the ad revenue. But the music industry could lose as the ad revenue they receive for the music that was given away for free might not be enough compensation for the artist that created it.

    But bearing in mind that the artist also did not bear any cost in creating their music for free streaming as they already created their music to make money with physical media and digital download sales. So to them it's a matter of whether the money they make with free steaming music is enough to compensate them for any lost physical media or online download  sales due to streaming. With the free streaming ad supported model, probably not. And may not even with Apple minimum royalty per stream model. But they are probably better off with Apple's model.

    And not all artist are affected equally. I imagine with big artist that have a big fan base, the lost of sale would be minimal as their fans would still want the bonus tracks and artwork that comes with a physical or digital download. Not to mention the better quality recording. Middle of the road artist would probably be affected the most as more often, they only have 1 or 2 tracks that are worth having and they don't have enough hardcore fans willing to buy it, if they can stream it. Now the relatively unknown artist might benefit as streaming would expose their music to a wider audience than they would normally have otherwise. So they might end up with more sales plus the revenue from streaming. Streaming would essentially be advertising for them. Much like back in the days when radio air time was the best way for an artist to get their music out to the public. Which led to the radio payola scandal. A topic for another thread.    
    Even for new artists, unless they become BIG, and very very few do, streaming is not really that good a marketing venue unless your ready to tour non stop! to actually make money. There is essentially no money to be made right now in streaming for 95% of artists, very little for probably 2-3% and good money for less than 1%.

    The top 200 songs in the country an any given time get 99% of plays, less than a 500 songs a year, by 200-250 artists get any decent numbers by years end.
    Probably less than 50 get great income from sales/streaming per year these days. You probably know the name of most of the them.
    baconstang
  • Reply 30 of 36
    linkmanlinkman Posts: 928member
    There is certainly a big imbalance on how musicians are earning from these varieties of sources: 

    Edit: the picture does not come out well on this site. Please follow the link below. It is quite telling.

    Source: http://www.businessinsider.com/heres-how-much-musicians-make-online-from-spotify-itunes-and-youtube-2015-4
    edited July 2016 baconstang
  • Reply 31 of 36
    jbdragonjbdragon Posts: 2,170member
    I have one thing to say, FM/AM radio!!!.  Playing music to people for many years for free and still doing it.  Ask being paid for by commercials.  Tell me, what's the difference from over the airways to streaming on the internet.  In fact you can even stream these radio stations on the internet for free!!! 


  • Reply 32 of 36
    jbdragon said:
    I have one thing to say, FM/AM radio!!!.  Playing music to people for many years for free and still doing it.  Ask being paid for by commercials.  Tell me, what's the difference from over the airways to streaming on the internet.  In fact you can even stream these radio stations on the internet for free!!! 


    One difference is that radio songs aren't on demand. You don't have any control over the song that gets played. I think that letting people pick the song they want gives the artist reason to expect compensation. 
    baconstang
  • Reply 33 of 36
    singularitysingularity Posts: 1,329member
    linkman said:
    There is certainly a big imbalance on how musicians are earning from these varieties of sources: 

    Edit: the picture does not come out well on this site. Please follow the link below. It is quite telling.

    Source: http://www.businessinsider.com/heres-how-much-musicians-make-online-from-spotify-itunes-and-youtube-2015-4
    From that article an artist is only taking an average 16% of the payment. The day when most artists dump record companies is long overdue
  • Reply 34 of 36
    gatorguygatorguy Posts: 21,101member
    bells said:
    Free was never the model. Radio Stations, restaurants and bars all pay royalties.




    Not not entire true. Traditional radio stations generally do not pay royalties. It depends on what type of media they play. They were exempt under the copyright act. Streaming ones do.  Streaming ones aren't because they weren't around when the original act was passed.
    Radio Stations pay royalties to those who own the music. Congress has set the law for radio station royalties. They are much lower than streaming royalties.
    Close but not correct. Radio play royalties go to the songwriter instead of "those who own the music" such as a record label or performer. While often the performer and songwriter are one and the same, other times they are not and when they're not they don't get anything from broadcast radio.

    The discussion and invitations to comment have been going on for over a year now. ASCAP chimed in with their views on it early last year, and Apple seems to be pretty much in sync with them. 
    http://www.ascap.com/playback/2015/01/action/what-the-copyright-offices-study-on.aspx
    edited July 2016
  • Reply 35 of 36
    davidwdavidw Posts: 975member
    foggyhill said:
    davidw said:

    Those are different models. With Facebook and Google, they created what they are giving away for free and are hoping the the ads they sell will pay them more than what it cost to create what they are giving away free. But there is a possible lost as the ad revenue produce might not pay for the cost of creating what they gave away for free. 

    With models like Spotify and YouTube, they did not create what they are giving away for free, the artist in the music industry created it. And they are only paying a percentage of their ad revenue to the music industry for giving it away free. Therefore, there will never be a lost for Spotify or YouTube, as they didn't have to bear any of the cost to create what they are giving away for free and they are not paying them 100% of the ad revenue. But the music industry could lose as the ad revenue they receive for the music that was given away for free might not be enough compensation for the artist that created it.

    But bearing in mind that the artist also did not bear any cost in creating their music for free streaming as they already created their music to make money with physical media and digital download sales. So to them it's a matter of whether the money they make with free steaming music is enough to compensate them for any lost physical media or online download  sales due to streaming. With the free streaming ad supported model, probably not. And may not even with Apple minimum royalty per stream model. But they are probably better off with Apple's model.

    And not all artist are affected equally. I imagine with big artist that have a big fan base, the lost of sale would be minimal as their fans would still want the bonus tracks and artwork that comes with a physical or digital download. Not to mention the better quality recording. Middle of the road artist would probably be affected the most as more often, they only have 1 or 2 tracks that are worth having and they don't have enough hardcore fans willing to buy it, if they can stream it. Now the relatively unknown artist might benefit as streaming would expose their music to a wider audience than they would normally have otherwise. So they might end up with more sales plus the revenue from streaming. Streaming would essentially be advertising for them. Much like back in the days when radio air time was the best way for an artist to get their music out to the public. Which led to the radio payola scandal. A topic for another thread.    
    Even for new artists, unless they become BIG, and very very few do, streaming is not really that good a marketing venue unless your ready to tour non stop! to actually make money. There is essentially no money to be made right now in streaming for 95% of artists, very little for probably 2-3% and good money for less than 1%.

    The top 200 songs in the country an any given time get 99% of plays, less than a 500 songs a year, by 200-250 artists get any decent numbers by years end.
    Probably less than 50 get great income from sales/streaming per year these days. You probably know the name of most of the them.
    No music artist, big or small should be relying on streaming income as a main source of income for their music. That is totally unrealistic now and may be like this in the distant future, as even the streamers are having a hard time making money streaming music. 

    Even back in the days of radio, music artist depended on touring and giving live performance as their main source of income. They were not paid anything for radio air time, unless they were also the song writer. Radio air time amounted to advertising for their live performances and sales of their records. Having more music listeners attend live performances mainly benefited the artist and any increase in record sales mainly benefited the record labels.

    Even today, the big artist rely on live concerts for a lot of their income. Unless the artist owns the record label, like Taylor Swift. And she's triple dipping as she is also the song writer for most of her music. But very few artist are in that position. So the new small artist shouldn't  expect anything different. Except that they will most likely not be performing in a 3,000 to 10,000 seat arena. Unless they're an opening act for a big artist. But even some of the big artist today, prefer to perform live in small 300 to 1,000 seat venue. Of course these musicians are beyond the need to perform live as a means to survive. They just still enjoy performing in front of a live audience. 

    I would think the the whole point of being a musician, is to be able to perform in front of a live audience that wants to see and hear you perform. Whether it's in a 300 seat club or 5,000 seat arena. A musician should not be comparable to an app developer sitting behind a computer and hoping to make a living by trying to write the next Angry Bird for an app store. That's more like what a song writer does. 

    So having to tour and perform live shouldn't be consider a hardship for musicians, whether they're a big artist or small artist. It shouldn't  matter that they have to tour because it's their main source of income. Playing live performances is part of their job, until they become big enough to tour just because they still like performing in front of a live audience.    
  • Reply 36 of 36
    mike1mike1 Posts: 1,924member
    gatorguy said:
    bells said:
    They still pay royalties but via ASCAP. BMI and SESAC. That means tho that it's primarily a songwriter who monetarily benefits from radio play, considered a "public performance", rather than the singer or owner of that recording.
    Which is why performers often want to show as songwriters even if they really had minimal (or no) input into the song.
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