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Category Archives: Spotify

Spotify to Be Publicly Traded

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Spotify, the streaming music giant, is preparing to go public. The company recently filed their initial public offering (IPO) for $1 billion to be a part of the action on the New York Stock Exchange. While investors will likely be rushing to obtain a part of this very popular stock, the actual company isn’t so popular with many artists and songwriters. They have quite the varied opinion of the Swedish company, valued at $19 billion. The company’s structure compensates artists with royalties where the more popular artists receive the greatest payments. Many older and less known artists don’t receive as much compensation and generally dislike this structure. However, those artists at the top have little to complain about as they can see massive payments. Spotify pays about $7 for every 1,000 songs that are streamed. This accounts for quite a payday for top artists. For example, Ed Sheeran accumulated 6.3 billion streams in 2017 for a nice payment of more than $44 million. On the other hand, David Crosby, a veteran rock artist, accumulated 2.2 million streams for his “Lighthouse” album in 2016, and he didn’t receive any compensation. Again, this is due to the unique structure.

 

Regardless of opinions, the company will likely continue to see a stream of income. Estimates indicate that Spotify could make about $23 billion due to the IPO. Record labels would see dividends as well with top labels such as Sony Entertainment, Warner, and Universal estimated to receive about $1 billion each. Record labels also use their company’s unique structure to determine payment which, again, usually goes more towards the popular artist. These industry-leading labels have confirmed that the earning would be shared with their artists. Perhaps at least the record labels will treat artists fairly or maybe not.

Spotify Releases A New Music App

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Spotify is a streaming music service that has accumulated more than 140 million active users and 70 million paying customers. They are currently testing an app called Stations on Android. This will enable Spotify users to choose from numerous personalized music stations. Since the app is supported by ads, it is free for Spotify users. The ads are removed for Spotify premium users.

Once users have the app, they can listen to the music immediately, and changing stations is easy. The user then creates personalized stations with their favorite music. The Spotify app was created for iOS and Android, and the music stations are all different genres. Some of the stations are recognizable from the main Spotify app including Discover Weekly and Release Radar. The first appearance resembles the apps original Pandora design. For additional details regarding this app, please visit https://www.forbes.com/sites/amitchowdhry/2018/01/31/spotify-stations-app/#1c78a0f2bc06.

The user begins by using their Spotify account to log into the app. The listing for all the recommended stations is easily readable due to the large font. The last station selected will automatically start to play. The app provides choices such as love, play and pause. It is not possible to skip a song and return to a song previously played, or search for specific artists or songs. The concept is users will have to listen to each selection, and give the song a chance.

It is unknown whether the app will become available on additional devices. Currently, Australia is the only place the app is officially available. There is an APK download for the United States, but it is limited to Android 4.0.3 and above. Due to these restrictions, the downloads for the Stations app were below 100 on launching day. According to a spokesperson from Spotify, they are still testing new features.

Musicians to Receive Boost in Streaming Royalties

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Streaming services like Spotify and Google Music will soon have to change the way they pay artists on their platform. The U.S. Copyright Royalty Board has just approved the largest increase ever in payment rate for songwriters and song publishers. Streaming platforms are now expected to pay 15.1 percent of revenue to artists, nearly a 50 percent increase from the previous rule of 10.5 percent.

The decision was made by three judges in the U.S. Copyright Royalty Board, who were appointed by the Library of Congress. For many years, publishers and songwriters had been battling streaming platforms for a higher share of revenue. As the two sides were unable to come to an agreement, the U.S. Copyright Royalty Board was forced to intervene.

This change to revenue rates will not completely satisfy the music publishers and artists, as their goal was to earn flat fees based on the number of times their music is played and the number of users on each streaming platform. For example, each songwriter would receive 15 center per 100 plays and an additional $1.06 for each paying user on the platform. The U.S. Copyright Board refused to put such rules into play, instead restricting its ruling to the revenue share model.

Companies affected by the ruling include Amazon, Google, Spotify, and Pandora, all of which offer paid streaming services with large libraries of music. Apple has distanced itself from competitors on this issue, as it has deemed the current revenue structure to be unsound. As a result, the company is facing a separate class action lawsuit.

Further discussion and negotiation on the subject is expected, especially now that a bill called the Music Modernization Act has been entered into Congress. The law would set up a new government group to oversee digital rights and royalties.