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Sales are still more profitable than streams for artists

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Arthoe

As of recent, streaming in general has soared and become the most common way to consum music. Naturally, the narrative on how to judge an artists success has shifted and the way the charts get calculated have shifted in order to reflect how people chose to listen to music nowadays.

 

However, streaming in general is still not profitable for performers, songwriters and even the labels backing them up. Even with the very rapid decline of pure sales, they overall generate more revenue for artists, songwriter and labels likewise.

 

According to Digital Music News, Spotify has a pay-out rate of $0.0038 per stream. This pay out rate will further get divided between the label(s) of an artist, the performer(s) and the songwriter(s). For example: The A Star Is Born soundtrack has been streamed approximately 770M times on Spotify so far, meaning the album has generated a revenue of rougly $3M dollars, which will be distributed to the label, Lady Gaga, Bradley Cooper, and the respective songwriters & producers who worked on the album. According to calculations CNBC 100M streams pay out to be $70,000 for the main performers, meaning that Gaga and Bradley have received roughly $539,000 together so far (before taxes of course).

 

While pure sales may have drastically declined, they bolster a MUCH better pay-out rate for all people involved. On average, the performing artist receives $2.30-$2.64 per digital/physical copy sold. With pure sales of ASIB standing at 708,000 copies as of today, it has so far generated a revenue of more than $1,700,000 already in the same span of time. In addition to that comes revenue from track sales ($0,23 per sold track for the performing artist), meaning that Shallow alone generated an additional $120,000 and single sales of ASIB have generated more than an addtional $250,000 for the artists. The label of course operates at a MUCH better profit than the artists themselves. On top of that, songwriting royalities also kick in. Though comparatively much less than performing royalities, a pay-out rate of $0.091 that will be shared among the songwriters per sold track amounts to a lot more than the pay-out rate Spotify offers to songwriters.This is where it gets a lot more complicated though since songwriters are in guilds and privately agree on how the money should be split. Assuming that Gaga has taken a 40% share of writing Shallow (with her other 3 collaborators taking a 20% share respectively), the song would have generated her an additional $18,000 of revenue. For comparision: very recently a German songwriter came forward anonymously about her earnings and she said that as a songwriter, 100 million streams on Spotify essentially translate to a revenue of 650€ (approx. $745 as of today January 12th 2019).

 

So even now that streaming is inevitable, and pure sales are crashing harder than ever, they are still more profitable. They still provide the backbone to the music industry, since streaming itself can't carry it and probably will need a LONG time to be able to carry it. It's also interesting to note that despite Spotify growing exponentially, the company is still not making profit and has amassed a SHOCKING amount of debt. Do you think way streaming works right now will last? (I personally think it will collapse sooner or later and wreck serious damage upon the industry.) Also, I am NOT surprised that nowadays so many musicians take up side projects. Using your celebrity to diversy your portfolio is an econimically smart decision and at the end of them, it's also a much more reliable source of income at the end of the day.

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Princedele25

Hello from the other siiide

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Arthoe
2 minutes ago, Princedele25 said:

Hello from the other siiide

The way Adele literally earned $26,000,000 from 25 album sales alone. :deadbanana2:

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Caesar

Depending on the artists

 

If you have multiple billion streamed albums like Ari then you'll be set

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FrederickSpears

Yeah, this is true BUT I don't see Spotify ever collapsing. A LOT of big sites like Spotify, Netflix, etc. are in massive debts before they see a profit and can pay it off but it will happen. Netflix is good now I believe but they were the same way for years even while popular.

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Arthoe
4 minutes ago, Caesar said:

Depending on the artists

 

If you have multiple billion streamed albums like Ari then you'll be set

She is earning good money, but if you guesstimate the earnings, the 2.8 billion streams of Dangerous Woman just only made 150k more than the pure sales of ASIB. (No shade to Ari, she's in my sig and I bought every album of hers. :date3:)

 

I'm not saying this to shade any artists, but I'm also thinking about how hard up and coming musicians will have it to like.. make a living doing what they love without ending up in life crippling debt. :emofish:

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Cryptique

webeenknew.. that's why we need artists to tour cause that's where the money at and endorsements of course

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iHype.

Pure sales overall, are not more profitable than streaming overall today. That is a full blown lie.

Screen_Shot_2018-09-20_at_2.45.42_PM.png

 

There are artists in particular who still get more from sales, because their projects haven't transitioned to streaming numbers as much as they have with sales, but that's not majority.

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Cryptique

from the data above:

 

Shallow sold: ~522k

ASIB Tracks sold: ~1.087M

 

:alexz2:

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NMiguelCosta

This is why Japan will surpass the US soon and become the biggest music market. And Korea has been growing a lot too every year. Streaming is unsustainable long-term and you'll see that when single and album sales die completely in the US and Europe. They'll just become progressively more irrelevant unless something changes. Glad all my faves do good both digitally and with physicals. 

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Arthoe
11 minutes ago, iHype. said:

Pure sales overall, are not more profitable than streaming overall today. That is a full blown lie.

Screen_Shot_2018-09-20_at_2.45.42_PM.png

 

There are artists in particular who still get more from sales, because their projects haven't transitioned to streaming numbers as much as they have with sales, but that's not majority.

This is "total" revenue generated, regardless of who the money goes to (meaning this includes all the money streaming services actually keep in their own pockets and don't give to the artists/labels) Also, this thread is specifically about artists, a case study if you will. :cm:

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Mother Earth
12 minutes ago, iHype. said:

Pure sales overall, are not more profitable than streaming overall today. That is a full blown lie.

Screen_Shot_2018-09-20_at_2.45.42_PM.png

 

There are artists in particular who still get more from sales, because their projects haven't transitioned to streaming numbers as much as they have with sales, but that's not majority.

I think you're missing the point. OP is saying that the artists/labels that get more sales than streams make more money than artists that are stream-dependent. OP is not saying that sales are a majority of a label's revenue or that sales make labels their money.

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Arthoe
4 minutes ago, Mother Earth said:

I think you're missing the point. OP is saying that the artists/labels that get more sales than streams make more money than artists that are stream-dependent. OP is not saying that sales are a majority of a label's revenue or that sales make labels their money.

Thank you for putting this very nicely and precisely into words :clap3:

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WayTooHonest13
19 minutes ago, iHype. said:

Pure sales overall, are not more profitable than streaming overall today. That is a full blown lie.

Screen_Shot_2018-09-20_at_2.45.42_PM.png

 

There are artists in particular who still get more from sales, because their projects haven't transitioned to streaming numbers as much as they have with sales, but that's not majority.

But no one said the majority of the revenue of the music industry doesn't come from streaming. That wasn't the point the OP made at all. You're talking about the revenue from the music industry overall while the OP is talking about royalties from artists

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Soda Pop Queen

lol either way you slice it, the artist is generally the last person to get paid and gets the least amount of money unless they have good publishing or no middle-men (independent acts). This is why popular acts stay on tour, especially in the last 10-15 years. Endorsements and property investments also greatly help. The only people making the majority of their money from music sales/streams alone are singer-songwriters (especially with credits on other people's hits) and producers.

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iHype.
16 minutes ago, Mother Earth said:

I think you're missing the point. OP is saying that the artists/labels that get more sales than streams make more money than artists that are stream-dependent. OP is not saying that sales are a majority of a label's revenue or that sales make labels their money.

Which would also be a lie. Top earning/big 3 labels are: Universal Music Group, Sony Music, and Warner Music Group.

 

Their revenue breakdowns:

IMG_1057.jpg

IMG_1060.jpg

IMG_1058.jpg

Warner: $863 million streaming revenue vs. $424 million physical + digital sales revenue.

Sony: $944 million streaming revenue vs. $694 million physical + digital sales revenue.

Universal: $1.437 billion streaming revenue vs. $734 million physical + digital sales revenue.

 

All the OP pointed out was that one pure sale makes more than one stream... which is well, duh. However billions of streams adds up to more total revenue than thousands of sales. 

 

As said, this is why in result, the overall industry earns more from streaming. A few artists make more from sales, however that's a minority, and since sales decline 20%+ every single year, each year, their revenue will beome smaller. In comparison? Streaming-leaning artists will earn more each year, as streaming grows in volume and revenue.

 

 

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Bloo

I mean... duh. Paying $10 for an album is going to be more profitable than paying $10 to stream millions of songs.

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iHype.
18 minutes ago, WayTooHonest13 said:

But no one said the majority of the revenue of the music industry doesn't come from streaming. That wasn't the point the OP made at all. You're talking about the revenue from the music industry overall while the OP is talking about royalties from artists

 

The OP points out that one sale earns more than one stream for an artist, as said, that's duh. However billions of streams earns more revenue than thousands of sales, which is the reality for the industry currently. Artists, labels, and creators earn more revenue in general with streams now.

 

OP used A Star is Born earning more revenue for sales as an example, however that's not a good example. Why? Because A Star is Born's sales are not a general trend, they are an outlier. Only 1 other album period in 2018 sold that much (Greatest Showman).

 

The general trend, which can be seen by looking at album equivalents, has 95% of artists generating more from streaming. The entire purpose of album equivalents is to show how much streaming generates in equivalent to sales. 

 

Yes, power to an artist if they still generate more from sales, however its not really where an artist wants to be logically. Why? Sales decline 20%+ each year, meaning everytime a sales-heavy artist releases an album, it will sell lower and lower. (A Star is Born would've sold 3x as much 10 years ago.) Thus with less and less sales, they will generate less and less revenue from each release. However a streaming-heavy artist has the advantage of growing revenue every release. 

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Can't_M!ss_This

I think it’ll be very important for acts to make sure their contracts are fair when it comes to streaming revenue. During this transition period, older contracts probably haven’t been fair since they were signed when internet sources were next to nothing and probably assumed by the artist to be second rate to their sales earnings. 

 

I do wonder how long it’ll be before streaming prices increase. We’ve seen it with Netflix. If you want multiple devices, HD and now 4K, you pay more. I’m sure once the music streaming industry matures, we will see services raise prices and offer tiers depending on usage and maybe even content. But you’ve got to become a way of life before you can do that. Netflix is seen as almost essential so they can bump prices and play their hand more than Spotify and  Music can. 

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ChampionCynthia

Touring is where the money is at for artists. It’s not like they made that much money from pure sale either, most of it goes to the record label

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Thuggin
3 hours ago, Arthoe said:

She is earning good money, but if you guesstimate the earnings, the 2.8 billion streams of Dangerous Woman just only made 150k more than the pure sales of ASIB. (No shade to Ari, she's in my sig and I bought every album of hers. :date3:)

 

I'm not saying this to shade any artists, but I'm also thinking about how hard up and coming musicians will have it to like.. make a living doing what they love without ending up in life crippling debt. :emofish:

Don’t forget Apple Music and YouTube though

 

But yeah, streaming services definitely don’t pay their artists enough

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Almighty Gaga

Good to stan someone that has both then 

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KillingYourCareer

Wait, so... if $0.0038 is the average pay for one stream, why is the sales-equivalent ratio 150:1 and not 265:1 (aka the amount to add up to $0.99)?

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Taylor fanboy
7 hours ago, iHype. said:

Pure sales overall, are not more profitable than streaming overall today. That is a full blown lie.

Screen_Shot_2018-09-20_at_2.45.42_PM.png

 

There are artists in particular who still get more from sales, because their projects haven't transitioned to streaming numbers as much as they have with sales, but that's not majority.

You missed the point entirely.

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