MPs to investigate whether artists are paid fairly for streaming music

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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by CS70 »

blinddrew wrote: So if you take CS70 and DC Choppah's suggestion of limiting supply, it's still not going to change that payment.

Just to clarify: "limiting supply" in this context meant simply that - if someone wants a track, a book or a car - stealing it is not an option (or is an option the same way as with any other product - it's a crime, and if you're caught, you face consequences).

That said, it's not a given at all that this has an effect on the payment - because payment depends on both supply and demand, and enforcing the market rules does not produce additional demand (or there's not much demand in the first place), the payment will stay the same.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by blinddrew »

It's been a long week and i'm really not following some of your positions and points here, so to cut to the chase, do you think that the streaming services offer fair payments? And if not, what would be fair?
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by CS70 »

blinddrew wrote:It's been a long week and i'm really not following some of your positions and points here, so to cut to the chase, do you think that the streaming services offer fair payments? And if not, what would be fair?

Ahah, sorry! Having a glass of wine on the side helps.

I have no clear opinion yet, but mostly I do, yes. I think they offer fair enough payment given the current situation - same as you, I understand?

It's the current situation that is not fair. If - as DC mentions - the situation gets fixed, then they may have to increase payments (not sure, haven't made the math).

Apologies for the headache! :D
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by DC-Choppah »

Ok, lets take Spotify as an example to see how flawed the current system is. The fix is so simple too.

Spotify says that they pay 70% of the REVENUE to the artists. The key here is that the amount that artists gets is proportional to (70% of) the REVENUE that Spotify makes.

There is no fixed cost that Spotify pays for the right to copy your music. They do not simply pay a price for each mechanical copy they make, where the are duplicating and then transmitting the mechanical copy of your song to someone's device. The artist is cut into the game as a fractional stakeholder. If Spotify makes no money, you make no money. But Spotify can't lose. If everybody streams for free, then the artists gets zero, because revenue is zero. But Spotify still makes money on the advertising they sell while people come to hear all the free music. The artists gets zero, or a tiny fraction of the ad revenue. Spotify takes zero risk, and you the artists devalue your copyrighted properly at a massive scale. Do you see this?!? Please tell me you do!?!?

Follow the risk, not the money.

Now then, of the revenue that Spotify makes you get your fraction. So if your song was streamed 1,000 times, but total streams was 10,000,000 for that revenue period, then you get 1/10,000'th of the total revenue.

So the bigger their service gets, and the more customers they get, the less you get, even though your fan base may stay constant.

This business arrangement is completely exploiting the artist, while Spotify gets zero risk profit.

Now, how to fix it? Simple.

If you copy a song from your server to someone's device, you must pay the fixed rate for that copy. No fraction of revenue, no fancy math, you must pay for that copyright. That is what copyrights are for. You must take the risk that you will or will not recoupe the money.

I am NOT in business with you, and I don't want a deal that drives my share to zero over time as you grow, and devalues my music since you benefit by giving it away for free.

My only defense against the exploitive arrangement is that you must pay an upfront, fixed cost for the right to copy that music. I appeal to common sense that this is what copyright is for.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by DC-Choppah »

I realize that my line about a stream is the same is a download is tiring, but I mean this in a business sense.

The fact that the businesses (Spotify, Youtube, etc) have figured out a business plan that exploits the artist is because they have been able to make this clever distinction. That distinction (stream not download) allows them to avoid the cost of the mechanical royalty, and preserve for themselves a risk-free business plan, at the expense of the rights owners of the music.

The most expensive part of distributing music is the cost to pay the rights holders. By claiming that a stream is some magic 'something else', they cleverly get around the burden of paying a fixed cost and set them self up with a risk free business plan. The distinction is made for the regulatory/business purpose.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by blinddrew »

CS70 wrote:I have no clear opinion yet, but mostly I do, yes. I think they offer fair enough payment given the current situation - same as you, I understand?

Yep, pretty much. With the exception of youtube - the fact that they pay an order of magnitude lower than most of the rest suggests some under-cutting. But I guess they would argue they are a video platform not a music platform and have to spread their costs over a much wider base.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by blinddrew »

DC-Choppah wrote:Ok, lets take Spotify as an example to see how flawed the current system is. The fix is so simple too.

Spotify says that they pay 70% of the REVENUE to the artists. The key here is that the amount that artists gets is proportional to (70% of) the REVENUE that Spotify makes.

There is no fixed cost that Spotify pays for the right to copy your music. They do not simply pay a price for each mechanical copy they make, where the are duplicating and then transmitting the mechanical copy of your song to someone's device. The artist is cut into the game as a fractional stakeholder. If Spotify makes no money, you make no money. But Spotify can't lose. If everybody streams for free, then the artists gets zero, because revenue is zero. But Spotify still makes money on the advertising they sell while people come to hear all the free music. The artists gets zero, or a tiny fraction of the ad revenue. Spotify takes zero risk, and you the artists devalue your copyrighted properly at a massive scale. Do you see this?!? Please tell me you do!?!?

I don't, because I don't think your premise is correct. Yes, if Spotify makes no money, you make no money, but if everyone streams for free they still make advertising revenue, which is then distributed the same way as paid membership revenue. The artist gets the same cut of revenue regardless of source. It will be less if there are no paid memberships, but it won't be zero.

DC-Choppah wrote:Now then, of the revenue that Spotify makes you get your fraction. So if your song was streamed 1,000 times, but total streams was 10,000,000 for that revenue period, then you get 1/10,000'th of the total revenue.

So the bigger their service gets, and the more customers they get, the less you get, even though your fan base may stay constant.

Again, that's not quite correct, if the revenue grows as well as the user-base but your plays remain constant then you get a smaller share, but of a bigger pot. The question is, which grows larger? The pot or the user base?

DC-Choppah wrote:This business arrangement is completely exploiting the artist, while Spotify gets zero risk profit.

Something that they've only managed for one financial quarter.

DC-Choppah wrote:Now, how to fix it? Simple.

Take your music off Spotify? ;)

DC-Choppah wrote:If you copy a song from your server to someone's device, you must pay the fixed rate for that copy. No fraction of revenue, no fancy math, you must pay for that copyright. That is what copyrights are for. You must take the risk that you will or will not recoupe the money.

I am NOT in business with you, and I don't want a deal that drives my share to zero over time as you grow, and devalues my music since you benefit by giving it away for free.

My only defense against the exploitive arrangement is that you must pay an upfront, fixed cost for the right to copy that music. I appeal to common sense that this is what copyright is for.

Indeed, I remain very surprised that the major labels agreed to the 'share of the pot' approach rather than the standard principle of the per play licence. But it still leaves open the question of what the fair rate for that copy is, as I shall address in your next post...
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by blinddrew »

DC-Choppah wrote:I realize that my line about a stream is the same is a download is tiring, but I mean this in a business sense.

The fact that the businesses (Spotify, Youtube, etc) have figured out a business plan that exploits the artist is because they have been able to make this clever distinction.

It's not a 'clever distinction' it's a different set of physical properties. They are different things. Desmond, Sam and I have all been through this already on this thread. You've even said the same thing. Different things with different value propositions.

DC-Choppah wrote:That distinction (stream not download) allows them to avoid the cost of the mechanical royalty,

Because it is not a mechanical copy. It's a transitory stream. Something between radio play and download.

DC-Choppah wrote:The most expensive part of distributing music is the cost to pay the rights holders. By claiming that a stream is some magic 'something else', they cleverly get around the burden of paying a fixed cost and set them self up with a risk free business plan. The distinction is made for the regulatory/business purpose.

It is something else. You yourself articulate some of the ways in which it is something else in your post at the top of the previous page. I can't argue this again, so I'll just come back to the same question: what do you think is a fair rate for a stream?
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by DC-Choppah »

blinddrew wrote: I don't, because I don't think your premise is correct. Yes, if Spotify makes no money, you make no money, but if everyone streams for free they still make advertising revenue, which is then distributed the same way as paid membership revenue. The artist gets the same cut of revenue regardless of source. It will be less if there are no paid memberships, but it won't be zero.

Spotify concedes that advertising is a very small piece of revenue. The money is all in subscriptions. People are paying to have access to the pile.

Making money on advertising works when you give away access for free (Youtube) and have lax copyright enforcement that allows people to post other's works to add to the free access pile.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by DC-Choppah »

The first stream shall require 9.1 cents to be paid in mechanical royalties. This is based on the same penny rate as a download or other mechanical copy. The rate can change over time and is due for an increase.

The first time the work is streamed, the royalty is due. If the same stream happens in the future by the same person, then no royalty is due since that copy has already occurred. It is up to the distributor to determine who has and has not already received the song and which devices are theirs. The burden to prove that the person demanding the song has already received it is on the distributor.

If the distributor distributes the song to an unknown entity, then by default the royalty is due.

Anyone distributing songs must pay the royalty.

If you run a web site and allow people to post other's works and distribute them, you can argue amongst the host and the user who has to pay (different business models), but the copyright holder gets the royalty regardless since the distribution has happened.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by blinddrew »

I give up.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Post by DC-Choppah »

blinddrew wrote: Something that they've only managed for one financial quarter.

Because of the rampant violation of copyright and devaluation of music the product is rendered nearly valueless and hence there is no profitable business. It is self destructive.

blinddrew wrote: Take your music off Spotify? ;)

Because of the rampant violation of copyright and devaluation of music the product is rendered nearly valueless, regardless if you take your music off Spotify or not.

Sorry by 'it' I mean the devaluation of music as a whole. Obviously the problem with streaming is the devaluation of music as a whole, not a problem with a single distributor.

I am tracing the devaluation back to the source, and offering a remedy that is within the power of our officials to regulate.
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