As we said above, their artists would suffer from the loss of distribution, but they’d also suffer a loss of revenue.
Not much revenue. Spotify is famously stingy in how much it pays artists, to the point where big names like Taylor Swift are keeping their releases off Spotify.
If you are completely independent the amount you get per play (before your distributor - e.g. CDBaby - takes a cut) is $0.006 - $0.008. If we say you get the max per play and you're a one person act (not a band) you need about 250,000 streams to make $2000 (just about enough money to live on). Obviously you have other ways to generate income (merch, touring) but even getting anywhere near that number of monthly streams for an independent artist with no marketing power/skill/money is almost impossible regardless of how good your work is.
If not going to get into the usual debate about free market and value but I thought it was worth laying out some actual figures as 'labels are taking the money' is the go to argument here when in reality having no label isn't going to work for most artists either.
NB: To get your music on all of these digital services you need a distributor like CDBaby (many others are available). I left out their cut in the figures above but for digital services it is 9% of net income.
If I understood it correctly about 50% (old and perhaps quite obsolete figure) of the monthly fee goes to labels and artists.
That sounds reasonable to me, and given that that means roughly $5 goes directly to labels and artists from my subscription.
A Spotify subscription is more than I have ever paid for music, even half of it is - and the moment I stop my subscription I loose access to all of it. To me it sounds like the labels are the ones dictating, one way or another, who get's paid and how much.
If I understood it correctly about 50% (old and perhaps quite obsolete figure) of the monthly fee goes to labels and artists
Yes, but which labels and artists? There is a notion that people have that when they listen to Spotify, Spotify takes their $10/mo and divides it up among the artists that they've listened to. That's not how it works. Spotify takes the money, puts it into a giant pool and divides it up globally based upon total number of plays.
So, for example, let's say I'm a huge fan of Portugal, The Man. I listen to them, and only them, all day, every day. That doesn't mean that they get my $10 a month. They get paid in proportion to what percentage they are of the total number of Spotify plays. If I'm the only one listening to Portugal, The Man, then they're not going to be a high percentage of total plays, and they're not going to get even $10 for the month.
Meanwhile, lets say that Kanye West drops a new album, and he skyrockets to 60% of all listens. He's going to get 60% of the money, even from people like me who haven't listened to any of his music during the month.
Now, you might argue that this is a fair solution. But it does explain why a lot of smaller artists (and big names too, like Taylor Swift as mentioned above) are very wary of Spotify.
I'm not sure I understand. The numbers I quoted were for someone not signed to a label. They get the stream rate that Spotify sets. Your original question was do artists not make much money because of bad deals with labels. The numbers clearly show that they don't make much money even if a label isn't involved because stream rates are less than 1¢ and subscription prices are very low.
It isn't hard to imagine that spotify needs to recoup the costs lost by having to please the labels. My point was that I'm paying a fair price and Spotify are relaying a fair share of that.
Now where the money actually ends up seems to be up to the labels.
Not much revenue. Spotify is famously stingy in how much it pays artists, to the point where big names like Taylor Swift are keeping their releases off Spotify.