0 Example:
Spotify, Pandora, Amazon Prime and Apple Music are examples of streaming service companies.
1 These companies have a huge _______________ , which the listener can listen for free.
2 Premium members of Spotify can enjoy unlimited access to _______________ for $10 a month.
3 We must differentiate between streaming music and the _______________ .
4 iTunes takes _______________ of the price the user pays.
5 The money the label pays the songwriter is called _______________ , which is about 8 cents per song.
6 The artist usually gets between _______________ percent of the list price.
7 The artist usually has to pay back _______________ to the record label for publicizing.
8 Taylor Swift makes about $3 _______________ , download or physical record.
So let’s start off with just explaining how streaming music works. So there are many different streaming service companies out there. Uh, the most famous being Spotify, Pandora, uh, Amazon Prime and now most recently Apple Music is joining the group and most of them are free listening so they have a huge library of music and, uh, a listener can sign up and listen for free as long as they’re willing to hear advertisements once in a while. But most of the services like Spotify, you can upgrade to a premium membership which usually charges about $10 a month and that is for unlimited access to ad-free music.
Hmm, and if you think about what your music budget, what your entertainment budget is for the month, $10 a month for unlimited music, you know, for the price of a CD a month is just astronomically a good deal for, uh, listeners.
Sure. It is a great deal from the listener’s point of view but, uh, I wonder what it’s like for the artist. Uh, Sam, can you tell us a little bit about the digital download model versus this new streaming model?
Yes. So digital downloads have been a long, uh … around for a long time as well and, uh, they’ve started to see … they had their controversy from when they initially started as well. Let’s get an idea, say, you buy a download off of iTunes. So iTunes takes it cut which is about 30% of the list price and then they remit the rest of that to the label then the label pays the songwriter, the songwriter, I think, that’s not the performer and necessarily, not all of the time it’s called a mechanical royalty which is typically about 8 cents per song. So for a 10 song album, you get about 80 cents for the download. Um, then the label also has to pay the artist who is signed to their label, um, is not necessarily always the same person. As I said, it’s the songwriter so the royalty that’s typically between 12 to 18 percent of the list price. So on a $10 list price of a download say, the artist would see about a dollar 50 per download. Now, also the artist has, remember–that is signed to that label, also has to payback depending on what their contract said, um, marketing costs back to the record label for, um, publicizing, uh, recouping some of the cost that the label has already spent to market their record in the first place. So, around $1.50 per download which doesn’t, say, seem like a lot but it’s something. At least they could make something from it. So for artists and especially for big artists like Taylor Swift who writes and co-writes the majority of her music anyway, um, she’s one of the rare artists who she of course recoups the money that her label spends on making the record and marketing her records as well. Uh, so she’s set in the vicinity to make about $3 per record sold, um, download or physical record sold and when we’re talking the millions and millions and millions that Ms. Taylor sells, she’s making herself a lot of money.
Key:
1 library of music
2 ad-free music
3 digital download model or digital downloads
4 30%
5 (a) mechanical royalty
6 12 to 18
7 marketing costs
8 per record sold
