http://www.techradar.com/news/computing ... es-1136132

I can see why Apple made an offer but they do not have to accept. Apple should pay more for a streaming service, though why are Pandora getting a cheaper deal than Spotify? They should all be paying the same rate.

The music industry seems unfamiliar with the concept of 'negotiation'.

Yes and do not even seem willing to even negotiate in good faith. Though Apple's offer is lowballing so i would have rejected it. If the terms are 18c for 100 songs tell Apple that they should start at that level and if they want more artists then top the Spotify deal. That way the artists get more from the deal. Though I personally prefer CD's as that gives the artists the highest percentage royalty rates.

It's still only 8% of the trade price & even then that's only paid after the initial advance is paid back (from that 8% share)

Only for most artists I think Madonna and the really big acts get higher rates. Though even the 8% is higher rate than what they get from Spotify.

don't forget they will have to pay for the production of the album, distribution and advertising. So effectively most artists will get sweet FA from any royalty payment.

I seem to recall reading a breakdown of music industry finances that showed that you sell a million copies of an album that took two years to make, the artists would actually make more money if they spent those two years working in McDonalds. The record company would make millions.

It is also why with new artists I will buy the CD from the artist direct. I do with a german artist that I like. Artists could act as their own distributers through various sites.

TBH these days most small artists don't need a record company any more.

We run our own "record label" and management company. We sell CDs at gigs and through our website, and digital downloads via one of the big aggregators. Because the downloads are done off the back of the CD production essentially the cost to us was zero, so even though iTunes/Amazon etc. and the aggregator take their cuts, for us it's essentially money for nothing.

We are well organised when we go into the studio so recording costs are minimal, and we've made extensive use of friends, fans and our own abilities to keep the costs down for the photography, graphics and making the promo video.

At the moment we're gigging nearly every week and are currently organising a 2 week European tour for later in the year.

If you've got the time and energy put a proper effort into the non-musical aspects there's no reason why a well-organised band can't do most of the work themselves without the need for a traditional style record contract.

Exactly but if your music was on Spotify or Pandora the royalties would be minimal because of the royalty rate. At least the BBC pay a far larger sum for each record played, even if it just once.


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When the BBC plays a record, it might be a million people that hear it - a million listens. If I listen to it on Spotify, I'm only one person - 1 listen. It wouldn't make sense to charge anything like the same rate.

Yes but over a year it would add up on Spotify. Even so I think that a single Radio play gets somewhere between £6 and £25 for the artist. Though Bieber probably gets dozens of plays a day for several weeks a single is out, so that adds up.


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Remember here (for radio and internet broadcast) we're talking about performance royalties as opposed to sales royalties.

In our case, physical sales royalties don't really exist because we are our own label and we do our own physical distribution via gig and mail-order sales, so everything minus the manufacturing costs goes straight back into the band - there's no actual record company or distributor to take any cut of that.

For the performance royalties, IIRC the rates paid by radio and TV are based on average audience sizes, whereas the the streaming rates are per individual listen. I'd have to look at the PRS per minute figures and divide them by the audience size to get a "per listener" rate. However I believe that the Spotify and other streaming services rates are still quite a bit lower.

Also the majority of performance royalties go to the writers of the songs rather than the performers - not that it's an issue in the case of my band since everything is split equally between all for members.

Quite a few bands like Coldplay split writers royalties amongst all the band, even though most are written by one or two in a band.

There was a breakdown somewhere of royalty rates from CD's to radio and Spotify. Spotify was magnitudes lower than CD 's. With one of my favourite techno artists I pay around €10 per CD direct to the artist, rather than €6,99 for a download. So the artist still gets more than from a label.


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