The Internet Empowered Artist? What 1 Million Streams Means To You! #sxsw

Is this the future of music? We continue to explore artist revenue streams.

Here’s what 1 million streams looks like from different revenue perspectives on the two largest and mainstream streaming services.

Service  Units Per Unit  Total  Notes 
Spotify 1,000,000 $0.00521 $5,210.00 Gross Payable to Master Rights Holder Only
Spotify same million units as above $0.00052 $521.00 Gross Payable to Songwriter/s & Publisher/s (est)
YouTube 1,000,000 $0.00175 $1,750.00 Gross Payable for All Rights Video, Master & Publishing
YouTube CMS Master Recording (Audiam / AdRev) 1,000,000 $0.00032 $321.00 Gross Payable to Master Rights Holder Only
STREAMING TOTALS  3,000,000 $7,802.00 TOTAL REVENUE EARNED FOR 3 MILLION PLAYS ON SPOTIFY AND YOUTUBE 
Itunes Album Downloads 1,125 $7.00000 $7,875.00 Gross payable including Publishing

Here are some compelling stats on the break down of what percentage of videos on YouTube actually achieve breaking the 1 million play threshold, only 0.33%

CHART OF THE DAY: Half Of YouTube Videos Get Fewer Than 500 Views | Business Insider

Some 53% of YouTube’s videos have fewer than 500 views, says TubeMogul. About 30% have less than 100 views. Meanwhile, just 0.33% have more than 1 million views.

That’s not a huge surprise. But it highlights some of the struggles Google could have selling ads around all those unpopular videos, despite the money it has to spend to store them.

An artist needs to generate THREE MILLION PLAYS on the two largest and most popular streaming platforms to equal just 1,125 album downloads from Itunes. This is an important metric to put in context. In 2013 only 4.8% of new album releases sold 2,000 units or more. So if only 4.8% of artists can sell 2,000 units or more, how many artists can realistically generate over four million streams from the same album of material?

in 2013 there were 66,565 new releases, only 3,237 sold more than 2,000 units = 4.8% of new releases sold over 2,000 units

in 2013 there were 915,482 total releases in print, only 14,856 sold more than 2,000 units = 1.6% of ALL RELEASES in print sold more than 2,000 units.

This is even more important when you start to consider that many artists feel that growing a fan base of just 10,000 fans is enough to sustain a professional career. Note we said solo artists because these economics probably need to be multiplied by each band member added for the revenue distribution to remain sustainable. So a band of four people probably need a sales base of 40,000 fans to sustain a professional career for each member of the band.

Each 10,000 albums sold on iTunes (or 100,000 song downloads) generates $70,000 in revenue for the solo artist or band. To achieve the same revenue per 10,000 fans in streams, the band has to generate 30 million streaming plays (as detailed above) if they are distributing their music across the most common streaming services including Spotify and YouTube.

In 2013 the top 1% of new releases (which happen to be those 620 titles selling 20k units or more) totaled over 77% of the new release market share leaving the remaining 99% of new releases to divide up the remaining 23% of sales.

This appears to confirm our suspicion that the internet has not created a new middle class of empowered, independent and DIY artists but sadly has sentenced them to be hobbyists and non-professionals.

Meanwhile the major artists with substantial label backing dominate greater market share as they are the few who can sustain the attrition of a marketplace where illegally free and consequence free access to music remains the primary source of consumption.

What’s worse is that it is Silicon Valley corporate interests and Fortune 500 companies that are exploiting artists and musicians worse than labels ever did. New boss, worse than the old boss, indeed.

So whose feeling empowered?

RELATED:

If the Internet is working for Musicians, Why aren’t more Musicians Working Professionally?

Artists, Know Thy Enemy – Who’s Ripping You Off and How…

Over 50 Major Brands Funding Music Piracy, It’s Big Business!

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3 thoughts on “The Internet Empowered Artist? What 1 Million Streams Means To You! #sxsw

  1. I don’t know if anyone is writing about this but it is interesting that the collapse of the middle class economically in this country in the last decade coincides with the collapse of the middle class musician and the rise of free downloading and now streaming.

    Just like there is a 1% economically so there is the 1% artist in the music industry.

    A few haves, a shrinking middle class, and a whole lot of have not’s.

    Think about how much the top artists are able to sell concert tickets for.

    I just don’t think it’s a coincidence. Do you?

  2. Just wandered in here. There’s a very strong… let’s say editorial bent to this site, but the raw numbers are interesting.

    Youtube is a mess. The biggest problem imo is the full album streams, which on the half dozen artists I checked often have pulling 2x-3x the Spotify stream numbers and don’t pay the artist a dime. Hopefully official streaming will crowd much of that out. Unfortunately it’s been delayed for more than half a year now. Somebody should make a company to crowdsource reporting the illegal ones, without trying to monetize. Pay $100 to pull all of the high traffic pirate videos. Sucks that it has come to this.

    That said, I have to think the indie this site got Youtube CPM numbers from needs to join a content network, hook up with Vevo, etc. The small gaming channels I’m most familiar with regularly report being in roughly the .05-.010 range (see yttalk.com). Vevo publicly claims rates of .01-.03 constantly, and while I’m sure that’s a major label-only rate, at one point I saw a few indies suggest they get in the range of $003-$.004, which is an improvement. Really indies need their own content network for bargaining power.

    Songwriter & publisher cuts are a mess, as are the shares artists in general are getting from their labels. Going to have to be some lawsuits. (Already are in Europe, right?)

    But I’d look at the Spotify numbers in a different frame. Some of the indie downtempo artists I like have .5m-1.5m album streams on their newest albums there. With 10 tracks per album on the low end, that’s 5-15m streams. That’s $25-75k, looking more like a real salary. If they could double it up on Youtube/Pandora/Google Play/etc., etc., they’re looking at $50k-$150k, with more still coming in.

    These are guys who are still playing small clubs, maybe midsize clubs in the biggest 5-10 US cities when they go on tour. That’s pretty much always been the cutoff for going pro, no?

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