Read Damon Krukowski’s “Making Sense” for some perspective on Pandora and Spotify:
Consider Pandora and Spotify, the streaming music services that are becoming ever more integrated into our daily listening habits. My BMI royalty check arrived recently, reporting songwriting earnings from the first quarter of 2012, and I was glad to see that our music is being listened to via these services. Galaxie 500’s “Tugboat”, for example, was played 7,800 times on Pandora that quarter, for which its three songwriters were paid a collective total of 21 cents, or seven cents each. Spotify pays better: For the 5,960 times “Tugboat” was played there, Galaxie 500’s songwriters went collectively into triple digits: $1.05 (35 cents each).
This is why I still buy albums on iTunes. If I like an album I want to own it and give compensation to the artist. And the best, easiest way to do that is still by buying the album. Ad-supported music services don’t do this so well. My belief is that these other services are unsustainable.
I always find it odd when I hear ads on Spotify telling me to listen to more music on Spotify. We can make an educated guess that the company is already losing money – that’s why it just took $100 million from Goldman Sachs and $10 million from Coke. So how do ads saying “hey, use Spotify more!” make any sense? It must be they’re trying to annoy you enough with ads to get you to switch to a paid subscription.
What’s even weirder is when I hear ads for things like Bonobos. I’ve always wondered how effective those ads are. If you’re listening to a good song over Spotify you’ll probably be receptive to paying 99¢ to buy it. But no – let’s see if they want pants.
Apple is supposedly going to come out with a Pandora-like music service in which you get radio-type music playback powered right from the iTunes Music store. My guess is that it won’t have advertising. I think it’ll have a button that you click to add the currently playing track right into your music collection for 99¢.
Isn’t that a way better model than hoping someone clicks an ad for something completely unrelated to music?