Why Century Media Is Right Pulling Out Of Spotify And Why They Should Pull Out Of Others Too

I have long been a critic of record labels following the status quo that hasn't been working too well for them. Especially in a day when the services a record label provides to bands can be found elsewhere and at a more beneficial cost to the artist. My ears perked up last week when I read that Century Media Records had the audacity to pull their catalog off Spotify. Spotify has been billed as the savior of all things music so my interest was a bit piqued as to how the label thought it could survive moving forward.

Soon after Century Media withdrew from Spotify, Metal Sucks tore the label a new arse for wanting to go back into the stone-age. The problem with the Metal Sucks article is they didn't look at the numbers behind the Century Media decision. The online distribution stores have become increasingly greedy, more so than the labels which is hard to believe.

A band signed to a label like Century Media stands to make about $.09 for each song downloaded from iTunes, Amazon, Napster, etc. If a fan streams the song only from last.fm, Rhapsody, the band receives $.002 - $.00075 per song streamed. The band would need to stream over 100 songs just to make up their petty income that they make from iTunes. The latest and greatest thing out there, Spotify only pays $.00029 per song to the bands. A small band with only one member would need to have over 4 million songs streamed every month with Spotify to be above the poverty line.

Spotify pays only a quarter of what the other streaming services pay to the bands on their service. Last year, Lady Gag's people revealed that Lady Gaga was paid $167 from Spotify for 1 million plays of "Poker Face." All that Century Media is doing by holding out is negotiating. Hopefully this tactic will work and other labels will follow. Labels are in the business of selling music, as are the bands. Hopefully Spotify will come around and increase payouts to be more inline with other streaming services.

Yes, Century Media's decision could have an effect on exposure their bands might receive. But Spotify hasn't officially been released in the U.S. yet so that point is mute for now.

I do find it a bit comical that a record label is complaining about being screwed over, however right their are in this case.



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Tags:  Century Media Records, Spotify   

Jason Fisher    August 10, 2011