Pure Adrenaline 1,518 Posted May 19, 2015 Share Posted May 19, 2015 Key highlights:1. Spotify paid Sony Music up to $42.5 million in advancesIn section 4(a), Spotify agrees to pay a $25 million advance for the two years of the contract: $9 million the first year and $16 million the second, with a $17.5 million advance for the optional third year to Sony Music. The contract stipulates that the advance must be paid in installments every three months, but Spotify can recoup this money if it earns over that amount in the corresponding contract year. According to a music industry source, labels routinely keep advances for themselves."A lot of the time, money that is paid outside of the direct usage doesn’t end up getting shared."2. Sony’s Most Favored Nation clause keeps those advances rising3. Sony Music was given up to $9 million in ad spots on Spotify which it could sell for profit4. How does Sony Music make money from Spotify?Section 10 shows how Sony Music separated its label fees into three distinct tiers — the ad-supported free tier, online day passes (which no longer exist), and Spotify’s premium service. In each of those segments, Sony Music can pull in a revenue share fee that is equal to 60 percent of Spotify’s monthly gross revenue multiplied by Sony Music’s percentage of overall streams. (So if Spotify earned $100 million in gross revenue, the labels would would get $60 million. If Sony Music made up 20 percent of the streams, it would take home $12 million.)The contract has what’s known as the usage-based minimum and per subscriber minimum, covering the free and paid tiers, respectively. If the royalties from usage in any particular month are greater than what is paid out by the revenue share, Sony Music gets that amount instead.5. STREAMING PAYOUTS ARE SUBJECT TO A VERY COMPLEX FORMULAThe premium tier’s per subscriber minimum takes Sony Music’s label usage percentage and multiplies it by the number of premium subscribers on Spotify, multiplied by $6.00. Once again, this model is used only if the total payout exceeds the revenue share.6. How much do artists get paid?Sony Music is likely getting considerable payouts from Spotify each year, but what it does when it gets that money — and how much of those payments actually make it down to the artists — is still unknown. Some artists have clauses in their contracts to get a larger share of the streaming revenue, and some artists are still operating under CD-era contracts that only give them 15–20 percent of their streaming revenues.In the wake of Swift’s departure from Spotify, many musicians rallied to her cause, vilifying streaming services that paid a fraction of a penny per play. But this contract makes it clear — the pay per stream rates aren’t the only issue. According to its financial disclosures, the majority of Spotify’s revenue, around 80 percent, has been flowing out the door to the rights holders. "You can’t squeeze blood from a stone," said David Pakman, the former CEO of eMusic and partner at Venrock. "Your beef can’t be with Spotify anymore." At least not with Spotify alone. http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract It's much more fun to have hizophrenia... u never get lonely Link to post Share on other sites More sharing options...
Supersonic 49,376 Posted May 19, 2015 Share Posted May 19, 2015 So that's where Taylor's money went Link to post Share on other sites More sharing options...
Didymus 34,379 Posted May 19, 2015 Share Posted May 19, 2015 lmfao, I love this. The labels being at fault instead of the streaming services. Sony going dooooown hawrd tho Werk. Link to post Share on other sites More sharing options...
Tove Lo 2,481 Posted May 19, 2015 Share Posted May 19, 2015 I'm doing school and don't feel like reading this all. Basically someone just tell me if this is good or bad for artists and all that. hop on that **** like a maniac Link to post Share on other sites More sharing options...
Serendipity 7,821 Posted May 19, 2015 Share Posted May 19, 2015 Somebody please summarize this, I don't understand this too well See talent here-->http://bit.ly/2eqeUxK Link to post Share on other sites More sharing options...
xoxo cupcakke 4,781 Posted May 19, 2015 Share Posted May 19, 2015 I'm doing school and don't feel like reading this all. Basically someone just tell me if this is good or bad for artists and all that. It's bad because a lot of Spotify's revenue is going to Sony apparently. That's what I got from it and also it is not known what Sony exactly does with that revenue So Spotify isn't enemy No. 1 anymore because it's Sony. What a strange turn of events Link to post Share on other sites More sharing options...
Blue Jeans 3,815 Posted May 19, 2015 Share Posted May 19, 2015 I feel like Spotify Leaked this on purpose Destiny is for losers. It’s just a stupid excuse to wait for things to happen instead of making them happen Link to post Share on other sites More sharing options...
Serendipity 7,821 Posted May 19, 2015 Share Posted May 19, 2015 I feel like Spotify Leaked this on purpose Spotify trying to play victims, I see See talent here-->http://bit.ly/2eqeUxK Link to post Share on other sites More sharing options...
Echo 327 Posted May 19, 2015 Share Posted May 19, 2015 It's actually the label hahaah Link to post Share on other sites More sharing options...
Jenniferella 2,774 Posted May 19, 2015 Share Posted May 19, 2015 I feel like Spotify Leaked this on purpose No kidding "I have been writing LG5 since I was 13" Link to post Share on other sites More sharing options...
FFXSoul91 1,098 Posted May 19, 2015 Share Posted May 19, 2015 I don't think anyone should be surprised that the labels are at fault. That's why I think TIDAL is so misguided. It's just another form of evil for labels to manipulate. Link to post Share on other sites More sharing options...
Pure Adrenaline 1,518 Posted May 19, 2015 Author Share Posted May 19, 2015 So that's where Taylor's money went taylor is on independent label tho .... it;s not that she didn't get money, she just wanted more It's much more fun to have hizophrenia... u never get lonely Link to post Share on other sites More sharing options...
Supersonic 49,376 Posted May 19, 2015 Share Posted May 19, 2015 taylor is on independent label tho .... it;s not that she didn't get money, she just wanted more Indie queen Charlie who? Marina who? Link to post Share on other sites More sharing options...
Pure Adrenaline 1,518 Posted May 19, 2015 Author Share Posted May 19, 2015 Indie queen Charlie who? Marina who? she basically made the Machine records no wonder why they let her go full pop this time and ditch the country It's much more fun to have hizophrenia... u never get lonely Link to post Share on other sites More sharing options...
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