Spotify, Rdio, MOG: The Future (and Present) of Music

Author: Micah Singleton
Published: November 25, 2011 at 5:45 am

 

It was a little over 12 years ago when Napster disrupted the music industry and changed the way we would forever listen to music. Then came Apple and iTunes to save the day, along with the major labels stratospheric, albeit declining profits. Then came the paid streaming services. Apple can’t save them now. Spotify, Rdio, MOG, and Rhapsody have once again brought back the all-you-can-eat platform, this time legally, and now labels and artists are complaining that Spotify and similar services have become detrimental to music revenues. For artists who are getting sub-par payouts, blame the label not the service.

When services like Spotify and MOG pay the labels, artist royalties are not consistent; the artists get payed according to their contracts with the label. In an interview with Fast Company, MOG chairman David Hyman explained the payment system, based on a $10 per month scale:

“Out of every $10, we pay a percentage to the label. I won't give you the exact number, but let's say the labels got $6. They split that $6 amongst themselves based on frequency of plays. In a given month, we tell them, 'Hey Warner [Music Group], you were 30% of plays. You will get 30% of that $6 now.' So let's say we have 1 million subscribers. So Warner would get 30% of that $6 million that month. All the labels split from that pie."

Coldplay kept Mylo Xyloto, their most recent release off of streaming services. No reason was given for the move, but speaking to Mashable, their label EMI stated, “We always work with our artists and management on a case-by-case basis to deliver the best outcome for each release.” On  a side note, Bloomberg reported back in July that the four “major labels” including EMI are shareholders in Spotify.

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