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MPs to investigate whether artists are paid fairly for streaming music

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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby CS70 » Sat Oct 24, 2020 6:24 pm

blinddrew wrote:So if you take CS70 and DC Choppah's suggestion of limiting supply, it's still not going to change that payment.

Just to clarify: "limiting supply" in this context meant simply that - if someone wants a track, a book or a car - stealing it is not an option (or is an option the same way as with any other product - it's a crime, and if you're caught, you face consequences).

That said, it's not a given at all that this has an effect on the payment - because payment depends on both supply and demand, and enforcing the market rules does not produce additional demand (or there's not much demand in the first place), the payment will stay the same.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby blinddrew » Sat Oct 24, 2020 7:09 pm

It's been a long week and i'm really not following some of your positions and points here, so to cut to the chase, do you think that the streaming services offer fair payments? And if not, what would be fair?
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby CS70 » Sat Oct 24, 2020 7:19 pm

blinddrew wrote:It's been a long week and i'm really not following some of your positions and points here, so to cut to the chase, do you think that the streaming services offer fair payments? And if not, what would be fair?

Ahah, sorry! Having a glass of wine on the side helps.

I have no clear opinion yet, but mostly I do, yes. I think they offer fair enough payment given the current situation - same as you, I understand?

It's the current situation that is not fair. If - as DC mentions - the situation gets fixed, then they may have to increase payments (not sure, haven't made the math).

Apologies for the headache! :D
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby DC-Choppah » Sat Oct 24, 2020 7:41 pm

Ok, lets take Spotify as an example to see how flawed the current system is. The fix is so simple too.

Spotify says that they pay 70% of the REVENUE to the artists. The key here is that the amount that artists gets is proportional to (70% of) the REVENUE that Spotify makes.

There is no fixed cost that Spotify pays for the right to copy your music. They do not simply pay a price for each mechanical copy they make, where the are duplicating and then transmitting the mechanical copy of your song to someone's device. The artist is cut into the game as a fractional stakeholder. If Spotify makes no money, you make no money. But Spotify can't lose. If everybody streams for free, then the artists gets zero, because revenue is zero. But Spotify still makes money on the advertising they sell while people come to hear all the free music. The artists gets zero, or a tiny fraction of the ad revenue. Spotify takes zero risk, and you the artists devalue your copyrighted properly at a massive scale. Do you see this?!? Please tell me you do!?!?

Follow the risk, not the money.

Now then, of the revenue that Spotify makes you get your fraction. So if your song was streamed 1,000 times, but total streams was 10,000,000 for that revenue period, then you get 1/10,000'th of the total revenue.

So the bigger their service gets, and the more customers they get, the less you get, even though your fan base may stay constant.


This business arrangement is completely exploiting the artist, while Spotify gets zero risk profit.

Now, how to fix it? Simple.

If you copy a song from your server to someone's device, you must pay the fixed rate for that copy. No fraction of revenue, no fancy math, you must pay for that copyright. That is what copyrights are for. You must take the risk that you will or will not recoupe the money.

I am NOT in business with you, and I don't want a deal that drives my share to zero over time as you grow, and devalues my music since you benefit by giving it away for free.

My only defense against the exploitive arrangement is that you must pay an upfront, fixed cost for the right to copy that music. I appeal to common sense that this is what copyright is for.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby DC-Choppah » Sat Oct 24, 2020 8:03 pm

I realize that my line about a stream is the same is a download is tiring, but I mean this in a business sense.

The fact that the businesses (Spotify, Youtube, etc) have figured out a business plan that exploits the artist is because they have been able to make this clever distinction. That distinction (stream not download) allows them to avoid the cost of the mechanical royalty, and preserve for themselves a risk-free business plan, at the expense of the rights owners of the music.

The most expensive part of distributing music is the cost to pay the rights holders. By claiming that a stream is some magic 'something else', they cleverly get around the burden of paying a fixed cost and set them self up with a risk free business plan. The distinction is made for the regulatory/business purpose.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby blinddrew » Sat Oct 24, 2020 8:12 pm

CS70 wrote:I have no clear opinion yet, but mostly I do, yes. I think they offer fair enough payment given the current situation - same as you, I understand?
Yep, pretty much. With the exception of youtube - the fact that they pay an order of magnitude lower than most of the rest suggests some under-cutting. But I guess they would argue they are a video platform not a music platform and have to spread their costs over a much wider base.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby blinddrew » Sat Oct 24, 2020 8:25 pm

DC-Choppah wrote:Ok, lets take Spotify as an example to see how flawed the current system is. The fix is so simple too.

Spotify says that they pay 70% of the REVENUE to the artists. The key here is that the amount that artists gets is proportional to (70% of) the REVENUE that Spotify makes.

There is no fixed cost that Spotify pays for the right to copy your music. They do not simply pay a price for each mechanical copy they make, where the are duplicating and then transmitting the mechanical copy of your song to someone's device. The artist is cut into the game as a fractional stakeholder. If Spotify makes no money, you make no money. But Spotify can't lose. If everybody streams for free, then the artists gets zero, because revenue is zero. But Spotify still makes money on the advertising they sell while people come to hear all the free music. The artists gets zero, or a tiny fraction of the ad revenue. Spotify takes zero risk, and you the artists devalue your copyrighted properly at a massive scale. Do you see this?!? Please tell me you do!?!?
I don't, because I don't think your premise is correct. Yes, if Spotify makes no money, you make no money, but if everyone streams for free they still make advertising revenue, which is then distributed the same way as paid membership revenue. The artist gets the same cut of revenue regardless of source. It will be less if there are no paid memberships, but it won't be zero.

DC-Choppah wrote:Now then, of the revenue that Spotify makes you get your fraction. So if your song was streamed 1,000 times, but total streams was 10,000,000 for that revenue period, then you get 1/10,000'th of the total revenue.

So the bigger their service gets, and the more customers they get, the less you get, even though your fan base may stay constant.
Again, that's not quite correct, if the revenue grows as well as the user-base but your plays remain constant then you get a smaller share, but of a bigger pot. The question is, which grows larger? The pot or the user base?

DC-Choppah wrote:This business arrangement is completely exploiting the artist, while Spotify gets zero risk profit.
Something that they've only managed for one financial quarter.

DC-Choppah wrote:Now, how to fix it? Simple.
Take your music off Spotify? ;)

DC-Choppah wrote:If you copy a song from your server to someone's device, you must pay the fixed rate for that copy. No fraction of revenue, no fancy math, you must pay for that copyright. That is what copyrights are for. You must take the risk that you will or will not recoupe the money.

I am NOT in business with you, and I don't want a deal that drives my share to zero over time as you grow, and devalues my music since you benefit by giving it away for free.

My only defense against the exploitive arrangement is that you must pay an upfront, fixed cost for the right to copy that music. I appeal to common sense that this is what copyright is for.
Indeed, I remain very surprised that the major labels agreed to the 'share of the pot' approach rather than the standard principle of the per play licence. But it still leaves open the question of what the fair rate for that copy is, as I shall address in your next post...
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby blinddrew » Sat Oct 24, 2020 8:33 pm

DC-Choppah wrote:I realize that my line about a stream is the same is a download is tiring, but I mean this in a business sense.

The fact that the businesses (Spotify, Youtube, etc) have figured out a business plan that exploits the artist is because they have been able to make this clever distinction.
It's not a 'clever distinction' it's a different set of physical properties. They are different things. Desmond, Sam and I have all been through this already on this thread. You've even said the same thing. Different things with different value propositions.

DC-Choppah wrote:That distinction (stream not download) allows them to avoid the cost of the mechanical royalty,
Because it is not a mechanical copy. It's a transitory stream. Something between radio play and download.

DC-Choppah wrote:The most expensive part of distributing music is the cost to pay the rights holders. By claiming that a stream is some magic 'something else', they cleverly get around the burden of paying a fixed cost and set them self up with a risk free business plan. The distinction is made for the regulatory/business purpose.
It is something else. You yourself articulate some of the ways in which it is something else in your post at the top of the previous page. I can't argue this again, so I'll just come back to the same question: what do you think is a fair rate for a stream?
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby DC-Choppah » Sat Oct 24, 2020 9:08 pm

blinddrew wrote:I don't, because I don't think your premise is correct. Yes, if Spotify makes no money, you make no money, but if everyone streams for free they still make advertising revenue, which is then distributed the same way as paid membership revenue. The artist gets the same cut of revenue regardless of source. It will be less if there are no paid memberships, but it won't be zero.
Spotify concedes that advertising is a very small piece of revenue. The money is all in subscriptions. People are paying to have access to the pile.

Making money on advertising works when you give away access for free (Youtube) and have lax copyright enforcement that allows people to post other's works to add to the free access pile.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby DC-Choppah » Sat Oct 24, 2020 9:33 pm

The first stream shall require 9.1 cents to be paid in mechanical royalties. This is based on the same penny rate as a download or other mechanical copy. The rate can change over time and is due for an increase.

The first time the work is streamed, the royalty is due. If the same stream happens in the future by the same person, then no royalty is due since that copy has already occurred. It is up to the distributor to determine who has and has not already received the song and which devices are theirs. The burden to prove that the person demanding the song has already received it is on the distributor.

If the distributor distributes the song to an unknown entity, then by default the royalty is due.

Anyone distributing songs must pay the royalty.

If you run a web site and allow people to post other's works and distribute them, you can argue amongst the host and the user who has to pay (different business models), but the copyright holder gets the royalty regardless since the distribution has happened.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby blinddrew » Sat Oct 24, 2020 9:40 pm

I give up.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby DC-Choppah » Sat Oct 24, 2020 9:49 pm

blinddrew wrote:Something that they've only managed for one financial quarter.
Because of the rampant violation of copyright and devaluation of music the product is rendered nearly valueless and hence there is no profitable business. It is self destructive.

blinddrew wrote:Take your music off Spotify? ;)
Because of the rampant violation of copyright and devaluation of music the product is rendered nearly valueless, regardless if you take your music off Spotify or not.

Sorry by 'it' I mean the devaluation of music as a whole. Obviously the problem with streaming is the devaluation of music as a whole, not a problem with a single distributor.

I am tracing the devaluation back to the source, and offering a remedy that is within the power of our officials to regulate.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby CS70 » Sun Oct 25, 2020 8:38 pm

blinddrew wrote:It's not a 'clever distinction' it's a different set of physical properties.

It's interesting you use the word "physical". I think the final say - not on this forum, but in the world - will be exactly on these definitions.

Physics can be surprising! Due to the technicality of streaming, when you receive a digital stream, the information is downloaded on the terminator - typically in a buffer. It resides on your phone/ipad/wireless speaker/whatever RAM, and that's an uncontrovertible fact.

It may be that it can then be deleted, but it's perfectly possible to code a Spotify client that does _not_ delete it, and in a non-sandboxed environment (such as an Android phone or a jailbroken iPhone) it can be done fairly easily.

More, because of the physics of digital transmission and error-correcting encoding - the information downloaded on the terminator can be proved to be identical to the one which was sent by the origin (Spotify).

This is an opposition to a radio broadcast, where both statements aren't true. A traditional radio detector does not need to store anything (and in general, does not) to play a signal it's receiving; and the information received is, almost always, degraded with respect to the information sent - with the amount of degradation depending on the physical conditions surrounding the receiver.

Er.. technically (as you are surely aware) when you "stream" information that is buffered on yoiure

They are different things. Desmond, Sam and I have all been through this already on this thread. You've even said the same thing. Different things with different value propositions.

Physically, they are not different, and it's not a popularity contest: a million people saying that the Earth is flat do not make it more true. :-)

What is true is that downloaded information is handled differently later in the chain (discarded by the standard Spotify/YT client, saved to disk with a traditional download). But it is physically downloaded nevertheless. And of course the legally possible actions as discussed with Desmond.

Therefore the distinction you are making between download and streaming exists, but it refers to how the data is handled (or better, can be handled) after it's been downloaded on the terminating device. It's surely not physical.

Once again, there might be a design that allow to make that distinction nearly as.. unbreakable as a physical one. For example (and without the gory details) if we could design a strong encryption scheme which is dependent on time (that is, with a key that expires with time in a way that can be securely checked), then it could be possible to devise a way to make the downloaded information useless after a little time. In that case, a streaming would be structurally different than a download - so long the encryption is strong enough. But it's far from trivial to do that (or that it is even possible), and the current state of the art is not there at all.

The distinction could also be created without relying on any physical difference: for example, we could just legislate that a certain class of companies or software do streaming and another do download and apply different rules to them. It's been done before (for example, what the heck are the "sync royalties" anyway but an abstract machinery to squeeze more money from a certain type of industry?)

Who knows. We'll see. :) Here we don't decide anything, so that you or others agree or not or that I and DC are wrong is irrelevant.. it's just a pub discussion (and a fun one - no reason, I'd say, to get upset or exasperated :-D). Not even a "try to convince each other" thing , more is "these are the facts as we see them".

But I do think that exactly these kind of arguments will be the ones which determine the outcome of the situation.. which - coming back to musicians wanting to make a living - is not very sustainable right now (not because Spotify pays too little, but because of why Spotfy can exist at all).
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby desmond » Sun Oct 25, 2020 8:48 pm

The distinction for me is not so much in what happens with the bits - either way, the bits are coming from a server, over the internet, to your device.

The distinction is that for a stream, the data is downloaded under the terms of the service for every play, and it can be tracked have have access restricted by the provider. If access is terminated (for whatever reason), that content cannot be played by the user.

For a download, the data is downloaded once, and then the plays are under the entire control of the user, and cannot be tracked, or have access revoked.

Whether the data is buffered, or can be decrypted, or technically bypassed, or recorded or circumvented etc is not really the point (that's a piracy argument, which is a different thing). With a stream, every play requires authorised access (presumably paid, or ad-supported in most cases). With a download (DRM-free I mean), you only need *one* authorised access, and then all content consumption of that content is entirely down to the user with no involvement with the original provider for the lifetime of the user.
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Re: MPs to investigate whether artists are paid fairly for streaming music

Postby CS70 » Sun Oct 25, 2020 10:10 pm

desmond wrote:The distinction for me is not so much in what happens with the bits - either way, the bits are coming from a server, over the internet, to your device.

The distinction is that for a stream, the data is downloaded under the terms of the service for every play, and it can be tracked have have access restricted by the provider. If access is terminated (for whatever reason), that content cannot be played by the user.

Yes, agreed - exactly. It's not about the physical location of the data. It's about what happens (or may happen) at a moment later than the "now" when you're listening.

From an consumer ("listener") point of view, it is indeed a big difference.

From a producer ("artist") point of view, it's far less relevant. What the producer thinks he/she (should) be paid on is that his music is played and experienced - regardless of the how.

As an analogy, a car manufacturer sells a car to a dealer at a given price, regardless on whether or not the dealer is gonna sell it or lease it to an end user. The dealer doesn't get a discount because it's gonna lease it.

That is the sense that I believe DC means they are "the same". From the point of view of the artist.
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