Spotify’s broken math: Why the streaming model may never work for artists

David Greenwald, writing fro The Oregonian:

Here is the gigantic, crucial difference between piracy and streaming. In piracy, we don’t have listening numbers: we don’t know if an album downloaded for free was listened to 100 times or 0. A download might represent a lost sale or it might represent a listener adding to an endless collection or sampling one album among dozens, as if hearing the song on the radio. We really have no idea. But with streaming, we absolutely know. The statistics are right there. And artists should be paid accordingly: maybe not $10 a fan, but definitely more than a few pennies.

There’s a cold ratio at play here: the less popular a band is, the more money they need to generate per fan to reach a break-even point. However, the more popular a band is, the more ways they have of generating money per fan — and often they can generate more money per fan anyway, with deluxe packages at shows and branding opportunities, especially if you consider corporations to be people, as the Supreme Court does. It is a fundamentally unfair marketplace that privileges the already successful, which is rarely the path to innovation — or interesting art.