What About Spotify?

Posted on March 13th, 2019   Comments: 37

What about Spotify?

There is no question about it, streaming is here to stay. However, despite the industry shift towards streaming, we still see a landscape in which 99% of all Spotify streaming comes from just 10% of songs. This should cause independent artists to take pause and ask themselves if they are moving towards streaming because they have to, or simply because it’s what everyone else is doing.

As someone who has been defiantly pushing artists to embrace sales driven models while the rest of the industry continues to shift towards streaming, I get asked the same question almost every day…

…what about Spotify?

In this episode I’ll explain why it’s so important that independent artists continue to implement sales strategies, as well as offer some food for thought about a few important differences between the mainstream music industry and the independent music industry, and argue that streaming should play a different roll in the careers of most indies, than it does in the careers of most mainstream artists.

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What’s your take on Spotify? As an independent artist do you think the growth of streaming has helped or hindered your earnings? Let me know in the comments below.

 

37 Comments

  • Sola Giving Voice says:

    I dont think streaming hurts direct sales. Fact is its in general two different consumers. There is a middle ground whom will buy either or… or both. But usually people that want hard copied music like hard copies. And people that like digital streaming… like impulse buying. So in the end I believe it leads to expanding your potential customer base. Pretty simple.

    • John Oszajca says:

      Hi Sola,

      Thanks for the comment. As someone who works on these campaigns all day long and sees a lot of first hand stats, I can tell you that it does impact sales. While there is a middle ground and some will still buy even though it’s available for streaming, many won’t buy your music if they already have it. Stats aside, the logic is fairly self evident. That said, one of the reasons this is the case is because I don’t teach people to go in for a hard sell right away. Instead I teach people to build relationships with their subscribers over time. This time leads to people pulling out their phones and running an artist’s name. It then impacts sales. Our goal is not only to sell to people who like physical CDs, it is to monetize our fanbase by selling to them, regardless of what format they are most familiar with. If you build a solid relationship with your fan base, and ask for a bit of financial support from time to time they will buy music from you regardless of the format. Making it completely available to them via the streaming services inhibits your potential.

    • Brian says:

      Such a great episode! It’s always great to be reminded to keep my eye on the ball: sales.

      Thanks man!
      -Bri

  • Patrick Rydman says:

    Hi John!

    The band The Empty Pockets, who you’ve used frequently as a success story, do have all their stuff (or a lot at least) on Spotify. Yet they have sold physical CD:s, I believe more than 10.000. For them, do you think the streaming has hurt their sales?

    • John Oszajca says:

      Hey Patrick,

      Josh will tell you it hasn’t impacted much, I suspect that if you could do a side by side you would see a slight impact. However, the reason the impact has been less significant with them (in my opinion) is because Josh goes for the sale right away, with a free for shipping and handling offer. My preferred method is to spend more time building the relationship with the fan before asking for the sale. This extra time means much more opportunity to seek out the artist’s music on Spotify. I would also point out that Empty Pockets intentionally puts very little emphasis on Spotify because they are also conscious of the benefits of the sales model.

      You could certainly adapt your approach to mitigate the impacts of streaming on a sales funnel. And it can work very well. However, it is not my preferred approach for most artists.

      There are many paths and many solutions to just about every problem. My goal is to distill things into the best one-size-fits-all strategy I can come up with.

  • 13irthmark says:

    I appreciate the discussion. I agree that the streaming should be utilized as digital jukebox, and marketing to purchase the product should always be goal. Many of us get complacent after achieving getting the product on digital platforms; it is more of an ego stroke instead of a stepping stone to complete what should be the ultimate plan, selling the product.

    Thanks again.

    And shout out to all the indie artist. Keep ur boots laced tight.

    Sincerely,

    13

    • John Oszajca says:

      I agree. Many artists simply can’t fathom not doing what all of the “rock stars” out there are doing because they think it makes them look less “professional”, or successful. But this will change in time as it becomes more and more normal to limit distribution of one’s music.

      • Sola Giving Voice says:

        I dont think streaming hurts direct sales. Fact is its in general two different consumers. There is a middle ground whom will buy either or… or both. But usually people that want hard copied music like hard copies. And people that like digital streaming… like impulse buying. So in the end I believe it leads to expanding your potential customer base. Pretty simple.

  • Al says:

    Would love to hear you 2 guys debate this… https://www.youtube.com/watch?v=Jkik2D3T0BY

    • John Oszajca says:

      Hey Al,

      I’d enjoy a chat with Damian, but I suspect it would not be much of a debate in the sense that we are basically saying the same thing. There are some nuances of his opinions that are different than mine, but if you listen to my podcast episode you’ll hear me stress the fact that “selling music” is not synonymous with selling albums, and I stressed that I think the future is in subscription models, as does Damian in that video. There are a lot of different ways to get to the same place, and while we perhaps have some differences, I think he and I have more in common than not.

  • Scott says:

    Hey thanks for sharing. I’ve done music for a while, but as far as marketing, I’m pretty new to it, and I don’t have a very big following yet. Recently, I finished my first EP and am releasing it in a few weeks, so I’ve been trying to engage and connect with my audience more. Is what you have talked about here also the right approach for a first release? Do you have any additional tips for a first release? Also do you have any good references/links of indie artists that are doing this successfully? For me, it is a bit daunting to consider an approach that so many of my friends aren’t doing, but you make a convincing argument.

    • John Oszajca says:

      Hey Scott,

      Glad you enjoyed the podcast. Here’s the thing that is hard for most new artists to swallow… Regardless of whether you go after sales or streams, very little is going to happen unless you build an audience first, or get freakishly lucky. In that sense, I am a much bigger fan of building a funnel first so that you can start to build your audience. Once you have an audience, you can window your release and (at the very least) release it to fans only first.

      As I state in the podcast, I would still make a few tracks available on the streaming platforms, I would just reserve the incentive for people to spend money with you and put a heavy focus on monetizing your fan base through sales.

      But yes, this approach can work just as well (if not better) for new artists as apposed to established artists.

  • Sammy says:

    Great ep! Thank you, and I 100% agree! Independent artists need to take a step back and create their own pond to swim in rather than drown in the ocean that is Spotify..

  • Marc says:

    Do you think that releasing a CD or single on Spotify or other streaming really kills your CD sales?

    Isn’t that apples and oranges?

    If your sales funnel is rocking do you think streaming kills the CD sales?

    Just wondering if you’ve A/Bed it.

    Seems like it’s going to be smart to work every ave to the hilt and they all seem to have very technical blueprints to follow.

    Avenue specific.

    I always love your podcasts, John! : )

    • John Oszajca says:

      Hey Marc,

      I definitely do think that streaming hurts album sales and see evidence of it all the time. It’s not something you can exactly split test because a split test requires all things to be equal and you can’t simultaneously release and not release the same album. However, I have seen many artists do well with their funnels only to see sales plummet once they release to streaming. I also see a lower conversion-rate-average on most of the campaigns I work on, in which the album has been released for streaming.

      It just stands to reason, why should someone buy an album if they already have it?

      That said, if you shift away from the album in favor of a different product (such as a membership site, or a Patreon-style campaign), you could theoretically push both equally aggressively and expect good results. However, I still believe it would require you to window your release.

      There are many variables to a successful campaign and you can find solutions for just about any problem. But as a general rule, the average indie artist is in a place of being much more capable of generating a loyal audience of a few thousand, then they are generating millions of streams each month. For those artists, I strongly believe that limiting their streaming releases and preserving the incentive for the fans they do have to buy, is essential.

    • James says:

      This is very much the approach I’m planning to use on my future releases, by only giving streaming sites a few song’s from any new album. Then for the people who dig what they discover, they’ll have to buy it if they want the whole release. The main reason for coming to that conclusion was when I read that Spotify pays $0.00437 per stream. Also, Peter Frampton has said publicly that his pay for 55 million streams of “Baby I Love Your Way” was only $1700! Keep in mind, a lot of the pencil pushers who work at Spotify are making around that much per week! Pretty obvious there IS money in streaming, but NOT for the songwriters/ artists.
      And get this – the Music Modernization Act was recently signed into law by President Trump, giving songwriters only their second substantial pay increase (up by 44%, over the next 5 years), which is still below market value, in 110 years! BUT, now Spotify & Amazon are suing songwriters over this pay increase!! Shameful!
      What to do next..How to fight back..I’m at a loss.
      John, any idea’s, thoughts?

  • Hello John,
    I hope you are well. Nice to hear a new podcast episode. I’ve always liked your approach on things. You may remember that we talked a few times and that I make a living as a French singer songwriter here in Portland, OR. I’m on a niche market.
    I’m just a bit confused about something and wanted to ask you a question…. Mainstream artists also do direct to fan marketing don’t they (using mailing lists etc) ? They also do upsells (like VIP concert tickets, meet and greet, bundles, etc…) They also communicate directly with their fans via social media (like Taylor Swift, etc…) ? It just seems to be on a larger scale than an independent artist and with bigger marketing power. So how is it different ?
    Thanks for your feedback. Keep up the good work.
    Eric

    • John Oszajca says:

      Hey Eric,

      Good to hear from you. The mainstream music industry as a whole does not engage in anywhere near the same degree of direct response marketing that I teach with MMM. That said, it’s true that more and more artists are embracing direct to fan marketing, but it’s precisely for the reasons I tend to stress here at MMM, not in contradiction to it.

      You may recall that at one point Taylor Swift pulled her catalog from Spotify. While she added it back, she still windowed her releases of “Reputation” (holding it back from Spotify initially) to make maximum dollar from her fan base. Adele has taken a similar approach. They do this because they realize that there is much money to be made from sales. I’ve also seen Guns and Roses engage in a lot of direct to fan sales strategies with high ticket box sets, etc. It’s all very cool to see.

      However, these are massive artists with the power to leverage their fan base in a meaningful and profitable way, with or without streaming. And these artists are so large that they have (to some degree) eclipsed the labels that distribute their music and function as businesses in their own right. It’s absolutely true that an artist of any level can implement direct to fan marketing strategies and do well with them, but the reality is that the throw-money-at-it-and-see-what-sticks business model of the major labels favors streaming more than it does direct to fan because direct to fan marketing is complex and personal, and not as easily reproduced.

  • Will Black says:

    Great podcast, John – awesome.

    I’m recording and releasing my next album single-by-single starting next month and this podcast has convinced me to delay doing any digital distribution for the songs until after I’ve exclusively released/sold the songs to my newsletter subscribers & Patreon fanbase.

    Spotify, iTunes, etc. will get the songs after the complete album drops in November and I’ve had a chance to monetize the songs directly with my own ‘tribe’ first under my control.

    Great timing for me on this podcast, thanks again John!

  • As a solo artists in a niche’ genre’ I totally agree and this was good to hear. Thanks as always for another great podcast John!

  • Bubba Zanetti says:

    99% of streams come from just 10% of the songs.

    Sure. I’ll buy that.

    Lets break this down.

    30 million+ songs are on Spotify
    30,000,000

    Resulting in 377 billion streams – 377,000,000,000

    So 99% of the streams, 373,230,000,000, came from
    3 million songs

    That’s a lot of streams!

    So we have left over 3.7 billion streams coming from 27 million songs

    That is a freaking ton of songs and streams!!!

    Now you could say that the average of the 1% is 137 streams per song. But we all know that isn’t how it works. The vast majority of those 27 million songs don’t see more than a dozen streams; my guess: better than 80% never see more than a handful of streams.

    Part of the reason indie musicians don’t do well with streaming is because they do not build an audience. They throw stuff up on Spotify and make a post about it on their socials and announce from stage, you can find our stuff at the usual places.

    The other reason indies don’t do well on streaming: their songs suck–not the production per se, but the songs. And also, their production sucks. When the song isn’t that good and the production is average, the only people streaming your music is your immediate circle of friends and family

    Fans want to consume music from their preferred source. Trying to shoehorn them into a sales funnel does not result in a sustainable fan base of consumers without constantly trying to upsell, downsell, sidesell, using takeaway sales, LTOs etc. – that’s bro marketing 101. The game has changed.

    • John Oszajca says:

      Sales funnels are in not synonymous with “bro marketing” by any stretch. They have been around in various forms since the 1800s and will continue to be around for the foreseeable future. Nor is the kind of marketing I teach jam packed with an over abundance of offers. It is all about building an authentic relationship with your fans and actually earning the right to ask for some financial support. My points are all explained in the podcast. Cheers.

  • Hi John Back in 2008 I started writing songs again after a 20 year hiatus. Even though I had quite a successful output back in the early years, I felt that my new approach to the craft was somewhat more on a mature level. I’ve been aware of your marketing strategies since 2010 and I must thank you for your guidance in setting me in the right direction. Now with two new albums under my belt, I feel ready to take the plunge, ride the rapids and steer this ship t’where ever it may go.

  • Mark PInkus says:

    hi John, I had no idea that 99% of the music listened to on spotify comes from 10% of the songlist..I”m making regular income for my music (just reoorded cd #14..out this spring)from several sources including streaming…but the money comes from several “rivers” of the music industry all at once…I am grateful for it all…streaming most definately is a small part of the overall income…what do you know about the usb eventually taking over sales? great to hear from you and thanks as always for sharing…peace, Mark

    • John Oszajca says:

      Thanks for listening Mark. While I don’t personally have any stats on USB sales, I personally see this as a bit of a dated idea. It’s been around for a while, and while it can lend itself to some fun marketing ideas, the difficulty of use factor doesn’t really make it any better of a solution that a traditional album (in my opinion). I personally think the future for independent artists will be more platforms like Patreon as well as subscription apps. Pay >>> download >>> get access to music and more based on subscription tiers.

  • Nathaniel Brooks says:

    I love to sell hand to hand to my fan….I’m Nate The Great the smartest artist.

    • Richard Rey says:

      John I’m looking at using streaming as radio was used before. I’m going to release a full length lp but only release 2 to 3 songs to streaming. What are your thoughts?

  • Erica says:

    I loved this! I couldn’t agree more. I have never made a full time living from my music, but my modest earnings shrunk to almost no earnings once I began releasing to Spotify. I’ll definitely be following your advice on my next release and only releasing a few tracks, while focusing on selling the album to my fans. Thanks for another great episode!

    • John Oszajca says:

      Glad you enjoyed the episode Erica. Good luck with your next release!

      • Trump signed the new Modernization Act in the favor of Artist and song writers… We will be earning up to 44% more income this year. I personally know of an indie artist earning 40k a month. His name is Brent Faiyaz, and his manager Ty Baisden had a long conversation about Spotify. Indie artist need to hammer the marketing efforts a lot more than they are currently doing. You need to be marketing from your phone when your not at home at the computer. Street promotions FLYERS, CDS, T-shirts need to be used to drive more traffic to Spotify for fans to follow all your music. Please Listen and follow my RnB Soul music on Spotify: Search: Bobby Washington (Lovers) album

        • Hey John. I believe that posting music to spotify is a disaster for indie artist (imo). I have read the new terms of agreement. Basically all the music posted by an artist lose all rights and are solely owned by Spotify. The have at that point all the leverage to shadow ban anyone, such as hiding stats. Which in effect can kill any integrity from spotify. If someone has a big label backing them, then the stats and payments for revenue might be honest or maybe not. I would avoid Spotify if all possible. I personally believe having your own website is better to stream your music. Well thats my honest opinion.

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