Spotify tries to stay positive about its artist payouts
A report about the streamer’s contributions to Canada’s music industry crosses the line between PR and insulting.
Spotify released a Canadian version of its “Loud & Clear” report, which it describes as a deep dive into the economic impact of music streaming on Canadian artists, and it sure does paint a rosy picture.
The streamer said Canadian artists earned nearly $460 million in royalties in the last year, a 5% increase from the previous year and nearly double what it handed out five years ago.
The problem is that it makes no differentiation between mega-stars like The Weeknd, Justin Bieber, Céline Dion, and Tate McRae (which the company specifically calls out as Canadian success stories) and other, lesser-known or indie artists. In other words, nearly all of those millions could be going to a few dozen artists, with everyone else left with the crumbs.
Perhaps anticipating this criticism, the report also states that, since 2017, the number of Canadian artists generating at least $50,000, $100,000, $500,00, and $1 million annually on Spotify has more than doubled. This seems to be a belaboured way to show that money is going to artists at all levels, though the fact that it doesn’t actually share how much is doubling obscures how many are actually in each category.
Spotify’s global “Loud & Clear” report said that 110,500 artists made over $5,000 USD last year, with 71,200 making over $10,000, and 22,100 making over $50,000. There’s no way to estimate exactly how many Canadians are in each of those categories, but basic statistics suggests the numbers are likely only in the hundreds.
Why it matters: Reports that boast about how much Spotify pays without showing all of the details gloss over the reality for all but the biggest artists in the streaming era — music makes a lot of money for everyone except musicians.
Several factors go into determining how much an artist receives in Spotify royalties, but the most-cited figure (backed up by artists’ own accounts) is that it typically works out to somewhere between $0.002 and $0.008 per stream.
By comparison: Spotify’s report says that it is now the biggest source of music royalties in Canada, outpacing all of the country’s commercial radio stations. But again, that obscures how much artists actually receive, and which one would be sustainable for a music career.
Much like Spotify, the radio royalty formula is more complicated than a simple money-per-play deal, and can change from month to month. That’s one reason why SOCAN, one of the main royalty distributors in Canada, wasn’t able to provide me with up-to-date estimates of earnings artists can expect, but a story in its magazine Words & Music said that, in August 2013, artists were receiving roughly $1.35 per play on commercial radio and $4.60 per play on campus and community stations, which are far more likely to give airtime to smaller, independent artists.
Taking out the competition: Those rates are almost certainly lower today, partially because streaming has reduced commercial radio audiences and impacted how much they pay in royalties. But that is why Spotify’s report — centred on the economic contribution it makes to Canada’s music industry — crosses the line from PR fluff to insulting: in addition to its low royalty rates, Spotify has decimated several avenues that would otherwise contribute to a sustainable music career.
For physical media, artists make somewhere between 10% to 30% of the retail price, depending on details of agreements with record labels and distributors. Based on typical prices in Canada, that gives artists between $1 and $10 per CD sale, and $2 to $14 for vinyl.
Digital music sales through platforms like iTunes would typically pay artists roughly $0.01 per $0.99 song sale (depending on agreements with labels and publishers), but that number could be as high as $0.07 for independent artists.
Bottom line: As of last year, Spotify has gone from consistently losing money (mostly a result of acquisitions and R&D, not royalty payments) to being incredibly profitable. It had €1.138 billion in net income last year, with a 30% gross margin. Also last year, CEO Daniel Ek cashed out $376 million in stock — more than the $320 million it paid songwriters in the U.S.
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AMD snaps up a Canadian startup in a preview of the chip industry’s future
Untether AI, we hardly knew ye.
It seems like AMD is sick of getting schooled by Nvidia.
The Silicon Valley chip maker has acquired the team behind Toronto’s Untether AI, a startup that designed chips optimized for inference — actually running AI models and having them respond to new data. These chips could complement the GPUs that are used to train AI models (a model trained on GPUs could then run on inference chips) but are also marketed as a competitor, since its specialization makes them more efficient.
The deal is what is casually known as an “acqui-hire.” Instead of actually buying Untether, AMD has hired its engineering teams, and Untether will be shutting down.
Though easier than a typical acquisition, this does mean that AMD will not own any Untether assets or intellectual property (including chip inventory and designs).
The deal was announced one day after AMD acquired Brium, a startup that tackles inference from the software side of things.
Big picture: The biggest part of all the spending on AI the last couple of years has been on chips. And while there would appear to be enough to go around for everyone, Nvidia has dominated the market, leaving the likes of AMD, Intel, and Qualcomm consistently playing catch-up.
Last year, AMD reported $5 billion USD in AI chips sales. Nvidia had over $100 billion.
What’s next: AMD seems to be waking up to the fact that going head-to-head with Nvidia is always going to be an uphill battle. Now it is betting on inference being an important part of AI’s future — and a key way it could finally differentiate its hardware from Nvidia. Maybe it won’t unseat Nvidia, but it could carve out its own niche.
Inference is becoming a buzzier concept as it is looked to as a solution for cutting back on the monetary and energy cost of running hundreds of towers of GPUs simultaneously.
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