It's revolutionary, as are their licensing agreements -- $.70 USD per song sale, and a cut of ad revenue for streaming. How can an independent artist get in on the Spotify craze?
What is Spotify?Spotify nearly perfects the streaming audio model -- it's fast, efficient, and it offers a a vast library of full-quality, full-length music. At it's most basic level, it's free (ad supported, of course) but offers a wide array of features -- features which expand if you're interested in paying a small fee per month. You're able to make playlists, scrobble your plays to Last.fm, and, in ad-free versions, even build offline playlists which you're able to access on your mobile devices. About Home Theater's Barb Gonzales has a fantastic piece introducing you to Spotify on a more detailed level -- and it's a great read if you're just getting started.
Spotify has changed how many people listen to music. But how can you, as an independent artist, get a piece of the puzzle?
Enter the AggregatorsAs an independent artist, one of the most frustrating things about distributing your own music is how hard it is to do business directly with the distributors. Because of the large number of independent artists like yourself, Spotify only does business with what's called an aggregator -- a service that has pre-existing agreements with these digital distribution networks to find, filter, and deliver content that's properly tagged and uploaded in the proper bitrate. Aggregators take your music and, for a small fee, make sure that everything's in line -- that includes your cover art, the distribution compression format, and all of the tagged information. This is what Spotify, iTunes, and other distributors require in order to be brought onto their service.
When you sell your music on Spotify, there's two different ways that you can make money. First and foremost, Spotify is a streaming service. Users can stream your music either through an ad-funded desktop application or a premium, paid service which enables smartphone listening. Most of the time, your music will be listened to on a stream. When streamed, you'll be compensated by being paid a share of Spotify's ad revenue. This is calculated on an individual basis with a pre-set formula based on the number of listens your material has in a given month.
Spotify also allows people to buy your songs, exactly like iTunes. They've pre-negotiated the rate of $.70 USD per song, and that's what they pay every time you get a purchased download. Depending on the aggregator you choose to use, you might end up paying a small percentage of that royalty to them in exchange for their services.
Submitting Your MaterialThere's a lot of great aggregators out there, but one of the top-rated ones in the world is TuneCore. We'll use TuneCore as our example as to how these digital distribution companies work -- keep in mind, other aggregators may have different policies -- it's up to you to check them out individually.
TuneCore offers a flat-pricing model for the submitting of your material, and handles paying you all royalties due. TuneCore charges $49.99 to place an entire album, or $9.99 for a single. You simply upload your song in the correct format -- uncompressed, 16-bit resolution, 44.1kHz sample rate .WAV -- and TuneCore automatically assigns a UPC code to your release, gives it a unique TuneCore ID, and gathers all necessary information from you. Unlike physical physical CD replication, you need to deliver your masters in fully digital format; they prefer you not rip from a CD, since that has the potential to add digital artifacts to your song; it's preferred that your audio comes from the original digital masters.
Once your single or album is submitted, it takes about 6 to 7 days before Spotify has it live on their system. This is normal across the board, regardless of who you choose to do the distribution work for you -- once your release is delivered, it has to be sorted, compressed, and uploaded live to the service.
Like most digital delivery systems, payment for your material is about two months behind reality. For material played in August, your statistics and payment will post in October. That makes it slightly frustrating when expecting big returns, but remember -- when it comes to digital distribution income, if you promote the material and have a solid sales base, your slow-but-steady approach will pay off.
Spotify is quickly revolutionizing how many people listen to music, and how artists interact with the digital distribution model. As more and more people have access to fast Internet (especially on-the-go) and cloud-based services become more and more an everyday reality than a buzzword, we can expect to see many musicians making the jump to distributing by streaming.
It's never been easier, cheaper, and more financially advantageous to distribute your album online -- and with Spotify, there's a whole new world of opportunity open to independent musicians.