I agree. Even if 100% of commercial properties that play music was using Spotify behind the scenes 24/7 that's still got to be only a small percentage of total Spotify plays.
Don't businesses also pay a lot more than individuals. I know here in Sweden playing music as part of your business is licensed differently than playing music in your living room. Commercial properties pay about 10 times as much pr. month for Spotify to cover commercial licensing of the music.
That was a really good question so I looked it up. Apparently commercial use of Spotify is against their TOS. So while some businesses certainly do use Spotify illegally, it's not a piece of business they are trying to get. https://support.spotify.com/us/learn-more/faq/#!/article/pub...
Agreed, but a business that plays spotify likely plays it for the entire time said business is open. Very few individual users will listen to spotify for 15 hours a day like a business (bar) that plays spotify would.
[Edit] just read the earlier sibling comment. I'm informing my theory based on my own very occasional usage of spotify. I suspect I'm in the long tail of their business, and I would imagine that the aggregate of businesses that play spotify all day matches up with a good portion of that long tail.
The problem is it's all speculation. We don't have any hard numbers to tell us how any given revenue split policy would affect payouts to different artists. My instinct (and I'm the Co-Founder of a streaming service that does revenue share FWIW) is that the reason so little is paid is because there are just a lot of streams period, and changing the algorithm around to try to make it "more fair" might shift the distribution a bit, but it won't really move the needle for anyone. The fact is that when people had to buy music they were spending a lot more on it than they do on Spotify for the same quantity. It's just like Netflix vs cable—you can play shell games all day long, but the minute you go to raise the price from $9.99 to $11.99 the entire customer base flips their lid. So you'll never monetize like you could in the past, and this is a permanent change because there is no limit on supply anymore.
It seems inevitable at this point that if most or all plays are done through streaming services the only thing we will have available to stream are top 40 singles.
For most of humanity musicians have earned their living through live performance. The last 70 years have been an extreme outlier as recording and playback technology has matured, but now the novelty and barrier to entries are gone, and the supply is flooded. I don't see any shortage of new artists willing to give their music away to get discovered. I also don't see streaming services succeeding with just Top 40 (diversity of music has never been higher). Sure some artists will pull their catalog or straight up retire out of spite, but I don't see any trends or market forces pointing to this "inevitable" outcome.
