Unlikely Words » economics

How much does a band get paid from Spotify?

aaron cohen — Fri, 16 Sep 2011 18:50:31 +0000

I'm always fascinated by the 'economics of music' blog posts when they come from the musicians. Uniform Motion has a new album out, but not in stores because they don't have a distributor. They were kind enough to let us know what they earn when you listen to their music (or buy it from a digital service like iTunes). These numbers also make more clear their decision to let you pay what you want for a digital download. *The post is in Euros, but you'll understand.

With Spotify, we’ll get 0.003 EUR/play.
If you listen to the album all the way through, we’ll get 0.029 EUR.
If you listen to the album 10 times on Spotify, we’ll get 0.29 EUR
If you listen to it a hundred times, we’ll get 2.94 EUR
If you listen to the album 1,000 times (once a day for 3 years!) we’ll get 29.47 EUR!
If you use the free version of Spotify, it won’t cost you anything. Spotify will make money from ads. If you use any of the paid versions, we have no idea how they carve up the money. They only disclose this information to the Major record labels…

Via Stellar / @Chartier

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Free parking not actually free

aaron cohen — Thu, 09 Sep 2010 17:43:03 +0000

Tyler Cowen writes in the NYTimes

The subsidies are largely invisible to drivers who park their cars — and thus free or cheap parking spaces feel like natural outcomes of the market, or perhaps even an entitlement. Yet the law is allocating this land rather than letting market prices adjudicate whether we need more parking, and whether that parking should be free. We end up overusing land for cars — and overusing cars too. You don’t have to hate sprawl, or automobiles, to want to stop subsidizing that way of life.

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The Economics of Minor League Baseball

aaron cohen — Tue, 17 Aug 2010 21:47:06 +0000

Basically, unless you're drafted in one of the fist several rounds, you don't make very much money. Depending on the state, most players make less than minimum wage, and that's only during the 4.5 months they're actually paid. Not very glamorous at all. Really interesting read.

But the biggest difference may very well be the money. The minimum annual salary in Major League Baseball currently sits at $400,000. Meanwhile, most players at the minor league level who haven’t reached minor league free agency are lucky to make $10,000 over the course of a season; a survey of players revealed that those in rookie ball make $1,250-1,300 a month while players in Triple-A, the highest level of the minors, can make roughly $1,000 more per month while under the contracted amount.

(Thanks, Jonah and Andy)

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Transactional vs Revolving Credit

matt — Sat, 23 May 2009 00:54:55 +0000

This, from Steve Waldman, is an important distinction to understand, and his proposal for transactional credit as a public good makes sense, on a first reading. ###Possibly related posts:Mark Cuban’s Idea To Help The Credit Crunch What to do with Junk Mail ### Possibly related posts:

Taibbi Eviscerating Friedman

aaron cohen — Thu, 05 Mar 2009 19:09:47 +0000

The article and the fighting technique to go with it, via DK.

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Everywhere is Having a Sale

aaron cohen — Sat, 03 Jan 2009 14:13:51 +0000

This Guy Kawasaki post of pictures from his local mall illustrates perfectly something that's happening all over. We've ventured into the malls/outlets twice since Christmas and the whole world is 20%-50% off. I've never seen that before. Sure there's a clearance rack, but the name stores appear desperate to move merchandise. I've got a bunch of gift cards and I'm getting nervous places will go out of business before I can use them. Is there a word for that?

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TiVo Guilt – The Opportunity Costs of Too Much TV

aaron cohen — Tue, 30 Dec 2008 14:35:44 +0000

CNN says that people have too many programs saved on their TiVos

With infinite media, you have infinite choices, and therefore you have infinite opportunity costs," he says. "Your satisfaction index of the thing you actually choose can never be equivalent to the infinite opportunity costs, so we're in this position of being behind the cognitive eight-ball all the time.

I don't even have a TiVo and this happens to me. We have to watch Dexter, True Blood, Californication, Weeds, we're behind on 30 Rock and the Office and Friday Night Lights and I've just last night finished Generation Kill. Lost Season 4 ended last week for me. And those are just the shows with which we're relatively caught up. What about BSG or The War or The IT Crowd?

I think this is like the RSS post Matt put up a couple days ago about getting rid of feeds he's not interested in (read: doesn't have time for) anymore. It hurts. Is RSS Bankruptcy a good option? Should people declare TiVo bankruptcy and burn the whole fucking place down?

What I really want to know is who will spearhead the TiVoZero movement, Merlin Mann is too busy tackling email.

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Publishing is Changing

aaron cohen — Tue, 16 Dec 2008 13:48:52 +0000

A couple weeks ago, there was a long article in New York Magazine about the end of publishing. It was interesting in the way that watching a car accident happen is interesting, only this is a car accident that you could have predicted was going to happen 20 years ago. You simply can't keep paying a lot of money for something (in this case a book) that's not going to make you a lot of money.

Last week, the author of that article tied it all together with another short blurb comparing Random House to General Motors, the only difference being Random House's back list has some value.

It got me thinking a couple things:

It's not that publishing is over, or banking, or auto manufacturers, or the music industry. This isn't a coincidence. These are all businesses that haven't evolved from where they were and they're getting punished for it.

Why do e-books cost as much as an album? The article above has the price of ebooks for your Kindle at $9.99 similar to a price for an album on iTunes. Maybe iTunes has kept the price of an MP3 low, but a song or album you can listen to over and over and over again, while a book...how often do you read a book? Even your favorite book. If publishers agree to lower the cost of ebooks to $5, they'll sell more than twice as many. Mark it, dude.

Oh, and the NY Times Magazine says journalism has to change, also, or they'll be dead, too.

Oh, and James Surowiecki says Newspapers are toast, too.

Had the bosses realized that they were in the transportation business, rather than the railroad business, they could have moved into trucking and air transport, rather than letting other companies dominate. By extension, many argue that if newspapers had understood they were in the information business, rather than the print business, they would have adapted more quickly and more successfully to the Net.

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So What’s Wrong With Suze Orman?

aaron cohen — Sat, 13 Dec 2008 17:56:44 +0000

I get Frank Rich's point:

Given that John McCain’s economic team was headlined by Carly Fiorina and Joe the Plumber, the country would be dodging a fiscal bullet even if Obama had picked Suze Orman.

But if I were him, I would have gone with someone like James Cramer or Ben Stein as the punchline as opposed to someone who argues that if you don't have the money you shouldn't spend it. That's just me, though.

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The Changing of the Music Business

aaron cohen — Mon, 24 Nov 2008 14:17:49 +0000

Universal Music Group says that the traditional music business isn't dying (at least not as much as it seems because the 6% decrease shoots up to a 1% decrease when you account for the strengthening of the dollar against other currencies.

What happened? CD sales are still declining, of course. But Vivendi said the rise of digital music–that means you, Apple (AAPL)–is finally beginning to balance out some of the decline. Digital sales increased 33 percent in the first nine months of the year, the company said.

And then Live Nation has announced that they will begin selling DRM-free MP3s for their artists making LN a one stop shop for everything involving your favorite artist (so long as they are a Live Nation/Music Today band).

Essentially, Live Nation is turning into a microcosm of the music business at large. If you're a fan of one of its bands, you're going to spend money on them eventually, whether its a concert ticket, a T-shirt, a CD, fan club access to exclusive "VIP" content, an MP3 from an artist page or whatever. And when you do, Live Nation will be there to take a slice of the pie -- a savvy business strategy when no one knows for sure where the bulk of music revenue is going to come from.

This touches on something I got from Kevin Kelly's True Fan thoughts from several months ago. Musicians don't need record labels to do most of the stuff for which they used to need record labels. They don't need large advances to record in expensive studios (they can record in Garage Band). They don't need help with distribution (they can upload their music themselves to iTunes and social networking sites). And they don't necessarily need marketing help (they can use Facebook and MySpace to organize street teams, directly target their fans, and create and manage a community that increases a fan's passion for the band).

Many savvy bands will be able to manage all of this (the community especially) themselves, but many also won't or will not want to. I think this is going be where music businesses of the 21st century make their money. The record label dinosaurs can stick to their business model, or they can adapt to offer community management services from which they may once again become prosperous.

I've always been envious of Music Today as someone who used to work for a band (and I'm still sending out CDs twice a month! How's that for long tail?). They figured out that it's mostly impossible to make any money offering services to bands because band's don't usually have any money. The way to make money off of bands is off of their fans. That will always be true.

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Round Up of a Weird Weekend

aaron cohen — Mon, 17 Nov 2008 02:30:30 +0000

I've been sick, so maybe this only amuses me, and if so, well, sorry. But this weekend, I came across news that spam was up, spam was down, spam was lucrative (enough), and divine intervention as evidenced by a seemingly unironic collocation of sentences from the AP.

Alaska Gov. Sarah Palin said Wednesday she would consider serving in the Senate if God gave her the opportunity and Alaskans wanted her to take the job. The state's senior senator, Republican Ted Stevens, fell behind as the count resumed in his re-election bid.

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Does Spam Make Any Money?

aaron cohen — Sun, 16 Nov 2008 19:28:47 +0000

3 spam posts in one weekend? Why not?! I've often wondered abut the economics of email spam. Clearly it was making someone money, otherwise we wouldn't get nearly so much. So how much does spam make? Via Schneier, the answer is not much, but enough.

Spam is all about economics. When sending junk mail costs a dollar in paper, list rental, and postage, a marketer needs a reasonable conversion rate to make the campaign worthwhile. When sending junk mail is almost free, a one in ten million conversion rate is acceptable.

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The Innovator, the Imitator, the Idiot

aaron cohen — Tue, 07 Oct 2008 14:22:07 +0000

I liked this quotation, and wanted to save it for Googlesterity

"Buffett once told me there are three 'I's in every cycle. The 'innovator,' that's the first 'I.' After the innovator comes the 'imitator.' And after the imitator in the cycle comes the idiot."

-Theodore Forstmann, quoting Warren Buffett

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Michael Lewis Blog?

aaron cohen — Tue, 30 Sep 2008 18:54:04 +0000

Can someone, preferably, the man himself, start Michael Lewis a blog? Best known for the books Moneyball and Liar's Poker, he's also had articles/columns in The New York Times, Slate, The Los Angeles Times, Bloomberg, Portfolio (no author page), and almost assuredly The Wall Street Journal (again, no author page). Shouldn't there be a central repository of all these articles in chronological order updated as a new one is published?

What inspired me to write this post, though, was the fact that he's popped up 4 times in my RSS in the last week, so he may as well have had a blog with its own feed.

He moved his family into the biggest mansion in New Orleans to better understand the "acceptable lust" Americans have for a bigger house. He sarcastically muses about how the former CEO of Goldman has treated his former employer since becoming Secretary of the Treasury. He looks on the bright side of economic crisis. And he's writing a book about the meltdown. Also, here's a bonus article from last year I never got around to commenting on. This one includes the quotation, “If there’s been a theme to John’s life,” says his brother Nelson, “it’s pricing tail”, though it's about figuring out what to charge for insurance against cataclysmic events that have less than a 1% chance of happening.

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Alternate Bailout Proposals

aaron cohen — Mon, 22 Sep 2008 19:21:31 +0000

For bankers/Republicans who say there are no other options besides Paulson's 'clean plan', here are Cuban and Ritholtz's alternate proposals.

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Economics: A Question

matt — Mon, 28 Jan 2008 18:42:03 +0000

I'm studying economics for the first time this semester. I suppose I'm a little embarrassed that it's taken me this long, but better late than never. Our text is specifically about micro-economics and public finance.

Reading the introductory material, I can't help but notice (clearly, in print) something that I've suspected for a long time: economists think that people are robots. With the caveat that I've only read three chapters of this textbook, so far it seems to me that all of the economic theory (Pareto efficiency, welfare economics, etc) depends rather strongly on people being good little rational choice-making utility maximizers.

Thing is, I don't feel like a mechanically rational utility maximizer, and I don't think anyone else really is, either. Can someone who's studied more of this than I have point me to some readings in one of the following two categories?

An economist making reassuring noises that, yes, these things are only models, and as a result they're only abstractions and approximations, and only a very shallow thinkier would take all of this perfectly literally.

A serious thinker making a critique of rational choice and utility maximization as the underpinnings of (micro-)economics.

Thanks, smart people of the Internet!

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