A few independent artists have been releasing data that relate to payments from subscription music services such as Spotify. Looking at these various reports, and the apparent increase in “per stream” payouts, I am left to wonder:
Is the number of tracks to which any user listens during any month actually falling for services such as Spotify? In other words, is average “user engagement” (if measured as tracks streamed per month) falling?
Or, are free users simply falling away?
Since privately shared data is, well, private, I can only discuss recent payout data reported publicly by bands such as Uniform Motion. This group recently reported that their payouts from both Spotify and Deezer increased (in the EU, no doubt).
From Spotify, the payouts increased between 2010 and 2011 from an effective €0.0033 per stream to an effective €0.0047 per stream. From Deezer, the payouts increased as well, from somewhere in the ballpark of €0.006 per stream to a somewhat astounding €0.0127. Converted to dollars that means the band is receiving greater than
$0.60 $0.0074 per stream from Spotify and and astounding $0.0165 from Deezer.
Now, since most of these deals are likely structured on a percentage of per user revenue basis and few users are causing any per stream minima to trigger payments greater than the user subscription fee, I have to wonder how the effective payment per stream is rising.
As Spotify and other services like Deezer incorporated restrictions upon the length of term over which users were provided free access to the services, the number of active monthly users seems to have stalled a bit. These services are still growing, but at a slower rate.
Furthermore, if you peek at Daily Active Users, as compared to Monthly Active Users of the Spotify Facebook app (thanks to AppData), it seems that daily active users have been rather stable (i.e., no growth) as monthly active users increase.
As the number of free users peeled away, we would expect the effective per stream payout to increase. Furthermore, since the total number of users is not increasing drastically (any growth being culled by extant free users falling out) it would seem that ad revenues are not on a major upswing.
And so, is this increase in effective payouts a simply function of free user fallout? Or, are paid users losing interest in the services such that their monthly payments are being divided among a smaller number of monthly plays?