[00:00:00] James: Welcome to episode 195 of the Bandhive podcast. It is time for another episode of the BandHive podcast. My name is James Cross, and I help independent artists tour smart. This week, I'm really stoked to welcome back onto the show, Matt Hoos of Alive in Barcelona. How are you doing today, Matt?

[00:00:16] Matt: James, I'm doing fantastic. It's a beautiful day here in Colorado. Nice and warm before the early hours of the morning, which, you know, sucks a little bit for gingers like me. But, I choose to make the most of the seasons. I live in Colorado where we have four seasons. So you know, I can't really complain about that.

[00:00:33] Matt: It's good pool weather.

[00:00:34] James: Yeah. Oh man, a pool sounds nice right about now. Maybe not so much because uh, it is gray and rainy here and don't get me wrong, I love the rain, but my town, which thankfully I live up on a hill, my town was literally underwater. A couple days ago, and, and we're recording this mid July, considering that this comes out on August 22nd, so if you heard about the floods a month and a half ago in Vermont, that was my town.

[00:00:57] James: thankfully… No one died as far as we [00:01:00] know. So it's only property damage, which sucks, especially for people who lost stuff of sentimental value. We got really lucky up here that our worst situation was water coming into the basement through our uh, electrical conduit cuz the line, the lines are buried. But I taped a funnel to a hose and put it into a bucket, so we made it through that as well.

[00:01:18] Matt: Ingenious.

[00:01:19] James: I MacGyvered it. Watching that series definitely counted for something.

[00:01:24] Matt: That's right.

[00:01:25] James: So we made it through. And thankfully, we don't really have anything to complain about.

[00:01:31] Matt: yeah, I was like, I'm glad you guys are all safe. flooding is, brutal. And this season's been, I don't know how extra rainy it's been over there, but it's been, it's been very rainy over here too. So, I, I feel that. But, I like the rain.

[00:01:45] Matt: I don't complain about rain. What should we complain about, James?

[00:01:48] James: Well, I'll tell you what. People who complain about Spotify. We're gonna complain about the complainers.

[00:01:53] Matt: Yes. Complaining about complainers. This is meta.

[00:01:57] James: No, no, no, no, we're not talking about Facebook or [00:02:00] Instagram today.

[00:02:00] Matt: no, today we're talking about the bane of every musician's existence. The dreadful Spotify. Boom, boom, boom.

[00:02:09] James: Indeed we are, and I just want to preface this and say, I agree that Artists should get more money from Spotify. But I absolutely do not agree with the people who complain about Spotify and say, this is terrible. We need double the payout, blah, blah, blah. No, no, no. that's not how it goes. We have a laundry list of reasons not to complain about Spotify. The first one is free promotion. Matt, you're the marketing brain here. You want to talk about this?

[00:02:36] Matt: Yeah, I mean, Spotify is a worldwide endeavor that literally pumps… Billions of dollars into marketing each year. You know, they're a global distribution network. people are still learning. You know, especially musicians. You know, we like to be as dumb for as long as possible. And so,

[00:02:53] James: That's going to be a TikTok thing right there.

[00:02:55] Matt: Absolutely. I mean, we do. You know, musicians are like, you start off [00:03:00] being a musician because you're like, nah, I'm going to run away from reality and responsibility and I'm going to be a touring musician. And then once you realize that it's like running a business and it's like way harder than you ever expected and then before you realize it, you're just like grumpy about dumb things, Spotify works.

[00:03:15] Matt: musicians still don't understand how the internet works. Lars Ulrich complained about, you know, the internet and his music being stolen for forever, while simultaneously still releasing his product on the internet. the internet is a global distribution network. Spotify is a global distribution network.

[00:03:30] Matt: And that's how you as an artist need to look at it. And a distribution network how many of you have ever been paid by people that distribute your music? Never. You pay the distributors to distribute your music. And so what Spotify has done is effectively mitigated the cost of your distribution.

[00:03:47] Matt: And they've also, basically interconnected with some of these other larger music endeavors, like Billboard and things of that nature. So where your streams actually count towards things like, you know, your platinum status and [00:04:00] whatnot. Now, There's a lot of arguments that can be made that Spotify really cripples that, or that the number of streams, per song doesn't really equate to what an album sale should be.

[00:04:10] Matt: And there's a lot of nuance there, so those things could definitely be discussed, and a lot of good quality content found there. But the biggest thing that you need to realize is that Spotify is there to make the world… able to hear your music. when you put something on Spotify, you are basically agreeing to being a part of a global distribution network.

[00:04:28] Matt: You just said, Hey man, I'm a fish in the sea and I want to be caught, but. Nobody's going to be able to find you without a fish finder. And that's what Spotify is. Spotify is the fish finder. Now, it doesn't necessarily mean that somebody, you know, your top bands are going to immediately find your music. mean that they're ever going to find your music.

[00:04:46] Matt: But it does give you much more of a chance. And it also has revolutionized the way that music is distributed. And honestly, it's slowly but surely making its way towards how music is released, how music is produced, how marketing [00:05:00] releases are planned. there's a whole bunch of like downstream effects that these things have.

[00:05:05] Matt: But the biggest thing that people need to realize the risks of putting your music on a global distribution network is that. The monetization of each individual time your music is played is going to be significantly less. back in the day, we would have singles on the radio, you know, now a band would go out record 10, 12 songs or whatever and then they'd put a bunch of money into a release for one or two of their singles and they would blast those on radio stations across the country, paying tons and tons and tons of money to do so.

[00:05:34] Matt: And If some of those songs would catch, then when you released your album, you had the opportunity to monetize on your 10 to 12 to 15 CD. that's changed a lot. the biggest thing is, you know, for those of you who remember buying CDs on a regular basis after only hearing singles, it was a total roll of the dice.

[00:05:50] Matt: You know, you'd be like, well, I really hope the rest of this album is good. I heard two songs off it. I'm gonna go spend my, you know, 12 that I've saved up. And. You might end up [00:06:00] with, like, the two good singles that you liked and a bunch of other awful songs. Lost profits. So, there was a paradigm shift when iTunes came out, and they basically made it possible for you to download each individual mp3 for 99 cents.

[00:06:12] Matt: they effectively decimated. framework for the album sale was. framework for the album sale is you get 10 per sale. Well now, if somebody likes just the singles, not only could they just buy the singles, but they could also sample 30 second clips of the other tracks on the album and decide if they like those to buy them.

[00:06:27] Matt: Now, this created a very weird schism in the music industry. This caused for the total number of dollars that were coming in per sale to be cut down by nine tenths, because now you couldn't spend 10 bucks. Now you could spend 99 cents and that's all you needed. All you needed to have happen.

[00:06:45] Matt: But one of the really cool things that it did is it kind of forced artists to be focusing on each and every aspect of their album. Now you couldn't hide eight crappy songs behind two good ones. this, you know, kind of forced a bunch of artists [00:07:00] into a better. writing structure. And so where, you know, you started having artists that were recording a lot more songs and then letting producers like sift between them and saying, these are your good ones, these are your bad ones.

[00:07:12] Matt: that was back when the music industry still had a huge production budget. And so producers could really come in and produce songs rather than just being an audio engineer and tracking them. So, with Spotify, when it came out, it basically put the nail in the coffin.

[00:07:26] Matt: it buried what iTunes killed. So, now, instead of the single individual sale, first it was decimated. From 10 to 1. Now, it was for you to make the equivalent amount of money as selling one song, you need to, you know, have, let's see, to make 99 cents, you need like what is it, how many streams is it, James?

[00:07:46] Matt: I'm sure you've got a figure for me.

[00:07:47] James: Yep, two hundred sixty three, two hundred sixty four, about that.

[00:07:50] Matt: that's to make your 99 cents.

[00:07:52] James: Yes. Now, that Spotify. Spotify other platforms are typically higher. And we'll get to why that's not a Spotify problem.

[00:07:59] Matt: [00:08:00] So, when you have iTunes decimated the first thing, so you go from 10 per sale to 1 per sale now, and then you need somebody to listen to your music 268 times in order for you to recoup that single dollar expense that even iTunes took. Alright, so now it's like, oh man, I'm getting no money.

[00:08:19] James: one other thing to consider about this though, is iTunes would only pay you 70 cents out of that.

[00:08:24] Matt: That's true. the 99 cents that's what the total cost was. That's not what, the total profit was. So, in reality, it's so it's going to be, you know, 30% less than that. So you're looking at 100 and like 90,

[00:08:37] James: 184 plays on Spotify equals one iTunes sale.

[00:08:41] Matt: 184, and if you just do a little basic math, you know, if you have a three minute song, you know, that's Five hundred and fifty minutes worth of playtime for you to equal what one sale was So, you know, it's really easy for an artist to look at all these figures and say like, Wow, we, we, there's, there's no money here anymore.

[00:08:59] Matt: [00:09:00] This has all been, you know, this industry's dead and Spotify is to blame. It's like, well, no, because back in the day you make 10, but. in order for people to have even heard your single to begin with, you're paying 500 per radio station for them to even play it.

[00:09:14] Matt: So, let's say you want to roll that out to 20 radio stations, you know, a single small network across the country, and, oh, well, we've got to pay the gatekeepers. Alright, well, I'm going to need an 8, 000 marketing budget. Oh, okay, well now… Spotify has taken care of that 8, 000 marketing budget and it's really cool because they've supplemented that cost by getting, marketers to come in and pay ad revenue.

[00:09:35] Matt: not only do the people have premium memberships, but also with ad revenue, people are able to come in and listen to a song here and there. And you're still able to tap into that global distribution network without ever really paying a penny.

[00:09:48] Matt: that's huge.

[00:09:49] James: Absolutely agreed. And I think there's a couple things that I want to pick apart here, Matt, and go into in more detail, because you're absolutely right. The first being that when we talk about iTunes versus [00:10:00] Spotify, they actually both pay. The same percentage to the rights holders and when I say rights holders, I'm talking about artists and songwriters.

[00:10:08] James: Artists may or may not be the record label because very often the record label collects artist royalties until that artist has recouped on that release, which recoup means they've paid back the advance. Everything the label gave that artist. Financially has been paid back. And so that's why when you hear a lot of major artists complaining, Oh, I got 20 million plays and I got like a hundred dollars from Spotify.

[00:10:32] James: It's like, well, yeah, but how many thousands did your label collect?

[00:10:36] Matt: Yep,

[00:10:37] James: down to you having a bad deal with your label. I am sorry, but that is not a Spotify problem. That is you signing a bad deal.

[00:10:44] James: Why are you not complaining about the deal you signed with the label? Oh wait, it's because you opted into that and your lawyer said, Tough luck, so you're gonna go make a stink about something that will get you publicity, get you on the news, and remind people that, you know what, maybe you still are relevant even though you haven't released a good song since [00:11:00] 2002.

[00:11:00] Matt: that's right.

[00:11:01] James: The next thing is, when I say iTunes and Spotify actually pay out the same amount, that's true. Because iTunes would give you 70 cents on a 99 cent sale. That's 70%. Spotify and all the streaming providers in the United States are legally required to pay out roughly 70% of their revenue to the rights holders. And when I say revenue, don't confuse that with profit. Revenue means the money that they take in. That's like if you as a person get a salary of 40, 000 a year, that is your revenue. You don't deduct any taxes. You don't deduct any expenses. None of that. It is simply the amount of money that you collect. that's why Spotify cannot literally cannot double their royalty payouts because that would be 140% of revenue. simply there's no way for them to make a profit on that if they're legally obligated to pay out more than they collect. As much as it sucks to [00:12:00] say music is a business, 30% is a really small wedge to have all your operating costs on. that's nothing, and that's why Spotify operates at a loss pretty much all the time. In 2022, they had a revenue of 11. 7 billion. That And their cost of revenue was 8. 8 billion. Now that's actually higher than 70% because there are a couple things that might also be factored in there such as credit card fees or the Apple in app purchase fees, that kind of stuff. cost of revenue, that right there shows they're paying… About 74% or 75% of their revenue before they even get into their gross profit, which is what they deduct their expenses from. Their operating loss in 2022 was 659 million. They are not a profitable company. They cannot pay more unless they do some things, which we'll talk about. But that said, Spotify being A trickle of income for artists and right holders over [00:13:00] time. Yeah, you know what? That's kind of rough. But, if you look at it this way, you're probably coming out ahead of a physical release. Because when you do a physical release, guess what? You have to pay in advance to have your CDs or your tapes or your vinyl records made.

[00:13:13] James: All of that costs you money in advance, and you might never break even. With Spotify, on the other hand, You're gonna pay like 20 bucks for your online distribution to send it to Spotify, and you're golden.

[00:13:26] James: You don't have to worry about recouping the cost of a thousand CDs or a hundred records. Whatever it is, you're not massively in the hole. So yeah, it might feel nice to sell a record for 25, 30, but guess what? You still have 90 more of them that you might never sell.

[00:13:43] James: unless you know you're gonna sell them, Spotify and streaming in general is the better option.

[00:13:48] Matt: definitely. And on top of that. you have pressing of the discs, but you also have the art in the liner notes, the credits you have the shipping of the physical[00:14:00] element, you know, like making the switch from physical to digital. What most people don't realize is like, when the cost of a CD was 15 bucks, you had all of these other overhead expenses, You know, the label shipping CDs to Best Buy, you know, on Hot Topic.

[00:14:14] Matt: if you were trying to do it privately, it's like you have your own cost of shipping. You go take a bunch of CDs, then you gotta remember each and every order. I every single one of these things that's, Has to be done by a person is pulling away from like time that you could be doing other things.

[00:14:27] Matt: And so while you can say like, Oh yeah, Spotify has decimated, amount of money that's coming in. It's like, well, yeah, but now you can do more. And

[00:14:36] James: operating costs are so much lower.

[00:14:38] Matt: Yep, it's not even a comparison.

[00:14:40] James: yeah, and here's the other thing, too. More costs on that is you might have storage. What happens if you have all your records stored in your house and your house gets flooded?

[00:14:50] James: Now you have to buy new records.

[00:14:51] Matt: That's right. What happens when you're traveling on the road and you have cases full of CDs and one of your cases falls and your jewel cases crack. Boom. Now [00:15:00] you have a whole bunch of damaged products. You know what doesn't get damaged? MP3s. There's no physical damage to a digital element.

[00:15:06] Matt: And so like all of this overhead, all of these expenditures, all these liabilities basically all go out the window. And so the artist as an individual now, I mean, what Spotify has kind of made the shift this paradigm shift in the music industry for is for the individual who wants to write music, you know, never before in history.

[00:15:25] Matt: Can you really have a single individual that's sitting at their computer producing music? they write their own music, they produce their own music, they release their own music and to be able to make a living. It takes an entire team of people. It takes marketing teams. It takes production teams.

[00:15:39] Matt: It takes, PR companies. It takes labels. It takes managers. It takes booking agents. It takes everybody in the band actively working. But with each and with technologies, specifically with these awesome tools that allow for the automation of certain processes to empower the individual to deliver a high quality product with little to no [00:16:00] overhead whatsoever.

[00:16:00] Matt: Now, you can get versions of Pro Tools. You can get really cheap plug ins. You can get home interfaces that are the size of the palm of your hand. You can get cheap microphones that plug directly in, like, The tools that are available to people nowadays, I mean, I can make synthetic rooms, I can record something and build a fake digital environment and choose whatever amp I want and put that in that room.

[00:16:21] Matt: Now, is that going to be the best fidelity in the world? No, it's not. high end audio engineering is always going to sound better. But, I could show you guys some music that you would never believe was recorded in, you know, the corner of an upstairs bedroom with a room mic and a DI, It's absolutely incredible with the tools that we have nowadays in order for someone in Bangladesh to hear, Joe Schmoe's album, you know, that he just released because he put it out and a few people liked it up out of the get go and Spotify radar finds it and decides it's going to push it to some random people in Similar districts whatever their algorithm decides that, you know They want to push it to and all of this is free [00:17:00] marketing, between Spotify?

[00:17:01] Matt: And Facebook and social media in general you had To get online and you send everybody all these messages. if you're lucky, if you were smart, you did mailing addresses and you got email addresses from people and you would try to build street teams and you would try to, you know, make these true quality fans that would develop networks of people that they would all incentivize each other to come to the shows.

[00:17:22] Matt: And so you basically had, street teams working on the ground before you ever got there. Well, now we live in a day and age where you don't have to, like, go and individually like people's posts and send them a personal message and stuff like that. It's like I remember doing this for years and years and years where it was like, Oh, we hit our 100 limit on instagram.

[00:17:40] Matt: We can now no longer comment on on people's stuff. And there were these natural barriers in the industry that prevented you from actual distribution. Now that channel is open. You know, there's no more damn. Now, the river flows. Now, it's up to you to control the raft. you can land anywhere. But, You need to understand the concept of what you're [00:18:00] trying to do. then, you know, when you say like, Oh, I don't understand why people steal my music. I put it on the internet. It's like, well, that's because everything you put on the internet gets copied. I send my…

[00:18:09] James: on Bandcamp.

[00:18:10] Matt: Exactly. I the reason people don't understand how Spotify works is because people still don't understand how the Internet works.

[00:18:15] Matt: Like when I post something on the Internet and I send it from point A to point B, it still exists in point A. it's like an idea. It's not like an apple. If I say I have an idea and I tell James that idea. Now we both have an idea. If I say I have an apple, I give that apple to James. I now no longer have an apple.

[00:18:31] Matt: The digital world works like the idea world where As I send my song, if I put it on the internet and I send it from point A to point B, it's still on my iTunes. It's still on my iPod. It's still in all of my databases. And it now also exists with a carbon copy somewhere else on the internet.

[00:18:48] Matt: the internet is, the fundamental pillar of the global distribution network. That's why it's one of the most powerful tools in history, that's why people who build their own websites, basically took the cost of running a brick and mortar shop, and decimated it.[00:19:00] [00:19:00] Matt: It's doing the same thing. does the same thing to all these industries. It cuts down on all of these overhead liabilities and allows you a much, much, much larger distribution network. So then you can allocate your funds, which you know, you were doing for like, Oh, I got to make sure there's carpet in my store.

[00:19:15] Matt: Got to make sure that the inventory is full. Well, now you can take that money and say, I'm going to put 500 into YouTube marketing. I'm going to put 500 into Facebook marketing, and I'm going to run a campaign for two weeks. And then. Not only that, I'm going to get digital analytics. I can tell which targeted districts, which targeted areas my music is thriving in.

[00:19:34] Matt: And then I can use those analytics to figure out where I'm going to tour. And you can say, Oh, I have a bunch of fans down in Texas and a bunch of people that buy shirts in Oklahoma. Okay, well, I know that on our next tour, we're going to go over to Oklahoma and down to Texas. those are going to be big staples, because I have all of these demographics directly from Spotify where they're telling me when people are listening to my music, where they're listening to my music, how much that, you know, you can even launch [00:20:00] merch stores through Spotify, and you can see how much money you're making off of merch sales, you can then run a dropship store and send stuff directly to them, and you have wiped your hands completely Clean from so much of like the, tedium that comes with running a business.

[00:20:14] Matt: And all of these are available with awesome technologies like Spotify.

[00:20:18] James: Absolutely. And it's so important to recognize that. Yeah, again, I think Spotify should pay more, but with the current structure, they can't. And so here are two potential solutions that I have been talking about for years. And I don't think Spotify is going to do even one of them anytime soon, but it would solve a lot of the problems because Apple music, their average payout is just about twice what Spotify's is.

[00:20:46] James: Apple does have fewer users, however, they don't have a free plan. So, the first solution for Spotify is to increase prices. They could do 20 a month or even 30 a month. I would totally be down [00:21:00] to pay a dollar per day for the music I listen to. I would be 100% fine with that. That would increase the amount they can pay per stream because they're still going to pay 70% of revenue. That said, they would probably get a lot of users who would churn, which churn means users who were subscribed and then they unsubscribed for whatever reason. In this case, it would be the price increases they're going to churn. So the revenue that Spotify gets could actually stay the same or maybe even decrease depending on how many users stop paying for Spotify, which would mean ultimately you're getting a higher per stream rate. money overall if the company is bringing in less revenue So there's pros and cons Spotify would have to test and find the exact point Where they can maximize revenue because personally I would much rather have more people listening to my music at a lower per stream rate if it's gonna be the same or even just roughly the same amount of revenue like if I can get a [00:22:00] thousand people listening per month at point zero zero three eight dollars so Three tenths or almost four tenths of a penny per stream.

[00:22:07] James: I would much rather have that than get the same amount of money from 200 people listening.

[00:22:13] James: Because I want a thousand people listening who can then go out and buy merch, come to my shows, all that kind of stuff.

[00:22:18] James: going to be even roughly, exactly, if it's going to be even roughly the same amount of money, I want more people listening.

[00:22:25] James: Because I'm not looking at that per stream, I'm looking at how many people are engaging with my music on Spotify, and what's the total amount I'm getting. And if you can increase that, money, that is great. But don't do it if all of a sudden you have half the fans listening to you, or a quarter of the fans listening to you.

[00:22:43] James: That's not a good solution. Now I will say that Spotify hasn't increased prices in a decade. when they launched it was 10 and it's still 10. Everything else has gone up. So I think it would be totally fair for Spotify to increase their prices. Hulu's gone up. Netflix has gone up. Whatever other streaming [00:23:00] provider. They've all gone up.

[00:23:00] Matt: Not only have they all gone up, yeah, not only have they all gone up, but also individual producers have started streaming their own things, and so they've been pulling the rights from places like Netflix. You know, now we have Netflix, and Paramount has their own thing, and Prime has their own thing, and, and Hulu has their own thing, and Disney has, like, Hulu and Disney, Disney Plus, they're both owned by Disney.

[00:23:20] Matt: Why do they have two different platforms? Well, it's apparent why. Because they're targeting a different audience. And instead of decimating, you know, their overall user base, they're going to say, no, let's divide these into two platforms, focus on a specific target audience, and go from there. everybody's dividing up.

[00:23:35] Matt: And the prices are increasing. So it's like, you know, what does that tell you? That, Netflix is now twice as expensive and has half the content really. that's an increase by, four X. So you have to kind of look at the whole picture. and the biggest thing is you have to understand what your purpose is.

[00:23:50] Matt: Lars Ulrich went out there and was like, I'm gonna put my music on the internet and I'm gonna make tons of money from it. It's like, no, that's not how that works. Lars, you're going to put your music on the internet. And that is going [00:24:00] to allow for more people to find you, which will allow for more people to come to your shows.

[00:24:04] Matt: So, there's a reason that a lot of major artists, who are at the top of the game already, do not release their music on streaming platforms right out of the gate. As a matter of fact, when Spotify came out, there was not a single platinum artist. Until Taylor Swift. And she decided that she wasn't going to release her music on any streaming platforms whatsoever until after she hit her platinum status.

[00:24:26] Matt: She released the album, made her album sales, and then she brought in the Spotify money, which she used, as I'm sure, as some form of residual income. That was more like a cash flow or a long term equity. And so, It's a little bit different framing when you understand it's like Spotify is never going to be your cash cow ever.

[00:24:44] Matt: if you have that mentality, you've already lost. Your cash cow is touring. You need to go. You need to play shows. People want the live performance. They want the once in a lifetime experience. Then they want to go and they want to buy a shirt. Or them and their best friend go together and they both buy a shirt and it's an experience for them.

[00:24:58] Matt: this is why the live [00:25:00] show is so important. This is why people that are headlining make writers that say their openers are not allowed to use lights and things like that, because they don't want somebody upstaging their show as the headliner.

[00:25:11] Matt: And deeper you get into the music industry, the more you start to see these things pop up left and right, where it's like, I've seen some of the best light shows I've ever seen. from an opening act when they came back on tour by themselves. I just saw the plot in you like last year, and holy cow.

[00:25:25] Matt: I've probably seen them five or six times, and nothing was as incredible as their live show because they were trying to create an experience for their fans, and they do a wonderful, wonderful job of that live. but when they're an opening act for some other larger group, then they're not allowed to do that.

[00:25:41] Matt: well, they're not allowed to do that within reason.

[00:25:43] James: Yeah, absolutely. It's all about that experience. And I think that's something else that Spotify has absolutely nailed. They've done it right, is they have a free plan. I do not like the free plan because your per stream payouts on the ad supported plan, the free plan are so much lower because [00:26:00] the revenue is lower.

[00:26:01] James: So that brings the average Down. And that is the main difference between Apple Music and Spotify. Apple Music doesn't have that free plan. So, the other option would be Spotify can eliminate the free plan. The problem with that is that it's a source of new leads who can turn into paying customers.

[00:26:16] James: So, Spotify doesn't want to get rid of that their lead gen funnel is bringing people in through the free plan. Now, personally, I think stricter limits, something like saying, Hey, you can only listen to two hours of music the free plan. That might work really well, but it's still a risky move. So, with all that said, I want to shout out this really cool, super complicated calculator I made. It took like two days to build. And it will take the amount that you would pay to get a physical release made. And calculate that for the exact number of Spotify streams that you need to break even. So let's say you get a thousand CDs made and it costs you 1.

[00:26:56] James: 50 each, and you're going to sell them for 5. That's a profit of 4. [00:27:00] 50, assuming that you charge for shipping rather than doing free shipping, blah, blah, blah. Like it, it makes some assumptions. It will then tell you based on the number of songs that you have on that release, exactly how many Single song streams and full release whether it's an EP or album streams are needed to break even with that 450 profit that you'll be making on that physical sale, and I think you will be surprised by How quickly Spotify breaks even if people actually enjoy listening to your music and the other thing is you can't look at it as a one to one ratio and say oh Well, you know somebody has to stream the song 200 times to break even that's ridiculous.

[00:27:38] James: That's not gonna happen You know what? Maybe your superfans are the only people who will listen a hundred or two hundred times. What about all the people who listened to you a handful of times and that's it? They never would have bought anything from you, but they listened ten times to a song. Cool. Now you have four cents from that person.

[00:27:54] James: Get a hundred people to do that, you have forty cents. It adds up.

[00:27:57] Matt: Get one

[00:27:58] James: Every little bit. Yeah, [00:28:00] exactly. If they come to a show, maybe they're just a, casual fan, but they see you're coming through their town, and they'll go to a show, they'll buy a ticket, and they'll buy a t shirt. Maybe they'll buy a physical pressing at your show, because it's there, and they don't have to pay shipping.

[00:28:12] James: There are so many ways that you can monetize. In the music industry that don't involve complaining about Spotify. So stop whining about your Spotify payouts and just factor in the convenience of being able to reach pretty much anyone in the world with your music. By using Spotify, the savings you have by not paying upfront for physical pressings of vinyl or CDs or tapes, any of that, that's huge.

[00:28:37] James: And third. Be willing to pay more for your music. Because I see a lot of people who are like, No, I don't want to pay more. They should just double the rates. Like, well, they can't double the rates unless they double the price. So if you're not willing to pay 20 for music, why do you want people to pay more for your music?

[00:28:53] James: That does not make any sense. you're going out there and talking about wanting more money, you have to be able to [00:29:00] put your money where your mouth is and support artists.

[00:29:03] Matt: Boom. Literally exactly what I was gonna say, James. I mean, you put it perfectly. It's like, if you wanna pretend to support something, then stop pretending. Technology is one of these things where you can no longer live in the gray area. inputs and outputs. It's basic logic. It's either a 1 or a 0.

[00:29:19] Matt: It's on or it's off. And when you take your money, and you put it where your mouth is, and you support somebody, you know, you don't go to your friend who's a baker and say, Hey, will you make me a free cake? No. When you want to support that friend, you pay them as much as they want. them

[00:29:31] James: you'll go the distance.

[00:29:32] Matt: Yep, it's your friend. If you really believe in them, and you love them, and you care about them, like we all have songs that have literally just touched straight to our core, and if you believe that that music has shaped you as a person, if you believe that that music has really helped you grown into who you are, then why in the world would you not want to pay that artist what they're worth?

[00:29:52] Matt: And that's the more important question. Why complain about Spotify when you can complain about yourself?