Are Streaming Platforms Ripping Off Artists? The Realities of Music Income

Hello and welcome to the show. Taking today's recording from my desk at home. So apologies if there any interruptions while we're recording, if this is our first time listening to the show. The goal of this show is free business education. So you're in the right place. And please, when you're done, share, promote, talk about the show so that Nigerians both home and abroad can benefit from all the questions that we tackle over here.

Get them to subscribe Spotify, YouTube, Apple or any podcast player of their choice. And if you have any sales or marketing questions, then bring them to me by calling, sending me an SMS or WhatsApp message on 08064662140. Now, today on the show, I want us to look at the question honestly. Tackle the question of whether streaming sites like Spotify are stealing from artists. The reason why we're going to tackle this today is because,

you know, lots of us are trying to do all kinds of hustles and, you know, we have creatives among us. Like I used to be in the event space. I used to do photos, my brother used to do video. So, you know, I still hang around some creatives and we still have conversations every now and then. So not everybody is trying to do a business like the fellow I mentioned yesterday who wants to set up a factory for producing engine oil for marine engines,

or the other guy who's in the pharmaceutical space, or the young lady from, I can't remember how many days ago that she's in the gifting space. So not everybody's doing something that is concrete. Now. Some of us that are doing stuff that are, you know, creative and like most creatives, we seem to have certain airs, certain opinions, certain gripes, as in we creative shower always in always in our fields. So in conversations that I've been having with recording artists, you know, there's some people that say, look, Spotify is a sham, is a fraud, that stealing from artists.

As I was conversing with one guy and I was like, come, white people say all these things. What do you mean? And the guy said, you know, Snoop Dogg as of course, now we all know Baba, now we all know Snoop Dogg. You say as big as Snoop Dogg is, how much does Snoop Dogg get? I said I don't know. And the person said that look, Snoop Dogg, for every 1 billion streams, the guy collects $30,000. I say he's a lie. The guy said go and check it.

That's OK, no problem now. So I carried my phone and went on Google. I started, you know, searching proper, you know, just searching up and down and them it actually seems to be the case, except if I didn't find the right information, it actually seems to be the case that even the correct guy, you know, a Baba like Snoop Dogg will only receive $30,000 for everyone beyond streams. And I was wondering, well anyway, you know what I usually do now?

So I just quickly did $30,000 and I've converted it to naira just to see how much, and it converts to 48.2 million naira. And I was wondering for 1 billion streams, not a million streams or 1 billion. So well, it looks as if the money is not that big to be honest. Is that good money? I don't know. I'm not in the industry. So I don't know if for 1 billion streams you're only collecting thirty $30,000 US, which is 48 M Niger.

I'm not sure if that's big or small because I'm not in the industry, but at least I understand where these people are coming from. Because me, you know, as per I'm a normal person, if I hear 1 billion streams, in my mind I'm thinking you're counting money in billions or millions of dollars as a layperson. So I don't know if that's good or not. But one thing I found out for sure is that even Spotify payments, you know, it depends on which country you are streaming from.

So it looks like people in America and the UK, they get more money than Nigerian artists, which is something I've heard before. So from my small snooping around on Google, it looks as if that's the case, that American artists and UK artists will make more money than Niger artists. Which was also a shock to me because I assumed that, you know, it doesn't matter that if Snoop Dogg can get 1 billion streams and two face can get 1

billion streams, you know, the money will, the money will tally as the money will be equal. I didn't know that there's a difference, but I'm sure there's a reason why. So like I said, whether this is good money or bad money, I don't know. But at least I now understand where some creatives are coming from. You know, when they shout up and down, up Spotify, Spotify is like this, Spotify is like that. But I want to ask some questions though, for those of you who are creatives.

Is Spotify income the main thing Is that the cocoa that we should be looking out for? So yes, you say it's coins, OK, The coins that we're going to get from Spotify, whether it's coins or whether it's correct bar, is that the main thing that we should be looking for? In my own opinion, the answer is no. Spotify streaming is not the main thing that we should be looking out for. So even if next year they change it and let's say 2 face does 1

billion streams and then on that 1 billion streams they pay him $2 billion, I still think that is not the main thing that we should be looking for. So the streaming money is important, yes, but excuse me, I think sometimes we're focusing too much on the talent of the artists or focusing too much on ownership and we're not paying enough attention to distribution. Let me repeat, when Nigerian artists are shouting up and down, they're paying too much attention to talent and ownership but not distribution.

Because usually people when they're shouting up and down like this, you know, they think they're talented. You might be, you might not, but they think so, or they think the most important thing is the talent or the musical ability of the artist, and the most important thing is the ownership. You want to own 100% of every single thing that you do own your own intellectual property. It would be nice if that can happen because people like Dolly Parton.

Dolly Parton owns her music 100%. Who again? This small girl, what's her name now? OK, now let me not say small girl before people will attack me. She's more like a young woman now. Taylor Swift. Taylor Swift owns her own music 100%, who again, not too many people own the intellectual property. The intellectual property 100%. But those are some people. So it would be nice if you can do that. But honestly, distribution is what makes the creative monetizable.

Let me repeat, it's not necessarily how good your talent OR how much you own, but it's distribution. Where are you showing up? Are you showing up everywhere? That is what leads to other opportunities that you can monetize later. So some people say Davido has no talent. I'm not saying that, but some people say he has no talent. Some people say he's very talented. But The thing is, regardless of his level of talent, if Davido did not have distribution, if he was not everywhere, the opportunities to monetize that he has today would not have come.

So regardless of his talent OR regardless of how much he owns of his intellectual property, the reason why Davido has big bar today is because of the distribution that he was able to achieve. Let me repeat, it is not just about talent and it's not about how much you own, but it's also about distribution. Where are you? Are people seeing you? Are they hearing you distribution? So if you do music or you do podcasts like me and you're on Spotify, please, please and please know that we are doing it first for the distribution.

When we have huge distribution, we are everywhere. Everybody knows us. We can now start exploiting other opportunities that arise. So if one day my podcast gets so big that Spotify starts paying me some coins is good. But the main thing is not the coins that I'm collecting. The main thing is the distribution. So creatives, please, you will be listening. It's a shame that Snoop Dogg will only collect $30,000 after 1 billion streams.

But the main thing is the distribution, especially for those of us in Nigeria, for those of us in this part of the world. Now the reason why I say the main thing is the distribution is this. There are other avenues for making money beside streaming, just like Snoop Dogg. If he was based on Spotify, this small $30,000 that he gave him for 1 billion streams, it was based off, it was based off the Spotify, this 30K Snoop Dogg will be soaking Gary because how much is $30,000?

And of course, you see the way that Snoop Dogg leaves his life, you know the houses, the cars, you know everything, the bling, how much we $30,000 buy. So if he's just because of those coins, Snoop Dogg will be broke. However, old musicians, whether Snoop Dogg or Two Face, they know that it's not just about the streaming or the publishing, It's also about merchandise. What merchandise are you selling? That is why Snoop Dogg, back in the day, they had their own merchandise, you know, the T-shirts that they used to sell and stuff like that.

Merchandise, then endorsements. 2 Face knows that which is why you can see Two Face. You can see two face on Oramo equipment is Oramo ABI Oriyamo. You know you can see him on all those things. Born a boy endorsing was his company the one that used to do international money transfer. I can't remember their name. Davido. The face of this is alcoholic brand that was sponsoring him before, but now he has his own line, you know, so people know that, look, it's not just the coins that is coming from streaming, but merchandise.

How much merchandise are we moving? Endorsements? Which endorsement can we secure? Then concerts. That's precisely the reason why you were here today that Davido is in America, or he's in South Africa, or he's in Dubai, or he's here, or he's there because there's also concert money to be made. See, these are the things that when you're able to achieve, remember what I said, distribution. When you can achieve distribution, it is there.

Now all these other things will begin to start opening small, small. You can only sell merchandise. When you have distribution, you're everywhere. People know who you are. You can only get endorsements when you have achieved distribution, you're everywhere. People know who you are. Nobody will invite you to concert if you don't have distribution and people do not know where you are. And then this whole thing of artist websites, because people are talking about local streaming sites and artists should make your own website.

Well, OK, all well and good. Yes, we should have a Nigerian kind of Spotify or Nigerian kind of iTunes. All well and good. Somebody should start it, no problem. Or you build your own websites, no problem and stream from there. But The thing is, if there is no distribution, people are not going to go and download your app or look at your website because you don't have distribution. Nobody knows you, nobody sees you, nobody hears you.

Why would they go and check your website? So it's from getting distribution first that you can now send people to your website. And if you're smart, you have e-mail lists. As a musician, you have an e-mail list, you have your fan club, and then you'll be able to do direct sales from your website as well. So you can now get bigger money from there. So if it's that Spotify, the coins that is coming from Spotify is not much like let's say Snoop Dogg for instance.

But The thing is, because Snoop Dogg's affiliated with other record labels and other streaming sites, it's possible that you can leverage your popularity on Spotify and direct people to other places where they can buy your music and then you get a higher cut. But either way, the distribution is the thing that comes first, not your talent and not your ownership. The ownership is goodo if you own your music 100% like Dolly Parton is good if you own your music 100% like also name again Taylor Swift you know is good over the long time.

But in the beginning, if you have distribution and your talent is 0 and you have distribution, but your ownership is maybe 2%, well, it might be rough, but you know, go bad. At least you have distribution. At least you have options for the future. So my advice for creatives is this, whether you're a podcaster or whether you're a musician, focus on distribution first. Because remember for other kinds of businesses, people talk about know, like and trust that.

If you achieve know like and trust, then people you'll be able to get sales. Know like and trust just means people should know you. They should like you, they should trust you. The first part of The thing is they should know you. That is why distribution is key. People suppose know who you are before they can be rushing for your merchandise, rushing for your concerts or trying to look for your website or trying to follow on your Instagram.

People have to know you first. So knowledge comes first before all the other opportunities. So we should be focusing on distribution and in my own opinion, that is the main reason why we are in relationships with Spotify, Nigerian creatives, African creatives. That is why we're there because Spotify has cracked the African market. If you become a big streaming artist on Spotify, it is something, it is the kind of attention that allows you to now sell merchandise, that allows people to now endorse you.

They will say, ah, you don't know this person, oh 50 million streams on spot on Spotify, blah blah blah. Don't now invite you for shows. That is where the thing starts. So please, the marriage that we have with Spotify, Nigerian creatives, African creatives, is not because we love Spotify or because we don't know that we should be doing business amongst ourselves. It's just that, look, now we need the distribution. And for Spotify, that is where the distribution is.

Let's use my own podcast. Let's use my own experience globally. If you take iTunes and every every smash it all together, 67% of my listeners are Nigerian, 20% is America and then surprisingly the next country is is it a Korea, Korea and I'm wondering Korea, is it a Koreans like Nigerian stuff? I busy that we have Nigerians in diaspora and lots of them are in Korea. So you know, I don't know, but see 7% of my listeners in Nigeria, Nigerian, I guess what,

96% of those Nigerians, guess where they found me? They found me on Spotify. And you guys have been handed every single time I'm saying shout out to this person, shout out to that person. I always say the person found me on Spotify. When was the last time you had me say shout out to? So, so, so, so who found me on iTunes? When was the last time? I don't know how Spotify has done it, but they have penetrated the Nigerian market.

They have penetrated the African market and for some reason they have penetrated through the youth. So I don't know how they did it, but The thing is they have done it. So for podcasters, Spotify, it's a big deal, at least for Spot, For podcasters who are trying to reach out to a Nigerian audience like I am, Spotify, it's a big deal because the Nigerian youth, that's where they are. That's where they will find you. The distribution.

Remember that is where it is. So yes, Spotify is not giving me any coins. It would be nice if I have some small, small coins coming once in a while, but I haven't hit the threshold. But regardless of whether I hit the threshold and regardless of the coins that I get, I will still be here. I will still be married to Spotify because it is a marriage of convenience. The people that I'm looking for, the distribution that I want to get, that is where it is.

It's on Spotify. So my advice to other creatives, your podcaster, your musician, continue with this marriage, even if it's an abusive relationship. I'm just being metaphorical. I'm not saying anybody who stay in in an abusive relationship, but I'm saying this relationship is an abusive relationship. The coins is not much and no problem. Stay here while the opportunities exist and while the distribution exists. Tomorrow, if there's a Nigerian version of iTunes or Spotify or whatever and the thing, you know, kicks off now, yes, by all means, let's all run away and let's move to that one because that's where the attention is.

But for now, let us stay here because the love is hot, the opportunities are here, so let's continue. It's about distribution. Please, creatives, remember, it's about distribution, Distribution. I've heard some unfortunate sentiments out there among creatives, and let me just repeat one of them. One guy told me I'd rather sell 10 copies of my music by myself than have 5 million streams on Spotify. Let me repeat, you heard me correctly.

I've had a creative tell me I'd rather sell 10 copies by myself through my website, not to have 5 million streams on Spotify. I hear those sentiments and I think, is this guy thinking correctly? What's important? OK, he thinks ownership is important. You sell by yourself, you own everything 100%. OK, yes, you hear it, but then nobody knows your craft. And as creatives, as musicians and podcasters, it's a painful thing that we're putting stuff out and people do not hear the good stuff that we're dropping.

I cannot believe that there's an artist who really thinks is important to own 100% and only sell 10 copies rather than be collecting coins and then 5 million people hear it. Please do. If you're a musician, your first point of call is to make sure that 5 million people know your music and hear your music. That's the first part of call, even if you don't only think 100% because at least the 5 million Nigerians know your voice anyhow.

Anyhow, shall we can make some things happen with some creativity, we can rough it. So ownership is not really the main thing. And by the way, I just say, OK, let me bring up my phone. Let me just run small numbers. I did small Google research again. So based on what the guy said, 5 million streams, I wanted to find out how much would a Nigerian artist make or 5 million streams. And so you know that whole thing I told you that yes, Americans and people in the UK, they make more than those of us in Niger is a pity.

But anyway, that's the way it is. So it looks like on average, on the high note, if you are to do 5 million streams as a Nigerian artist, you will get 25 K dollars $25,000. But on the low estimate, if you are to do 5 million streams as a Nigerian artist, you will get $15,000. And I now do what I do. I got my calculator, I said let me check it. 25K is 40.2 million naira, then the 15K is 24 billion naira. I just rounded the figure up.

So that means as a Nigerian artist, if you're able to achieve 5 million streams, you should be getting anything between 24M and 40M. And somebody is saying that it is better to sell 10 copies. By yourself and only 100% rather than the things on Spotify and Spotify is giving you coins, but at least the coins when you add everything to go together, all those cobo cobo, you will add up to anything between 24,000,000 and 40 million.

Maybe I don't agree with that logic. Maybe some of you see me, I'm too money focused. But then again, remember I told you guys it's not about the money. The thing is, if 5 million people have held you on Spotify, man, people are beginning to know your name. You can now leverage that, leverage that brand into other money, money making opportunities. If you sell only 10 copies on your own website, who knows you, your mom, your dad, your brothers and your sisters, maybe your ex-girlfriend, like who knows you?

But then 5 million streams on Spotify, even if the money did not reach 24 M, even if the money was only 10 MI, still prefer that deal. At least I have 10 M in hand and I have 5 million Nigerians who have heard my music who did not know me before. And then I was even thinking, what would it take for you to get 5 million streams from your website? And I was thinking, you need to have some kind of viral marketing campaigns going on.

You need to have extensive social media presence. You'd have to do all kinds of collaborations and cross promotions. You'd need to have massive public relations and media coverage. And when you're starting out as a newbie, let's be honest, is that something that a new artist can do by themselves? It's not easier than if you try and play the Spotify game. At least if I'm picking up streams, if you 100,000 or something, I can use that to approach somebody.

I don't know, maybe Don Jazzy you say Baba, I need your help. I'm a musician, I'm roughing it. I'm not too bad. Baba seen my Spotify. I've been able to get 2000 streams. I mean, who knows the kind of conversations that I can open, who knows? But then all these people that talk about owning your website and starting a Nigerian version of iTunes or Spotify or something, all, well, I'm good. But The thing is, let's remember the market is the market.

If we want to break people's entrench streaming habits, it will be hard. Like I said, unfortunately, Nigerians are listening to Spotify. The young people are listening to Spotify. That is where they're getting their podcasts. That is where they're getting their music. That's where they're getting their every every. If we say we'll set up something and we'll get those people to leave Spotify and come to us, man is it is a Herculean task.

I'm not saying it can't be done, but it's hard. So in my own opinion, please for creatives, let's not oversimplify the issues. It will be nice if you own your things for 100%. It is possible. It is doable. There are people that have done it. Dolly Parton, I know that the reason why she's living a sweet life is because she owns all her stuff 100%. Taylor Swift owns everything 100%, and they've been able to make good on all that.

But The thing is, somebody else can own your IP and your life can also be, I'll put it, not as bad. But the most important thing, especially in the beginning when you're trying to blow the most important thing is distribution, not necessarily your talent OR your ownership. And I keep using the video because it's a debate that people keep, you know, that rate is still today the video. He Can't Sing. He cannot sing. His voice is smooth.

No, his voice is raspy. He sounds like he smokes. He will. He sounds like he drinks too much gin. You know, I don't know. I don't have a points either up here or there. So it's not about your talent. It'll be nice as an artist to be the most talented kid on the block. And if you can, yes, you should be the virtuoso. You should. But don't deceive yourself. If you are the best musician that ever leaveth but no distribution, nobody knows your name, you are 0.

And in my own opinion, for those of us who are trying to start out, who are trying to blue, who are trying to break out what we're looking for now, distraction, any kind of traction, the people know us. The people hear us. Do they know who we are? Do they know what we do? Did they like our flow? Do they feel our vibe? That's what we should be aiming for in the beginning. So no need to complicate this episode anymore. That's all for today.

If you've got any sales and marketing questions, then bring them to me. Call SMS or WhatsApp me on 08064662140. Thank you very much for your time and attention. I'll catch you, dear listeners, at the next episode and I hope I've been able to convince one or two creative listening to listening now. Please distribution first, distribution first, distribution first. Go and get streams on Spotify or iTunes or whoever. Instead of focusing on getting only 10 sales on your own website.

Please, please, please, please and please. All right, so that's it. I'll catch you guys at the next episode.