Daniel Ek's defence of spotify

$2 Billion and Counting | Spotify Blog

Myth number two: Spotify pays, but it pays so little per play nobody could ever earn a living from it. First of all, let’s be clear about what a single stream – or listen – is: it’s one person playing one song one time. So people throw around a lot of stream counts that seem big and then tell you they’re associated with payouts that sound small. But let’s look at what those counts really represent. If a song has been listened to 500 thousand times on Spotify, that’s the same as it having been played one time on a U.S. radio station with a moderate sized audience of 500 thousand people. Which would pay the recording artist precisely … nothing at all. But the equivalent of that one play and its 500 thousand listens on Spotify would pay out between three and four thousand dollars. The Spotify equivalent of ten plays on that radio station – once a day for a week and a half – would be worth thirty to forty thousand dollars.

Not quite comparing apples with apples here. The right comparison would be 500,000 people playing the single, back in the day and that's where the economics have changed.

Daniel Ek is right to bang the drum around the model has changed forever but weakens his case by trying to pretend that the new economics per play are better than the old ones. They're not.