Spotify’s current pay rate per stream is around $0.006 per complete play. The average cost of a CD is $12 with around 10 songs per CD (or $1.20 per song). So one CD purchase is worth 200 album streams (this is not counting any kind of royalty and/or cost of creation).
Let’s do some math….
To get the equivalent of one complete 10-song CD sale, a consumer would have to listen a complete 10-song album 200 times, totaling roughly 2,000 streams (for RIAA certification purposes, if any tracks from a single album are streamed for a total of 1,500 streams, in any combination, that counts as one album sold).
If we use the RIAA model of 1,500 streams, with an average of 3 minutes per song, a single person would have to stream 75 hours of music to qualify as one unit sold.
Now, if someone listens to music daily using a streaming service like Spotify while they work, then a person could, in theory, equal a single album’s sale in less than two weeks – IF they are listening to the same 10 or so tracks over and over during that span. Odds are, however, that they are listening to a custom-built playlist full of different artists and albums.
If that same person were to go to the store and drop $12 on a CD, the artist/label just earned their unit sold, and the consumer can listen to it as often (or as little) as they want. It’s no wonder that so many artists are hesitant to move to streaming.
Here’s the gamble – if a person buys a CD, and over the course of the next year, listens to that CD more than 200 times, then the consumer comes out ahead. The artist/label isn’t going to make any more money on that unit. If that same person listens to that same album on a streaming service more than 200 times, well guess what – the artist/label is going to continue making money on it. If a person listens to a single album on Spotify every day for the next year, then the artist/label just made an extra 50% (give or take) than they would have with a CD sale.
For mainstream secular artists, getting that many streams is a piece of cake. Between streaming services and YouTube, an artist like Taylor Swift or Beyonce could rack up that many streams in a week or less. Heck, with the accessibility of YouTube, especially to children, they could hit those numbers in less than a day.
In fact, one could make the argument that streaming is more lucrative for pop artists because it’s far more accessible to their target audience. Prior to streaming, if kids and teens wanted the latest release from their favorite artists, they had to save up money and wait for a ride to a music store (if they were lucky, their parents would take them on release day, but that typically wasn’t the case). With streaming services, kids and teens can hear new music within minutes of its release without leaving the house (and without saving up money). And if my kids are any indication, they will play the same songs over and over and over and over and over and over and over and over……
MAKE IT STOP!!!!!!!!!
Sorry, I’m OK now.
But this site is focused primarily on southern gospel music, an industry that, to put it kindly, doesn’t quite hit the same numbers as mainstream pop music. One can understand why many SG artists are resistant to (or outright dismiss) streaming as a source of reliable revenue. CD’s, as stated above, offer a much quicker return on investment.
But are CD sales in this day and age a short-term gain, long-term loss?
Let’s look at the number again. If someone purchases a CD at a SG concert directly from an artist, that artist just made their money on the CD right then and there (so they’re happy), and the consumer can listen to it as many times as they want (and knowing SG audiences, it’ll be MANY times). If that same audience member were to play that same album as many times on a streaming service, however, the potential for additional income increases with every stream, something that CD’s do not offer.
In addition, SG CD’s are becoming harder and harder to come by in general retail outlets. With the closing of Family Christian Store (at the time, the largest Christian retail chain), most remaining stores that would carry southern gospel music are mom-and-pop operations or specialty stores. Big box retailers have all but eliminated their music departments (Walmart is down to 2 four-foot sections of CD’s, while Target has only an endcap’s worth, and Best Buy has stopped selling CD’s altogether). That’s also assuming that a particular album is being distributed to retail – many SG artists release their music independently, which means the ONLY way to get it is to order it directly from them (or pick it up at a concert).
Now, as I write this, it is Friday, and the latest NQC compilation CD just released today. I have already listened to a few tracks on Spotify, and have added the CD to my gospel music playlist without having to go anywhere. Checking the local Lifeway store, it does not appear that they have this CD in stock, so it would have to be a special order at best. I’m honestly not so interested in the album that I am going to place an order for it (in a store or through online sources), but I WILL add it to a streaming playlist for casual listening, which is how I listen to a lot of my music now.
There’s no other way to say it – Crossroads Entertainment (the record label that released the album) is gaining business from my streaming that they otherwise would not have gotten from me, as are a multitude of artists whose music I might not otherwise purchase. I’m fairly sure some of their music I’ve streamed upwards of a hundred or so times just from casual listening, and regardless of how many times I’ve streamed a particular song or album, that’s still money coming in. Even if an album was released 5-6 years ago, if it’s still being streamed, it’s still earning money.
(I know this from experience, as I still get streaming income from my 2014 EP on a weekly basis, even if it’s miniscule.)
So, it appears that CD’s actually ARE a short-term gain, long-term loss, for a number of reasons. The artist may make their money “up front,” so to speak, with CD sales, but they’re losing out on continuous income over an extended period.
As for artists who believe that streaming might eat into their CD sales, the answer is…well, yes and no. As admitted above, I will chose streaming over CD’s in most occasions, but at the same time, if a CD is not available for streaming, there is a good chance that I probably won’t buy it anyway, especially if it’s just for casual listening, so in either case, you’ve lost a CD sale from me, but if your music isn’t available for streaming, you also lost streaming income from me on top of that.
This is such a large topic that it’s going to take more than one article to cover everything. Next week, we’ll look at another reason why streaming is such a cause for fear in SG artists. I’ll give you a hint – it has to do with quality.
In the mean time, I’ll end this post with a discussion for the comments – how do you primarily listen to new southern gospel music? Do you still seek out CD’s from your favorite artists, or do you take advantage of streaming services (when available)? If you still purchase CD’s, do you order them direct from the artist, or do you try to track them down in local stores?