The Biggest Spotify Artists Of 2014

#1 on Spotify

Spotify just released it's 2014 most-streamed figures and a lot of familiar faces show up once again. That said, one surprise is the rise in popularity of Ed Sheeran, who comes out on top as the most streamed artist in general, the most streamed male artist, and had the most streamed album. Here's the top 5 for a number of Spotify categories.

Top 5 Most Streamed Artists
1. Ed Sheeran
2. Eminem
3. Coldplay
4. Calvin Harris
5. Katy Perry

Top 5 Most Streamed Males
1. Ed Sheeran
2. Eminem
3. Calvin Harris
4. Avicii
5. David Guetta

Top 5 Most Streamed Females
1. Katy Perry
2. Ariana Grande
3. Lana Del Rey
4. Beyonce
5. Lorde

Top 5 Most Streamed Groups
1. Coldplay
2. Imagine Dragons
3. Maroon 5
4. OneRepublic
5. One Direction

Top 5 Most Streamed Tracks
1. "Happy" - Pharrell Williams
2. "Rather Be" - Clean Bandit
3. "Summer" - Calvin Harris
4. "Dark Horse" -  Katy Perry
5. "All Of Me" - John Legend

Top 5 Most Streamed Albums
1. X - Ed Sheeran
2. In The Lonely Hour - Sam Smith
3. The New Classic - Iggy Azalea
4. GIRL - Pharrell Williams
5. My Everything - Ariana Grande

Spotify is an on-demand service so anyone getting into the Top 5 of any category has a measure of popularity that can't be denied. That Ed Sheeran's brand of acoustic music could be so popular shows that just about any type of artist or genre of music can make it in Music 4.0.

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Warner's Pays Up

One of the primary operating principles of major labels has always been to get away with as much as possible when it comes to underpaying artist royalties. The idea is something like, "Let's not pay this, and if he ever finds out, he'll have to sue us first. Then maybe we can settle for less that we owe." That's the way it's always worked, and that's why record labels in general have received the reputations they now live with.

Another example of this came to light recently when singer Michael McDonald settled with Warner Bros for deliberately underpaying him on itunes downloads for his Doobie Brothers big hits. He's not the only one though. Artists like Kenny Rogers, Peter Frampton, The Cars and Queen's producer Roy Thomas Baker have all received recent settlements as well.

This particular line of suits came about as a result of the Eminem suit a few years ago, where his production company successfully argued that a download constituted a license and not a sale. As a result, the royalty should be 50% of the sale instead of the normal 12 to 20%.

Even though this might seem like a win, it's never really a total victory with record labels, since you never know for sure what the exact sales of your records are. Sure they send you a statement, but chances are the numbers favor the label and not the artist.

Even in todays online world of vastly improved measurement, it doesn't necessarily mean you're seeing the real numbers. No wonder so many artists would rather go the DIY route.

But let's face it, record labels aren't in the business to make money for their artists. The major labels only care about their shareholders, and well they should, since that's their real business. The real fact of the matter is that they care more about the artist's audience than the artist themselves. Every artist should understand this going into a record deal, and expect that they may have to do what Michael McDonald and all the others did if they have some success. It's just the way the business is.

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Should Artist Royalties Be Private?

There are so many things in life that are meant to be private yet turn up before the public. Executive salaries, artist contract riders, tax returns, rehab, criminal and medical histories are just some of what comes before our eager eyes on a daily basis. There's a school of thought that says that a celebrity's total life should be totally open to whatever scrutiny the public desires, since that's what the artist signed up for in the first place. Others believe that some things are sacred in their privacy, regardless of how popular you are.

One of these privacy battles is now being played out in the class action lawsuit against Universal Music Group over digital income. After the successful appeal by Eminem's production team against UMG in 2010 where the court agreed that a digital download was subject to a license fee rather than a royalty, other artists like Rob Zombie and the estate of Rick James were quick to sue UMG in order to gain the same advantage. After all, earning 50% of the license income from a download is far better than the 15 to 20% a royalty would generate.

The real problem comes from the fact that the attorneys in the matter want UMG to turn over the sales and royalty data from other artists not involved in the suit so they can have enough information to calculate the damages. UMG has balked, more from the standpoint of self-preservation rather than a defense of their artist's privacy rights. It's now up to a judge to decide.

The problem is that each artist has a slightly different contract, and of course, their sales are different, which makes you wonder just how useful the data would actually be even if turned over.

While various approximations of artist sales have always been around, the exact numbers have always been somewhat of a mystery, sometimes even to the artists themselves. While definitively determining that number might not be such a bad thing, having the terms of one's contract available to someone else's prying eyes can only open up a can of worms for all concerned. Sometimes things are better off left private.

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Sony Caves To Artists In Class Action Suit

If you've read this blog much, you know that I've been keeping you up to date on the Eminem v. Universal lawsuit all the way along. The suit, which was eventually won by Eminem's production company FBT, was significant because it changed the way the music industry values a digital download.

The record labels considered a download sale to be just like a CD sale and therefore subject to the same royalty rate, which could be anywhere from 12 to 20 percent. FBT contended that a download was in fact, NOT a sale, and really was a license, which was subject to a much higher royalty rate of 50%. When HBC/Eminem won, it was predicted that there'd be a flood of classic artists suing their record labels. Sure enough, that's what happened, with a number of acts including The Allman Brothers, Cheap Trick and The Youngbloods filing a class-action suit right away.

Now it's been reported that Sony Music has filed a motion to settle with these acts, paying around $8 million and raising the royalty rate 3% in most cases, and 4.7% in the case of The Youngbloods. If this is approved, artists who have had at least 28,500 downloads on iTunes will be eligible. Ironically, many acts are choosing not to settle or be part of this action, preferring to file their own suit to get an even better deal.

This might seem like a win for the artists, but consider this. 8 million bucks is a drop in the bucket to a major label, and raising the royalty rate isn't that great either. The digital download cat has been out of the bag for sometime, which means that there won't be that many download sales forthcoming, and the next music distribution frontier is subscription, which pays even worse.

Yes, this seems like a victory, but at the end of the day the artists only received what will amount to a little bump. This isn't the only suit that's ongoing however, and it will be interesting to see if any of the others have endings along these same lines.

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Chuck D Wants His Royalties

We all knew that this was going to happen, that sooner or later the floodgates would open. Now Public Enemy frontman Chuck D has filed a class-action lawsuit against Universal Music Group in U.S. District Court in Northern California on Tuesday, alleging that the music giant has short-changed its artists and producers in licensing deals for digital downloads and ringtones. The suit alleges that Universal owes its artists "hundreds of millions of dollars in royalties" because of the discrepancies.

This was all thanks to the fact that Eminem's production company, FBT, won a decision against UMG over what amounts to the definition of ownership of a digital file. FBT claimed that UMG owed them a lot more money for each download sold because a digital file sold by iTunes or Amazon MP3 is actually a license. UMG insisted that regardless of whether it's a CD, vinyl record, or digital file, Eminem's music is part of their distribution deal. Eventually UMG lost the decision, and now we're going to see more and more artists suing to take advantage of decision.

The difference between a license and royalty is pretty great. An artist can expect only between 10 and 20% (if they're lucky) of the revenue from a digital sale under a normal royalty agreement, but 50% under a license agreement.

According to Chuck D's claim, UMG's current method of accounting pay artists and producers $80.33 for every 1,000 downloads, when the correct amount should be $315.85 per 1,000. For ringtones it's even more drastic. UMG's current accounting method yields $49.89 per thousand downloads, as opposed to the $660 per 1,000 that the suit claims is actually owed.

You can expect that UMG is going to go down fighting, but this might be already lost. I bet that their strategy is to try to outlast them in court, but if Chuck D wins, UMG might be in big trouble. It could be the beginning of the end for the biggest record label still left standing.

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The Serious Ramifications Of The Eminem Lawsuit

As stated in the last couple posts about this subject, the Eminem win in court over Universal Music Group (UMG) would have some serious ramifications on the major labels at some point. It looks that point is now.

To catch you up, Eminem's production company sued UMG over how the royalties were computed for digital music. They suit hinged on whether a download is a treated like a record royalty or license agreement. The difference is that in a record deal, the record label manufacturers the product (CDs) and pays the artist a royalty of anywhere between 12 and 20% of the wholesale price. In a licensing deal, the record label provides the licensee (such as a distributor in another country producing CDs) with a master, and they in turn manufacture the product. The record label and the artist split the proceeds from the license deal 50/50.

Since in the case of digital downloads, a label doesn't actually manufacture anything and provides the user with a master, it sure looks like a license and the court agreed.

UMG originally won the case but lost the appeal, meaning that the court agreed that a download is really a license rather than a sale, awarding FBT (Eminem's production company) the right to collect a lot more money, reportedly as much as $30 million. The irony is that Eminem declined to be part of the lawsuit so as not to make waves with UMG, so he might not see an extra dime.

As predicted, more classic artists are coming forward to sue UMG. First came the estate of Rick James, then last week Rob Zombie, White Zombie, Whitesnake and Dave Mason filed a class-action suit against UMG in the United States District Court in San Francisco.

Supposedly a number of attorneys for other UMG classic acts are preparing lawsuits as well. As predicted, this will change the music industry in that the major labels don't have enough money as it is, and they'll all be in serious trouble if big payouts are necessary. That said, some artists are afraid to engage in a battle with a major label, especially if they depend upon royalties from their catalog. There's enough accounting shenanigans that goes on with labels already, and many artists are wary about giving them an excuse for more.

A suit by artists signed after about 2003 won't happen however, since the labels put language in the all contracts from that time on that clearly specifies that a digital download is a sale.

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The Court Decision That May Change The Music Business

There's just been a decision by the United States Supreme Court that may have major financial implications on the major record labels that could very well push some of them over the edge into insolvency. I've been reporting on the legal battle between Universal Music Group (UMG) and Eminem's FBT Productions for a couple of years, and it now looks like the case has finally been decided in Eminem's favor. Here's the gist of the decision and why it's important.

FBT brought the suit against UMG stating that a download sale shouldn't be treated like it is in a normal record agreement, but as part of a license deal. The difference is that in a record deal, the record label manufacturers the product (CDs) and pays the artist a royalty of anywhere between 12 and 20% of the wholesale price. In a licensing deal, the record label provides the licensee (such as a distributor in another country producing CDs) with a master, and they in turn manufacture the product. The record label and the artist split the proceeds from the license deal 50/50.

FBT contended that since UMG was only providing a master to an online distributor like iTunes or Amazon, and the distributor was manufacturing the product (in this case making a copy of a digital music file), all online sales are in fact license deals and should be paid as such - at a 50% rate instead of 12% in FBT's case.

You can see the financial implications here. If FBT won, not only would UMG owe them a ton of money, but every other artist at every other label would then sue for more money using the case as a precedent. The entire major label economy would be rocked!

UMG won the first round of the case, but FBT appealed and had the ruling overturned. Then UMG essentially appealed the appeal and took the case to the US Supreme Court for a ruling. The Supreme's refused to hear the case though, and sent it back to the 9th Circuit Court of Appeals to determine the damages.

There's some speculation that this is at least a $50 million decision for Eminem and FBT, and every other major artist will now go back to their record labels with their palms open wide. Lady Gaga and newer artist's will not have this ability however, as labels have since tightened up their contract language regarding downloads, but anyone with an older agreement can probably expect some dough.

The reactions from the industry over the next week or so should be very interesting.

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What The Beatles Unique iTunes Deal Means For Other Artists

It's recently been revealed that The Beatles/EMI deal with iTunes has a very unique feature. iTunes pays all royalties directly to both The Beatles Apple Corps and their publishing company Sony/ATV Music Publishing, bypassing EMI.

This type of payment arrangement is normally never done. The record label normally gets the payment from iTunes, then distributes the money to the artist and the publisher. By being paid directly, The Beatles made sure of a couple of things.

1) There'd be no hanky panky with the books by EMI.

2) They don't have to wait until the end of EMI's payment cycle to get paid.

But wait. There is one case where an artist is paid directly by a distributor (which is what iTunes is) and that's in a licensing deal. What's the difference? In a record deal, the record label manufactures the product. In a licensing deal, another entity is given the right to take on the burden of manufacturing from a duplicated master, but the royalty rate to the artist is then increased to as much as 50% (up from 12 to 25% on a record deal, depending upon the contract). But if EMI isn't manufacturing any product (because it's digital) and iTunes is the distributor of duplicated master, isn't that a license?

There's been a number of artists that have been arguing this is the case for the last couple of years. As I reported here, Eminem's production company F.B.T. lost its first court battle with UMG then won the appeal, but UMG has asked the court to review the decision, so the result isn't as cut and dried as it initially seemed. Cheap Trick and the Allman Brothers have also taken their labels to court for just the same issue. Cheap Trick eventually settled the case with Sony Music, but the Allman Brothers case is still continuing.

While EMI vehemently denies that the deal with iTunes is not a licensing deal, if it looks and sounds like a duck, it probably is a duck, and that sets a precedent. While you have to have some hits to play in this league, the fact that EMI agreed to such a deal (probably because they just wanted to get some revenue through the door) may ultimately cause the courts to rule against other labels the next time this situation comes up.

That doesn't mean that all artists will ultimately benefit from The Beatles/EMI/iTunes deal, but it does bring it into the realm of possibility. And once the ball starts rolling downhill, it only picks up speed.

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Eminem's Pivotal Royalty Battle

In March of 2009, I wrote a post on my Big Picture blog about a court battle between Eminem's FBT production company and Universal Music Group (UMG) that had huge implications for the music business.

FBT sued UMG over what amounts to the definition of ownership of a digital file. FBT claimed that UMG owed them a lot more money for each download sold because a digital file sold by iTunes or Amazon MP3 is actually a license. UMG insisted that regardless of whether it's a CD, vinyl record, or digital file, Eminem's music is part of their distribution deal.

So is it licensing or is it distribution? That's what the court had to decide.

There was a lot of money at stake here. If the court decided that selling a digital file is a licensing deal, then the record label and the artist would split the proceeds 50/50 and the artist would be entitled to about 35 cents per download. But if they decided it's distribution, then the original recording agreement would still be in force and the artist would make about 15% (more or less), or about 10 to 20 cents on every download instead.

FTB claimed that, since there's no manufacturing or packaging costs (which are covered by the record label), and only a single copy is delivered to the digital download companies, then it should be a license, since that's what occurred in licensing deals of physical product for years. UMG argued that a sale is a sale regardless of how it happens.

In the original ruling, the court sided with UMG and the whole music industry let out a huge side of relief. If the ruling had gone Eminem's way, every record label would owe their artists a huge amount of money, effectively bankrupting the music industry.

Last week, an appeals court ruled against UMG and ordered them to pay FBT a full 50% split of all royalties, instead of the 12% that they were getting before.

This ruling will be worth millions of dollars for FBT, but it could mean that the music industry will be on the hook for hundreds of millions, even a billion dollars depending on who you talk to, in back and future royalties.

If you thought that the music industry was really changing, you haven't seen anything yet. This may be the tidal wave that finally sweeps the music industry as we know it away for good.

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Top 10 Music Moneymakers Of The Decade

One of the more eye-opening stats about the recent and current music business is who made the most money during the 00's. Here's a list that combines concert ticket and CD sales. Yes, it will surprise you.

1. Celine Dion - $748 mill

2. Kenny Chesney - $742 mill

3, Dave Mathews Band - $738 mill

4. The Beatles - $627 mill (including Paul McCartney's and Ringo's ticket sales)

5. U2 - $610 mill

6. Toby Keith - $592 mill

7. Bruce Springsteen - $588 mill

8. The Rolling Stones - $570 mill

9. Tim McGraw - $551 mill

10. Britney Spears - $495 mill

What this list tells us is that our assumptions regarding the type of music that is hot may be all wrong. Even though Rap and Hip Hop seemed to dominate the charts during the decade, no artists from that genre cracked the top 10. Only Eminem came in at #14 with $419 mill and he was the only hip hop artist in the top 20.

Who would've guessed that Celine Dion would've been number 1? Or that Kenny Chesney would be number 2? Or Dave Mathews and The Beatles numbers 3 and 4?

The list illustrates just how little radio reflects the buying tastes of the general public, but it also shows that mainstream music artists with major label connections still partake of the biggest piece of the financial pie. That being said, the list is also a reflection more on the era of Music 2.5 than Music 3.0. Let's see what the next 10 years bring.

Top Selling Albums Of The 2000's

Here we are at the end of the decade and it's a good time to take a look at just who sold what during the transition from Music 2.5 to Music 3.0.

Believe it or not, The Beatles had the top-selling album of the 2000's with their greatest hits package "1." The album had sales of over 11,448,000 copies since its release in November 2000, according to Nielsen SoundScan’s decade-end sales numbers. The Fab Four sold a combined 30 million units during the decade.

But rapper Eminem was the 2000s’ top-selling artist with 32.2 million combined in sales, with two albums in the decade’s Top 10 - The Marshall Mathers LP selling 10,195,000 and Eminem Show right behind it at 9,789,000.

It used to be that a real bona fide hit was pretty much guaranteed to sell diamond (10 million sales), but only ‘NSync’s No Strings Attached (11,111,000) and Norah Jones’ Come Away With Me (10,523,000) managed to hit those numbers along with The Beatles and Eminem.

But what really showed the decline in CD sales was that only two albums released in the years between 2005 and 2009 managed to get in the Top 20 of the 2000s’ bestsellers - Nickelback’s All the Right Reasons and Carrie Underwood’s Some Hearts at 14 and 17 with sales under seven million.

Flo Rida’s Low was the 2000s biggest-selling digital single, while Coldplay’s Viva La Vida was the best-selling digital album.

Wonder what the numbers will look like at the end of the next decade?

Bestselling Albums of the Decade
1. The Beatles - 1 - 11,499,000
2. *NSYNC - No Strings Attached - 11,112,000
3. Norah Jones - Come Away With Me - 10,546,000
4. Eminem - The Marshall Mathers LP - 10,204,000
5. Eminem - The Eminem Show - 9,799,000
6. Usher - Confessions - 9,712,000
7. Linkin Park - Hybrid Theory - 9,663,000
8. Creed - Human Clay - 9,491,000
9. Britney Spears - Oops! ... I Did It Again - 9,185,000
10. Nelly - Country Grammar - 8,461,000

Bestselling Digital Singles of the Decade
1. Flo Rida feat. T-Pain - "Low" - 5,214,000
2. Lady Gaga feat. Colby O'Donis - "Just Dance" - 4,690,000
3. Jason Mraz - "I'm Yours" - 4,619,000
4. Timbaland feat. OneRepublic - "Apologize" - 4,439,000
5. The Black Eyed Peas - "Boom Boom Pow" - 4,349,000
6. Soulja Boy Tell'em - "Crank That" - 4,315,000
7. Lady Gaga - "Poker Face" - 4,200,000
8. Coldplay - "Viva la Vida" - 4,140,000
9. Taylor Swift - "Love Story" - 4,005,000
10. Katy Perry - "Hot N Cold" - 3,945,000