Less iTunes income for Swiss customers due to exchange rate.

Swiss customers might notice they receive the same amount in EUR from iTunes for a Swiss sale even though the high CHF means that Swiss public pays more (in EUR) than before. This has affected every Swiss label/distributor/artist selling on iTunes and no one is happy about it…. except Apple who pocket the difference. The problem is, iTunes pays all European labels and distributors a fixed “Published Price to Dealers” (PPD) in EUR and this is fixed in the iTunes contract. If the exchange rate went the other way (CHF weakened against the EUR), the Swiss would be making additional revenue. Unfortunately, exchange rate variation is a normal part of international business and though we’re not happy, we are lobbying to have Apple pay us in CHF as well. More to come. This is a difficult one because we love Spotify and would go as far as to say that with Spotify (Simfy, Rdio, MOG, MyJuke etc) for the first time, we have a music service that just makes sense. It’s just these pitiful payments which leave a bitter taste in our mouths. Spotify pays us 0.007 EUR per stream so you make about 0.0059 EUR though depending on whether the listener has the free, unlimited or premium versions, it can be more.But it still means your next beer just cost you 840 streams…. But while the entire music industry is lobbying for fairer payments from Spotify, do we think that (given the chance) Spotify will start returning more income? Yes! In fact, we believe that Spotify is the only way forwards. Let’s start by saying that the average European buys about 1 CD or spends about 15 EUR on CDs per year. By comparison, the unlimited Spotify users (5 EUR per month) spends about 60 EUR per year, and the premium user (10 EUR per month) spends 120 EUR per year. Can you see where this is heading? A good music video starts with a strong song but check out what Charlie Winston has done.The USA is the single biggest music market in the world (though the Asian mobile market is a completely different story), and typically leads most European countries by 1 – 2 years. The honest truth is, though iMusician is a “DIY distribution tool” and a necessary part of the new music eco-system, to succeed in music you still need to understand the business and the way it works.