SPOTIFY WILL MAKE EVERYONE RICH (AS LONG AS YOU’RE TAYLOR SWIFT)

[defrog]

ITEM: Spotify CEO Daniel Ek says that it’s not true that his company doesn’t pay musicians enough – the problem is that they’re not recording enough music.

 

Ek made the comments in an interview with Music Ally:

 

“There is a narrative fallacy here, combined with the fact that, obviously, some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough.”

 

My kneejerk reaction is that Daniel Ek either (1) doesn't seem to really understand musicians, or (2) doesn’t care because he thinks streaming is changing how the music business works to the benefit of everyone, whether musicians like it or not.

 

He might be right about Point 2, though not necessarily in the way he thinks. Ek tends to position streaming as Napster 2.0 – which is true as far as streaming being a disruptive music industry game-changer. However, when you look at this Baffler article explaining the problems with Spotify’s business model, it seems to me that Spotify is a new version of the mid-20^th-Century music business model where bands and artists had to put out new songs and/or albums at least every six months to remind everyone they were still around.

 

Back then, the object for music labels was to cash in on what was usually a limited window of popularity and success before the kids moved on to the Next Big Thing, while the object for bands was to be the Next Big Thing and remain so for as long as possible. Now, with the streaming model, you need more frequent releases and hit songs (or what they call “viral” these days) just so you can stand a chance of making enough money.

 

There’s one other parallel: both versions can only realistically support a small number of artists financially relative to the number of artists out there.

 

To be fair, there are way more bands and artists out there today than there were in the mid-1960s, so we’re talking about much larger economies of scale. One interesting detail of Spotify’s Q2 results was that its top-tier of artists (those accounting for the top 10% of its streams) now number more than 43,000. That’s a pretty impressive number when you consider we used to measure this kind of thing with radio and sales charts that usually were never longer than 200 entries (i.e. the Billboard 200) – and sometimes the same artist might take up several slots.

 

But I don’t know how much that translates into a living wage for those artists in the bottom 80% of that top 10%. The chief criticism of Spotify (and Apple Music, for that matter) is that its algorithms and payment model are “pro rata”, meaning the amount you get paid per stream depends on how popular your song is in relation to the entire Spotify library.

 

This is much different from digital downloads, which are a fixed price. If you only sell ten digital albums for $10 a shot on iTunes, you still make $70 (assuming a 70/30 split). If those same ten people listen to your album once on Spotify, assuming ten songs, you make $1.00.

 

Put simply, streaming mainly benefits artists who either have a large existing fanbase + back catalog, or have the ability to write hit songs that go viral once every couple of months.

 

Most indie artists don’t fit that category for a variety of reasons. They don’t write “hit” commercial music, or they do but they need more time to work on it and get it right. Many have to tour constantly to make enough money to keep the band going, which in turn means they don’t have time to stop in a recording studio, crank out a few songs and get back on the road.

 

So I have a problem with Ek insisting that he’s doing musicians a favour by giving everyone a way to make a living off their art and saying it’s better than CDs or downloads, then telling the ones that aren’t making it, “Well, you just need to put out more hit records,” as if it’s just that simple. (He also seems to assume that making a record doesn't cost all that much – like everyone just uses GarageBand and a laptop.)

 

It’s especially grating when you ask him to name some examples of musicians that are doing well with Spotify, and he always names someone like Taylor Swift (as opposed to, say, Marc Ribot).

 

(Which is ironic given that Swift initially was against streaming services (especially Spotify) before she embraced them. But hey.)

 

FULL DISCLOSURE: I use the free version of Spotify quite a bit – partly because playlists are fun to make, and it’s a useful preview function, but mainly because I’ve had a music budget of roughly $0.00 for a few years now, and I figure it’s better for bands that I like to get a pittance from me via Spotify than nothing at all. But I’d much rather support bands by buying their music, and if I had the money to do that, I would. So I'm not against streaming as a way to consume music – but I think it's not nearly as fair or egalitarian as Ek makes it out to be.

 

Shut up and play the hits,

 

This is dF