After a rapid rise to prominence, Spotify seems to have been going through an equally dramatic fall from grace, over the past couple of years. While their membership and the size of their library has continued to grow, there has been an increasing amount of criticism of the company, largely around how much money they pay to artists, for the streaming of their music by users. At the end of 2011, STHoldings gained attendtion in the news, when it pulled music from over 200 independent labels off Spotify, proclaiming ‘Let’s keep the music special, fuck Spotify’. Since then the issue has continued to boil, with increasing numbers of artists criticising the company about its payments. Earlier this year (July 2013), Thom Yorke and Nigel Godrich made a high profile entry into the debate, after deciding to pull music from the service. Then, at the start of this month (Sept 2013), Spotify’s PR problems seemed to get worse, when the Ministry of Sound announced they were suing Spotify for copyright infringement - although this is a separate issue that I will come back to.
Whenever Thom Yorke has entered into a debate in the past, I have tended to agree with his side of the argument, sometimes being pleasantly surprised to see him and other musicians lending their name to a cause (and that is not just because I am a fan of his music). High profile artists trying use their influence in a positive way, is something that should be encouraged. That is, as long as it is being done for genuine reasons, rather than used as a tool for vacuous celebrities to boost their status, as is often the case - but that is a debate for another day.
I was therefore initially disappointed, when Mr Yorke entered into the argument about Spotify, to announce that he would be pulling both his solo album The Eraser, and the music from his band Atoms For Peace, off Spotify. Now, I’ll admit selfish emotions did come into play here, as AMOK, the album by Atoms For Peace, was something I was listening to on Spotify at the time. For fuck’s sake! Cheers Thom, that’s really pissed on my tube journey for the next few weeks.. Well, you get the idea. Although there is a bigger point to me made here, as I was reacting as a fan. And if you are an artist, your fans are your most important asset.
Predictably, lots of people then took to Twitter complaining about a rich mans protest. Does someone like thom Yorke really have a right to complain about payouts from Spotify being to small? I mean it’s not like he needs the money! Well, no he probably doesn’t need the money, but yes he does have a right to complain about it. As I said, it can be helpful when high profile individuals lend their support to arguments. In this case, smaller artists who’s opinions might otherwise be ignored, will be grateful for someone like Thom Yorke speaking out on their behalf.
So where is it all going wrong? Spotify do have a lot to answer for, but it is not all their fault either.
The first (more obvious) issue is that many smaller artists don’t get many plays anyway, so when these are added up and then calculated with their (approximately) 0.5p payment per play, they react with dismay at the pittance their recieve. With that said, even for more respactable amounts of plays, the payments can still seem small. However, streaming music is better compared to being played on the radio, than (legally) downloading or purchasing music, where the listener then owns the content and can play it as much as they like, with no further payments being required. Streaming is essentially renting music for a short period of time, while you are listening to it. You never own any of the content in your playlists on Spotify, or other services like Gooveshark or Deezer. This is where the radio companison comes in, as getting several thousand plays on Spofity is not equivalent to getting several thousand downloads. It is more like getting one play on a tiny radio station with only a few thousand listeners. Because of that, you cannot realistically expect to be paid that much, unless you are getting a serious amount of repeat streams from a big audience.
The second (more complex) issue is to do with the labels that many artists are signed to. Spotify pays its royalty payments directly to the labels who are putting out their music. It is then the responsibility of the labels to pay this money to their artists, while taking their share in the process. There is a lot of evidence to suggest that many labels are not passing this money on. Sometimes they use it to recoup promotional costs and other overheads, which seems reasonable, but in many cases labels force companies such as Spotify to pay huge costs, to be allowed to use music from their signed artists. This means that the labels keep all the Spofity payments, until these extortionate costs have been paid off, meaning many artists recieve literally nothing from being on streaming services like Spotify. In fact, many major labels use even more dark forms of legal trickery in their contacts, to ensure they keep the majority of the money in these types of deals, but I think you get the point.
These first two points are not really the fault of Spotify.
The third (more murky) problem is to do with major labels owning a significant share of the business. A few online searches suggests that labels own about a fifth of Spotify. Perhaps this is one of those inevitable consequences of modern predatory capitalism, where anything good that gets created is inevitably taken over and ruined by the poisonous effects of big company greed and monopilisation. Clearly a stitch up is taking place, if major labels are earning from their stake in Spotify, thus taking a share of revenue at the top level, while also being paid again at the bottom level, by recieving money on behalf of their artists and then keeping it for themselves. Essentially this is industry double-dipping, as they are siphoning money twice, leaving very little to be paid to anyone else.
Spotify do have a responsibility to be more transparent about what they pay to bigger labels, who are at the root of the problem. If these deals can be made more transparent, then the behaviour of these labels can be exposed. They also need to make it more clear, where labels are also benefiting from having a share in the business. The balance can then be tilted back in favour of independent artists and small labels.
What about the fans? Back to my intial gripe at the start of the article, if artists start pulling their music off streaming services, it is the fans who will be hurt the most. In the digital age, we shouldn’t be trying to wind the clock back to older ways of listening to music. Furthermore, if music becomes less available through legitimate channels, more people will move back to illegal filesharing sites, which will fill the gap of providing a convenient way for fans to get hold of music.
That just leaves the question of whether Thom Yorke and other artists were actually right to pull their music off the service. It is a tricky issue, as the points they are raising are definitely right. Pulling their music off the service has also made the public more aware of the issue. But, there are better ways of achieving this. At the end of the day, fans will suffer more than Spotify or the labels that own a stake of the business, who still have plenty of superstar artists on their rosters.
A better move would be for high profile individuals like Thom Yorke and Nigel Godrich to build up support for their arguments with other artists and small labels, so that they can take a broader course of action; ideally one that doesn’t hurt fans in the long term. For example, rather than individual artists pulling their music off Spotity forever, imagine if a coalition, of both high profile and small artists, pulled their music off for a week. They would certainly get noticed. While fans would have some short terms pain, the would still be able to access the music in the long run. This would send out a stark warning, showing what it would be like if these artists really did leave Spotify forever. Food for though anyway.
There would also need to be support from industry bodies though, as well a possible government legislation, forcing transparency on the deals between Spotify and the major labels. Spotify have their hands partly tied, as there are confidentiality issues, when it comes to releasing this kind of information to the public. In the UK, bodies like the Featured artists Coalition (who protects the rights of musicians), the Association of Independent Music, who represent many of the smaller independent labels, and the Music Managers Forum, who represent the managers responsible for their artists business interests, should all do more support musicians who are losing out. Similar organisations in other countries should also get on board.
Spotify and other streaming services are still great from the perspective of fans, providing a way of being able to readily access vast catalogues of music. They are also important in reducing the amount of piracy. Artists need a fair deal though. While it is great that they have a way of being able to promote their music to a bigger audience, through streaming, they still need enough money to be able to continue writing and recording their music. In short, Spotify and the big labels need to sort their shit out!
Oh yeah - I almost forgot to come back to the Ministry of Sound legal action.
If you haven’t heard about this yet, MoS are angry because Spotify users are able to recreate the track listing of their compilation albums, by picking the individual tracks on Spotify, to then put into their playlists. In essence, this is no different to making a playlist on players such as (depending on your tastes) iTunes, Winamp, Foobar2000, MusicBee or (God Forbid!) Windows Media Player. Unlike the desktop players, online services allow your to share your playlists with other subscribers to the service, while also allowing you to subscribe to other users playlists.
MoS are pissed off because other people are copying the song order of their playists and then (shock horror!) sharing them with other users.
Frankly, their argument that they own the right for the songs to be played in that order is fucking pathetic. Spotify own the right for all the songs to be played by themselves (or in a different order) anyway. The idea that you can copyright a set of songs being played in a certain order is laughable. By extension, this would mean that any playlist you create, even on a desktop player, could become illegal if the tracklisting matches up with a compilation album you don’t own. Hopefully they will lose.
See you next month.
-By Music Junkie UK