Spotify: No money for your music

Spotify has bought a vacuum cleaner for streaming crumbs, and the indies are paying for it. How artists go from fee recipients to service payers.

From the beginning, Spotify has been a very ambivalent matter. On one hand, it’s a technically excellent product with high usability, but on the other hand, unfortunately, it exploits those who provide content without which the product would have been just a well-built but empty pipeline.

And Mexico pays for the wall

The “1000 Streams Solution” introduced by Spotify at the turn of the year now reveals another unsavoury aspect of the matter. Payment will now only be made for 1000 streams or more (per year and track), anything below that goes into budget pots that Spotify wants to dedicate to “artists with potential”. However, it’s unclear who those artists are supposed to be. And the service fees continue to be paid by all artists, even if they only achieve 999 streams per track and year. This lack of fairness on the part of Spotify towards their suppliers outside of co-owners like Sony Music, Universal Music, and Warner Music is surprisingly audacious and represents a form of neoliberal end-time capitalism of the worst kind. It’s as if only 99 people showed up for your own basement gig, and the owner of the basement says, “Sorry, not enough people, the money goes to Taylor Swift. Please transfer me the expenses for the event, thanks, ciao.” An unnamed scene insider describes the situation, “Until now, the small labels got the crumbs that fell from the table of the major labels. Now Spotify has bought a handheld vacuum cleaner for the crumbs and charges the operating costs to the small ones.”

According to a Change.org petition, approximately $40 million is being collected in this way, which is not paid out to the artists generating these revenues with their content.

Already in 2015, Geoff Barrow, the head of the band Portishead, pointed out the exploitative nature of the service, revealing that he had received only $2,500 for 34 million streams. In comparison, even with an unfavourable contract for downloads, he would have received around €340,000 (assuming each download represents at least 10 streams and is compensated with a maximum of 10 cents). However, this is not a nostalgic lament for the good old days of actually only ten years ago. The industry is not in any kind of financial trouble; in fact, looking at the absolute numbers, the disparity between producers and exploiters becomes even more apparent: Global Music Revenue was $31.2 billion in 2022, an absolute peak and more than double the $14.2 billion in 2014. This includes not only music sales but also performance rights and sync rights. Additional enthusiastic reports further highlight the situation for artists: the German streaming market now has double-digit annual growth rates. Within five years, the value has more than doubled, reaching a remarkable 212.7 billion streams in 2023.

Spotify’s mutants vs. real artists

Against the backdrop of these economic realities, the inadequate compensation must be critically examined, and the question of the responsibility of companies like Spotify in the music industry must be addressed. Music is not just an industry; it is also a cultural asset. The “1000 Streams Solution” will, on the one hand, lead artists to sacrifice their artistic integrity to meet the demands of the algorithm and, on the other hand, bring forth a new generation of semi-artists who largely do without integrity. There is already talk of in-house artists from the major labels involved with Spotify, specifically designed for the algorithm. This is not a new concept; the manufacturers of the first mass-produced record players from the 1930s also released their own publications on their labels – with varying quality. However, developing artistically relevant catalogues seems to have been less successful in this setup. From the current situation at Spotify, one can expect the equivalent of the €1 drive-in cheeseburger. And we’re not even talking about AI-generated music.

This type of schematic music and the pressure to conform to commercial norms could lead to an excessive homogenization of the music landscape based solely on commercial criteria in the long run, neglecting or even crushing innovative genres and artists because it becomes increasingly difficult to break even.

With such a mutant program, Spotify could also lose itself in this schema, degenerating into a pure “fast music” platform and losing significant importance due to the lack of artistic value. This does not exclude a certain market position, but it will then be defined purely by how low the entry threshold can be held and prevent any kind of further diversification towards any premium-sector, the eternal hit of sales marketing.

Raiders of the lost art

However, if consumers no longer perceive the offering as real music in the true sense and start searching for  this “real music,” this could be a new turn in this story. The dominant role of Spotify in the market makes the service an important cultural gatekeeper. If a phase of in-house mutant fast-music creations on Spotify begins, it certainly poses a threat to musical diversity for all stakeholders for whom music sales are an integral part of their income.

Perhaps the situation is also the long-overdue wake-up call for music labels and artists. Hope for new laws or regulations is dwindling, and artists find themselves forced to seek alternative sources of revenue. The EU Parliament has already taken notice of the situation, but apart from discussions and press releases, not much tangible has happened or is to be expected.

Spotify is a blessing for users but a curse for producers. But it doesn’t have to stay that way: can Spotify be understood as a new technology like the CD or, before that, the cassette? Unfortunately, Streaming is not just another type of sound carrier but the marketplace itself. However, there can be multiple marketplaces, and even more as soon as the source code becomes open source or at least affordable. As long as all globally produced music is automatically thrown into the abyss of Spotify, it will continue to disappear into insignificance – and perhaps even turn from an income to a cost factor.

– A German version of this text can be found here:
www.textundpr.at/spotify-kein-geld-fur-deine-musi