I don’t think it’ll be a shock for those reading in the industry that there’s been a bit of negative chatter around Spotify since going public. This can be seen in the number of 2018 departures from the company and that many were on the artist/public relations side. People leave jobs for various reasons so I’m hesitant to overreact too much, but each departure on the curatorial and editorial side did raise my eyebrow.
Spotify in 2018 made a number of announcements that when taken as a whole show a company preparing for change. It announced direct artist deals much to the chagrin of major labels, artists eventually will be able to upload music directly to the platform, and it invested in Distrokid
to further buttress these efforts. There is also the speculation it’s going to attempt to sell artists and label tools that raised the eyebrows of a number of people. Daniel Ek even said as much during the company’s Q3 earnings call
Our strategy in our marketplace side of the business is the same as we have on the rest of Spotify, which is it’s a freemium business, meaning there will be a certain amount of products which artists and labels can get for free, and there are others which we will charge money for. So, that’s an evolving strategy when it comes to our product portfolio.
This contrasts rather sharply with Apple Music and Bandcamp, where both companies introduced an artist first tool set but didn’t offer any hints or suggestions it’d need to charge for this access. The reason is fairly clear, neither’s business model requires squeezing the musicians, who provide the primary content of their platform, for money. A couple unnamed music executives expressed frustration with this proposal to Music Business worldwide back in August
We’ve been in heated discussions with Spotify on this point for some time,” says one source. “We’re the ones investing in the artist, and yet we’re left under-educated when a manager calls wanting to discuss a data point. Spotify hides behind a handful of wonky reasons for this, including split rights between labels and publishers.
“Show me how much Spotify has invested in the career of a given artist versus what we’ve invested. And then show me what rights they own as a result. In both cases, the answer is zero…They’re planning to sell us data which already belongs to us.”
The issue right now, and certainly could change once this officially is put into action is that unlike equivalent offers of Bandcamp or even SoundCloud is these are only accessible by artists and managers. Now why would artists want labels to be allowed access to the same tools? Individual artists, along with their managers, don’t sit at the table and bargain with Spotify these kind of contract details. Music Business World phrased it as such: “Ek said that Spotify expected to move from a handful of licensing deals with large players to ‘lots and lots of deals that will happen [with] individuals as artists and labels are purchasing more services’.” There could be large deal with certain players but ultimately Spotify would want to see many artists signing-up for single deals. The company’s interest of working directly with artists neutralizes an ability to properly organize against such potential charges, if there is already such pushback at the executive level why would artists be any happier to foot the bill.
Last year Daniel Ek at Spotify’s Investor Day
said “Our mission is to enable one million artists to live off their work.” The cellist Zoe Keating last month said that she received $4,388.93 based on 1,154,513 streams using RouteNote as her distributor on Spotify
, which divided by 12 averages to less than $400. Do a majority of artists receive a million streams in a year? I’d guess no, but also if someone reading this knows for sure one way or another I’d love to know. Spotify loves to use stats in its marketing campaigns, but I’d doubt that a majority of artists were able to get a million streams on the platform. Even if a majority of artists were able to get a million streams, that wouldn’t be anywhere near enough to live off, especially if an artists had any children, live in a major city, or were in America and potentially needed to pay for health care. The Swedish company would appear to still be a long way towards that goal.