A few weeks ago, Spotify along with Amazon, Google, and Pandora appealed a ruling by the United States Copyright Royalty Board to increase mechanical royalties by 43.8% over the next five years. The appeal was immediately decried
by the National Music Publishers’ Association and its leader David Israelite. Spotify responded with a bit of word salad
that tried to position the company as loving songwriters, but also cravenly pushing for an appeal that directly hurts the pockets of these workers:
A key area of focus in our appeal will be the fact that the CRB’s decision makes it very difficult for music services to offer “bundles” of music and non-music offerings. This will hurt consumers who will lose access to them. These bundles are key to attracting first-time music subscribers so we can keep growing the revenue pie for everyone.
Whether this ruling does indeed back bundling harder is rather moot to me, because the type of bundles that Spotify offers with services like Hulu explicitly devalue music and how much they’ll be paying out to artists. So it’s hard to feel any loss right there. Spotify’s attempt to appeal towards consumers’ hearts via their wallets to pit them against the interest of songwriters is something that I find morally repugnant. Music consumers aren’t fans of Spotify (they’re just fans of the fact that it provides music that they enjoy), so if suddenly there was no music on the platform, users wouldn’t stick around for milquetoast ambient tunes. That’s why I found the anti-worker, pro-business angle that Ed Christman took in Billboard
So while Spotify has so far been unprofitable on an annual basis, its road to profitability would have gotten a lot longer if the publishers had gotten what they wanted. And eventually, that wouldn’t have been good for the overall music industry – including music publishers.
In his piece, Christman crunches the numbers and discovers that if music publishers got their way, then Spotify would potentially be paying 87% of its revenue to rights holders, but if Spotify and the other tech companies won, it would result in them paying less towards songwriters than they do today. This court case isn’t about tech companies simply wanting to pay less, but about them willfully attempting to further reduce down payments to their labor force. What’s odd is that Christman’s analysis doesn’t investigate why Spotify’s business model would suddenly become unsustainable if the company were to make minor work concessions. Instead, Christman implies that songwriters, because of their desire to get paid more for their work, could potentially hurt the music industry.
Spotify may rightfully call out Apple’s monopolistic behavior
with regards to how the company runs its app store, but the Swedish company wants to do the same with songwriter wages so that its unprofitable business can continue to operate. Christman and Spotify’s logic is the kind of austerity pabulum that I expect to hear against striking teachers that simply want higher pay, reduced class sizes, and better resources for their children. However, songwriters aren’t sitting out this public relations fight. Yesterday, a number of songwriters, who were part of Spotify’s Secret Genius program, penned an open letter to the company
—including one of my favorite songwriters Babyface—calling for it to drop its appeal to the CRB. An encouraging sign that songwriters can organize around such an issue, and it’ll be interesting to see Spotify’s response given another recent tussle with American organizing labor.