With its 2019 revenues reaching $7.3 Billion, Spotify is undoubtedly the leader among streaming platforms. With over 144 million premium subscribers, Spotify might seem like a great place for artists to make a living. Its users might think that the $10-20 they monthly fee for streaming subscriptions goes directly to their favorite artists but unfortunately, that's far from reality.
Criticism over Spotify royalties
Within the past few years, Spotify has been teaming up with labels, changing the algorithms and the playlist placement in order to share less royalties with independent artists. The United Musicians and Allied Workers Union has even launched a campaign against them!
The campaign is called ‘Justice at Spotify’, and incorporates a list of demands which include a raise in the streaming royalty to 1 cent per/stream, transparency on all contracts, and adopting a user-oriented payment model.
In the United States, songwriters even took Spotify to court with an appeal to increase by 44% the streaming royalties paid at that time. The court turned down the request, but the proceedings (and negative PR) continued.
Is Spotify the only streaming platform paying low royalties? Of course not, but as a major player and the most popular music app, the percentage of what artists make is pretty low. You can see the weighted average per-stream payout rate, by platform and in US dollars, in the chart below:
As we can see, Spotify is not doing so well in terms of compensating artists for their hard-earned work, while Amazon Music Unlimited tops the list; Spotify is 9th.
Artists on the matter
The truth is, streaming companies rescued the industry from piracy, but while executives from label companies enjoy billions of dollars in revenue, many top-tier musicians have difficulty merely surviving.
Indie star Nadine Shah in a hearing with the British parliamentary committee, said, “All I know is that the earnings from my streaming are not significant enough to keep the wolf from the door.”
Hardly any artists have dared to speak out as she did. Most, she said fear retribution by streaming platforms and major labels.
Even though she has millions of listeners on Spotify and was nominated for Britain’s top Mercury Prize, she stated that “I am in a position now where I am struggling to pay my rent.”
Tom Gray of the band Gomez, founder of the Broken Records initiative to raise awareness on the issue, said, “That is not an exaggeration… The music industry has its roots in gangsterism and has never shaken that off.”
Producer Nigel Godrich and Radiohead singer Thom Yorke removed their music from Spotify. In a tweet, Yorke stated, “Make no mistake - new artists you discover on #Spotify will not get paid. Meanwhile, shareholders will shortly be rolling in it. Simples.”
Taylor Swift is also an avid critic of the streaming giant. In 2014, she removed her discography from Spotify. Swift stated, “I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of the music. And I just don’t agree with perpetuating the perception that music has no value and should be free.”
In order to turn away the attention from unfair payments, Spotify focused their efforts on promoting their new product, supposedly in support of artists.
In June 2017, Spotify launched the Secret Genius initiative to “highlight the contribution songwriters and producers make to the music industry and artists’ careers”.
Two years later, as mentioned above, the CRB ruling happened, but Spotify appealed the case in the US. The court case is continuing, with songwriters having high hopes that the hearing will unfold in their favor.
Note the Noteable!
While all of this is still ongoing, Spotify recently launched Noteable, “a global home for songwriters, producers, and publishers. The company states that “the work of songwriters, producers, and publishers informs so much about what we do at Spotify.”
Spotify announced that the new initiative will act as “one central space for the community to learn about everything Spotify has to offer” via Instagram, newsletters, a new website, and Twitter.
In simple terms, Noteable is a community for artists to connect, get exposure and credits for their work. Songwriters will be tagged on the songs they wrote, producers will get credits for their input, and DJs will get mentioned for their beats.
Sounds cool right? The thing is that it does not change the way artists are actually paid for their work. Noteable explains that the platform is a new way to share the songs that are written on Spotify, as well as to be discovered by potential collaborators and fans, but nothing is mentioned regarding potential payments and new royalties estimations for streams.
A PR stunt
Noteable could be viewed as a PR stunt to throw the attention away from the fact that, deep down, they are not working towards the benefits of artists. Spotify pockets the money and does not give artists much, paying them a portion of what they should be paid. We still have to wait and see how the courts will proceed, perhaps there might be a change in favor of music producers and creators.
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