Almost every indie artist we know of has a story of a respectable number of streams on Spotify leading to a payout so insulting that outright theft would have been better. At least if the music had been stolen, no one would have been paid. In the case of Spotify, someone is definitely getting paid: their market cap is now over $ 54 billion. But with song royalties estimated at $ 0.00348 per stream, this is not the working-class recording artist.
We’re saying almost every artist has a story, as some have chosen to avoid the platform altogether on principle. But it comes at a price. Spotify is growing rapidly, with 345 million active users, including 155 million paying subscribers. One hundred and thirty-eight million users have been added in the past two years alone. Not being there is a risk. Streaming dominates the music industry, and if you’re not, you might as well be invisible. And with 83% of all US recorded music revenue now generated through streaming, you have little hope of making a living otherwise.
What Spotify does is analogous to what Amazon does. The latter creates a marketplace that sellers cannot afford not to use. Then it collects data on these third-party products that allows them to sell at lower and lower prices, ultimately putting them out of business. Likewise, Spotify collects large amounts of data from its users, which it can use to direct them to music that benefits their pay-to-play partners. In some cases, Spotify has even ordered similar-sounding music to be placed on popular playlists, in order to avoid paying royalties. The Union of Musicians and Allied Workers, with members across the country, is demanding transparency about Spotify’s data uses and higher payout for all rights holders – a dime per stream. They want to know Spotify’s sources of revenue beyond ads and subscriptions, such as payments for algorithm priority and playlist placement, as well as the terms of Spotify’s partnership agreements with major labels. But Spotify chooses to operate in the dark, blaming artists for not working hard enough and exploiting the workforce that creates the content it sells.
The coronavirus pandemic has decimated the entertainment industry. Those who increase paltry streaming payments with live performances have found themselves unable to pay their rent. In the spring of 2020, some of COVID’s darkest days, Spotify added an optional ‘tip pot’, allowing fans to donate money to their favorite artists if they choose – essentially acknowledging that they do not pay artists enough on their own. Insulting the dignity of musicians by turning them into digital street musicians is not the right approach for a multi-billion dollar multinational.
The music industry has always been exploitative, but it has never been so consolidated. Independent musicians have always known how to find their way to the means of production, distribution and to their fans. Spotify has created a wall of opacity that puts all of this in jeopardy.
If Spotify is allowed to continue to treat artists the way it has been, the working-class recording musician in America will cease to be able to earn a living. Congressional leaders concerned about the exploitation of workers, technology monopolies and corporate anti-competitive behavior should ask Spotify about their business model.
Damon Krukowski was a member of Boston indie rock band Galaxie 500 and is now recording with Naomi Yang as Damon & Naomi. Joyce Linehan was former Boston Mayor Martin J. Walsh’s chief policy officer and co-owner Ashmont records, an independent label based in Boston.