Thanks for writing this article. You make some excellent points but i don't think it's a very balanced view of Spotify and the impact it's had on musicians.
"I've heard artists say that Spotify should pay out $0.01 per stream and I believe that in the long term, this level of payout will be possible in major markets, once the race to the moon (once the entire world streaming market is captured) has been completed and the only way to increase revenues is through price increases."
What incentive would Spotify have to increase payouts in this scenario, where they have essentially become a monopoly? They are already under significant pressure to continually grow, so why would we expect them to suddenly prioritize musicians?
To this point, their payout rate has decreased over time, and their actions have typically favored the major labels, as seen in their direct deals.(Spotify paid Sony Music up to $42.5 million in advances)
Your point about Spotify being a long-tail platform is interesting, but there are two additional details to consider. Digital distribution has an ongoing cost, so for most musicians, the streams must exceed a certain threshold to be profitable. Additionally, it's rare for a release to have long-tail popularity. Further,Spotify incentivizes and encourages frequent releases to drive novelty on the platform, putting significant pressure on musicians to constantly produce new "content."
I completely agree that the situation for musicians in the past was not always ideal, and frequently pretty horrible, and there is a tendency to look back with rose-tinted nostalgia. Some may have overly optimistic hopes that if they put their music on Spotify, they will automatically make significant income from it. Whereas in the past it could be basically impossible to get your music to people, at all.
Breaking through and gaining exposure has always been difficult. However, the situation has changed; an artist can now have global reach, and publishing music is much more accessible than it was in the past. Nevertheless, I don't think a venture-backed monopoly with an incentive to constantly grow as a "content-platform" (e.g. audio books and podcasts) is likely to provide a stable and enriching platform for all musicians.
Thanks for the article. Good points. Being an artist, I was rather puzzled after watching the final episode of The Playlist, the artists' view. Howcome she started the series playing for a super engaged audience in a cool club with a full band and then you find her in 2024 in a shitty bar, her pay cut in half as they didn't sell enough beer, with people talking loud over her music? She had a contract with Sony and was dumped. That sounds familiar, but rather dramatized.
And she's super good too!! Besides this, surely its business model can improve for artists, but Spotify has been around 8/9 years and huge labels for almost 70. Maybe we should give it some time. True, hardest part is to gain exposure: the real questions that should be answered are: at 0,004 x stream I should make one million streams x month to see 4000$, right? How much money should I invest in promotion (given that my product, targeting and scaling are real good) to get to one million streams x month? And how much should I keep investing to constantly reach new audience? Can I avoid relying of Fb ads to reach these targets? That said, if I have one million streams per month on Spotify I probably will have lots of streamings on other platforms and probably sold some merchandise and have a good sized mailing list of true fans. So, in the long run, this biz is better than the past one. That's one thing I'm certain of. True, 100.000 (probably 300.000 in 2/3 years) songs uploaded each day , plus the whole catalog from the past, is a huge competition. But let's say it takes 100.000$ in promotion to get to those one million streams in 4 years: its a lot of money for an indie artist but nothing compared to 250.000$ to spin your single enough times on the radio to make it a hit, like the majors do. So, in the end, the biz model is a better one. Can it get better? Sure. Will it get better? It's up to us.
Thanks for writing this article. You make some excellent points but i don't think it's a very balanced view of Spotify and the impact it's had on musicians.
"I've heard artists say that Spotify should pay out $0.01 per stream and I believe that in the long term, this level of payout will be possible in major markets, once the race to the moon (once the entire world streaming market is captured) has been completed and the only way to increase revenues is through price increases."
What incentive would Spotify have to increase payouts in this scenario, where they have essentially become a monopoly? They are already under significant pressure to continually grow, so why would we expect them to suddenly prioritize musicians?
To this point, their payout rate has decreased over time, and their actions have typically favored the major labels, as seen in their direct deals.(Spotify paid Sony Music up to $42.5 million in advances)
Your point about Spotify being a long-tail platform is interesting, but there are two additional details to consider. Digital distribution has an ongoing cost, so for most musicians, the streams must exceed a certain threshold to be profitable. Additionally, it's rare for a release to have long-tail popularity. Further,Spotify incentivizes and encourages frequent releases to drive novelty on the platform, putting significant pressure on musicians to constantly produce new "content."
I completely agree that the situation for musicians in the past was not always ideal, and frequently pretty horrible, and there is a tendency to look back with rose-tinted nostalgia. Some may have overly optimistic hopes that if they put their music on Spotify, they will automatically make significant income from it. Whereas in the past it could be basically impossible to get your music to people, at all.
Breaking through and gaining exposure has always been difficult. However, the situation has changed; an artist can now have global reach, and publishing music is much more accessible than it was in the past. Nevertheless, I don't think a venture-backed monopoly with an incentive to constantly grow as a "content-platform" (e.g. audio books and podcasts) is likely to provide a stable and enriching platform for all musicians.
Thanks for the article. Good points. Being an artist, I was rather puzzled after watching the final episode of The Playlist, the artists' view. Howcome she started the series playing for a super engaged audience in a cool club with a full band and then you find her in 2024 in a shitty bar, her pay cut in half as they didn't sell enough beer, with people talking loud over her music? She had a contract with Sony and was dumped. That sounds familiar, but rather dramatized.
And she's super good too!! Besides this, surely its business model can improve for artists, but Spotify has been around 8/9 years and huge labels for almost 70. Maybe we should give it some time. True, hardest part is to gain exposure: the real questions that should be answered are: at 0,004 x stream I should make one million streams x month to see 4000$, right? How much money should I invest in promotion (given that my product, targeting and scaling are real good) to get to one million streams x month? And how much should I keep investing to constantly reach new audience? Can I avoid relying of Fb ads to reach these targets? That said, if I have one million streams per month on Spotify I probably will have lots of streamings on other platforms and probably sold some merchandise and have a good sized mailing list of true fans. So, in the long run, this biz is better than the past one. That's one thing I'm certain of. True, 100.000 (probably 300.000 in 2/3 years) songs uploaded each day , plus the whole catalog from the past, is a huge competition. But let's say it takes 100.000$ in promotion to get to those one million streams in 4 years: its a lot of money for an indie artist but nothing compared to 250.000$ to spin your single enough times on the radio to make it a hit, like the majors do. So, in the end, the biz model is a better one. Can it get better? Sure. Will it get better? It's up to us.