MP3 players may have been the first act of the digital music revolution, but it’s no longer a hardware issue. Nowadays it’s all about the platform – a streaming platform, to be precise. Rather than interact with an online shop to “buy” content, you can stream it straight from the Web, perhaps by looking up music videos on YouTube, or by using an online radio service such as Pandora or last.fm. Spotify is the fastest-growing of these streaming services, akin to a digital music library. It’s Searchable, instantly playable and yours for free – or a few quid a week if you don’t like adverts.
As a music fan, this is unparalleled. From classical concertos to art house jazz, indie to northern soul, nothing is beyond the reach of Spotify. If you don’t use it, you’re missing out, not least on my weekly playlists.
However, as with many good things, it’s not an uncomplicated indulgence. In recent weeks, some major names in music have taken the fight to Spotify and services like it, with some going as far as to withdraw their music from the service. In doing so, they’ve stepped away from a huge audience. Spotify alone has more than six million subscribers now, with as many as 24 million people accessing the service if you include the non-paying users.
When Thom Yorke and Nigel Godrich pulled their Atoms for Peace project off the service, they attracted a fair degree of criticism. (Yorke’s main band Radiohead’s catalogue remains there as EMI control the digital rights.) It’s much easier to say you won’t allow the world to stream your music for micro-payments when you sold millions of records when CDs still retailed for £14.99, argued some. And they have a point.
In response, Yorke has described Spotify as “the last desperate fart of a dying corpse”, adding that “because [Spotify is] using old music, because they’re using the major[ record labels]… the majors are all over it because they see a way of re-selling all their old stuff for free, make a fortune, and not die.” And here’s the thing: he has a point too.
Spotify’s own Q&A on how artists get paid says: “Spotify pays out the majority (approaching 70 per cent) of ALL of our revenue (advertising and subscription fees) to rights holders,” and in the three years since its launch has paid out more than $500 million in royalties. Key point: that is not $500m to artists. And the major record labels got a chunk of equity in Spotify as part of that deal, too. The big have been going alright, while the small…?
This same trend has been seen offline: according to one report, 60 per cent of the 20 top-grossing US live acts are aged 60 or over. The early part of the Twenty-First Century has, on the whole, not been a time for breaking bands. It’s been a time for reunions and reissues. The digital revolution has been more focused on monetising existing music than on finding new models. Perhaps the most absurd expression of this is the fact that it is not uncommon for labels to still deduct “packaging costs” from (packaging-free) digital sales before the artists gets their share.
Last week, David Byrne (of Talking Heads) followed Yorke, and wrote an article in the Guardian, saying that:
“[While] streaming looks to be the future of music consumption … if artists have to rely almost exclusively on the income from these services, they’ll be out of work within a year.”
Scale is everything when it comes to streaming. If you’re a small label or band, the revenue might not be significant compared to touring or commercial licensing. The challenge is how to get people to spend money on your work by itself, as opposed to on a subscription service shared with thousands of other artists. Oh, and how to pay for an album to be recorded in the first place. Streaming services don’t come with advances.
To highlight this issue, Damon Krukowski (Galaxie 500, Damon & Naomi) published the data on the payouts he received from Spotify and Pandora. At the highest end of the spectrum, Daft Punk’s song ‘Get Lucky’ reached 104,760,000 Spotify streams by the end of August: from which, Byrne estimates, the two members of Daft Punk stand to make around $13,000 each. Good, but that probably wouldn’t even cover the cost of making the video.
Have I bought more music since I signed up to Spotify? Absolutely. It is an incredible platform for discovery as well as enjoying the music you love? Definitely. Unfortunately, as Patrick Carney of the Black Keys and others point out, making the transition from being a new band wanting to be “out there” to making a living becomes increasingly difficult when all your music is already out there for free.
So, on the one hand, you have an incredible platform. On the other, the legitimate fear that by using it you are helping perpetuate a dying breed of record labels who, generally speaking, have long since stopped worrying about musical discovery and have been taken over by accountants and whoever is to blame for Bieber, Cyrus et al.
My advice? Next time you log on to Spotify and hear an artist you like, make sure you buy the CD. Go see them live and buy a t-shirt. Or two. And a poster. Because if you’re not paying very much to enjoy a great record, odds are that most people aren’t paying very much to enjoy the same record – which makes releasing the next record much more difficult for the artist in question.