Spotify Provides Unusual Insights Into the Reeling Music Business – and the Struggles of Active Musicians
India.Arie was already bored with the meager ratings it was getting from Spotify when Neil Young decided to leave the platform.
Young had clashed with the streaming provider over his famous podcast host Joe Rogan, whom he accused of spreading misinformation about the corona virus. The Grammy-winning R&B singer decided to say goodbye to Spotify as well, citing low pay and Rogan’s “racist language.”
“Periodically, we want a particularly powerful person, a person that people are definitely paying attention to, to open the door,” Arie said in an interview. “When Neil Young opened the door, I walked through it too.
However, leaving proved to be difficult. Arie does not own most of her personal songs. And Motown, which owns the rights to much of her catalog, refuses to take her off Spotify.
“I am going to keep asking anyway. I am going to keep asking. I’ll find a way around it,” she said. “I do not need my music on Spotify.”
Other artists who wanted to leave Spotify after Young asked the platform to choose between the rocker and Rogan ran into similar obstacles. David Crosby, a founding member of the Byrds and Crosby, Stills & Nash, first had to approach a leading group that owned the rights to most of his songs.
Spotify’s conflict with Young shed a whole new light on the internal workings of a music company that has yet to adapt to the demand for virtual music, and provided new unusual insights into how artists are paid and the energy of streaming services that act as gatekeepers for hundreds of thousands of music lovers. Meanwhile, major stars – from Bruce Springsteen to John Legend – have made hundreds of thousands marketing the rights to their songs, losing control over how they are used within the process.
But for musicians who rely on traveling to make money, the brand new financial reality created with the help of the pandemic and evolving streaming offerings can be daunting.
“It’s my wish that every aspect of the traditional war, the Rogan Neil Young component, also lands with somebody, that people have an understanding of the conflict of running artists in search of honest pay,” stated Eve 6 frontman Max Collins.
If you “want to help your favorite artists, streaming is not always the way to go. It’s the anti-method,” stated Arie, who has offered hundreds of thousands of records. “Where else in the world does someone get paid even a fraction of a penny for their actual life’s work?”
Spotify declined The Post’s request for comment for this story, but stated it can pay artists well and supports musicians.
When Spotify launched in the United States in 2011, the music business was already in a state of flux. Napster, the peer-to-peer file-sharing software provider that launched in 1999, had led to tremendous piracy of music. To combat this, the company began allowing buyers to purchase virtual copies of songs on structures like Apple’s iTunes – but this corporate version did not last.
“The companies that controlled many of the rights involved faced a natural demise as the download version no longer sold itself. So they were looking for a way to increase their share of the pie,” explained musician Steve Albini, known for producing PJ Harvey and Nirvana.
The company turned to stream. Since buyers do not own the songs, money is made every time a track is played.
Google, Apple, and Amazon launched their own structures, and soon most songs were distributed through streaming offerings, surpassing radio. By mid-2021, more than 500 million customers subscribed to a music streaming provider, not to mention the many hundreds of thousands using free, ad-supported versions of it, according to Media Research. Spotify has emerged as the most important subscriber, with more than four hundred million monthly customers, more than the population of the United States.
The switch initially seemed worthwhile for musicians and record labels. At first, it felt like a “comfort,” explained Will Butler, a solo musician and central member of Arcade Fire. His band became known in an age before streaming, bolstered by music blogs and, yes, illegal music sharing. Still, he saw the emerging era in a positive light. “The fight against piracy was just so stupid,” Butler said. “It was kind of a comfort to see a person who wanted to do something that just worked.”
New Zealand rock band Unknown Mortal Orchestra said in a tweet that Spotify has been “very important to me as an independent artist.” Piracy had taken away the price of music, and “if anything, streaming has brought the price back.”
The downsides quickly made themselves felt, however – and it was generally about money. Of every dollar of revenue Spotify generates, 58.5 cents goes to the owner of the music recording (usually a record label), 29.38 cents to Spotify, 6.12 cents to the owner of the publishing rights (usually the songwriter), and six cents to the mechanical rights (which are regularly, but no longer always, held with the aid of the songwriter), according to a 2016 research with the aid of Manatt, Phelps & Phillips, a firm that specializes in offering expertise.
However, it takes quite a while for a greenback revenue. Artists receive between $0.1/3 and $0.0054 per play of their music on Spotify. The usual fee per play on Apple Music is $0.01.
According to Spotify’s data, 13,400 artists earned more than $50,000 and 7,800 earned more than $100,000 in royalties for recordings and releases in 2020. The musician could receive a fraction of that amount at most.
“As someone who loves music, I love being able to pay attention to it all the time,” Butler said. But the meager payouts make him feel like he’s eating the very component that’s destroying him, he said, comparing using Spotify to a “cab driver using Uber.”
The payouts from streaming providers can be rewarding for some artists, said Sean Patrick Rhorer, who owns Distance Management, which represents artists such as Julien Baker and Quinn Christopherson.
“Streaming encourages repeat listening. In that way, it supports the concept of producing albums instead of singles,” Rhorer said. And impartial artists, who are much more likely to get favorable contracts, are regularly “in a pretty precise role to make quite respectable money.”
“It’s not perfect now, but it’s not,” he added. “CDs were not perfect. Vinyl is not perfect now. Eight-track records were not perfect.”
Who makes money on a regular basis depends on the contracts artists sign with record companies at the beginning of their careers. Most songs include wonderful copyrights: one for the musical composition (the combination of melody and lyrics) and one for the actual sound recording of the melody (called the “handle”). Most traditional pre-streaming contracts assigned the sound recording to the record companies, while the musicians retained the publishing rights.
This split meant that most artists did not have complete control over their tracks. And some leading artists, from Bob Dylan to Tina Turner, have offered their catalogs of titles, whose prices have skyrocketed with the exponential growth of streaming offerings and the emergence of new structures that use titles, including TikTok and Peloton.
Young himself does not own all of his own tracks, in part because he sold 50 percent of his catalog in 2021 to the British financing company Hipgnosis for a sum of one hundred and fifty million dollars. When he decided to take over Spotify, he first needed the approval of the companies that managed the licenses for his tracks.
The often puny payouts to artists and their record labels can be traced back to the early 1900s with another development in track technology: the subscriber piano. Composers, including John Philip Sousa, were convinced that the self-playing piano could erase the desire to buy sheet music because that was how they made money. Piano manufacturers argued that the piano rolls (the paper rolls with the holes that tell the piano what to play) were not copies of the composers’ pieces because humans could not read them – only machines could.
The dispute eventually led to the Copyright Act of 1909, which states that a person may use or play a tune written by another person as long as he pays the owner of the publishing rights a reasonable price set by the authorities. “These days, if you are a music publisher, you are negotiating how much commission you are going to get from Spotify, Apple, or Amazon, and they have done a very good job of that,” said David Israelite, chairman of the National Music Publishers’ Association. “On the songwriting side, the publishing side, you do not negotiate a price. You do not have the right to say no. The regulators set the price, and that’s it.”
Just lately, in 2018, the Copyright Royalty Board, a panel of 3 judges, raised the payout price for author royalties from 10.5 percent to 15.1 percent – a 44 percent increase. But Spotify, Amazon, Pandora, and Google have effectively appealed that decision. None of the companies returned calls and emails for comment. (Amazon founder Jeff Bezos owns the Washington Post).
“These streaming offerings have expanded the reach of music and literally provided many benefits to fans and music lovers,” said Todd Dupler, who handles advocacy and public reporting at the Recording Academy. “But the payback for the artists and songwriters who want to do this for a living is still not as great.”
The transition has been difficult for some artists, especially those who have made most of their money in the past from travel and product sales, which plummeted at one point during the pandemic.
Spotify “took away 1/2 of my income. And Covid took away the other half,” Crosby, who has twice been inducted into the Rock and Roll Hall of Fame, said in an interview. “I am eighty years old. I am a diabetic. I am a transplant, so I am immunosuppressed. In that way, I do not have anything to fight the covid with. In fact, it’s like I have a gate painted on. So I have not dared to “go out” and play concerts.
“That’s why I had to promote to Irving Withinside in the first place,” he added, mentioning the sale of his catalog to Irving Azoff, head of Azoff MSG Entertainment. “Because of them and because of Covid.”
In some companies, the title has also taken a back seat to an inexpensive form of entertainment: podcasts.
Spotify has spent more than $500 million since 2019 to acquire major podcast companies like Gimlet and The Ringer. Spotify reportedly spent more than one hundred million dollars on “The Joe Rogan Experience” in 2020.
Unlike records, podcasts are exceptionally clean and inexpensive to produce. Rogan typically releases 4 to 5 episodes per week, each lasting at least 3 hours. Each episode has the aforementioned eleven million listeners.
All of the Grammy-winning Arcade Fire’s albums since their 2004 debut album, Funeral, have included much less than 5 hours of audio. That’s much less than Rogan’s episodes.
“Part of their release is to keep people engaged,” Albini said. “A podcast that produces numerous LPs of recorded material every week is probably much more rewarding for Spotify than a band that puts out maybe one album every year.
Spotify CEO Daniel Ek seemed to reinforce that version in a July interview with Music Ally. “You can not release a track every 3 to 4 years and assume that’s enough,” he said. “The artists who are making it these days understand that it’s about building an ongoing relationship with their fans.”
Podcasters also have a tendency to have more influence over what they produce. Last week, social commentator and “Bad Feminist” creator Roxane Gay decided to take her podcast off Spotify, saying, “I do not want my podcast on a platform that favors a voice like Joe Rogan.”
She owns the show, “The Roxane Gay Agenda,” and had the help of Luminary, the community that produces her show. To leave Spotify, Gay said, it “really just took flipping a few switches to remove the podcast, and it happened immediately.”
For some artists, the company’s upheaval was daunting. “You need to make a track that people will pay attention to and feel some emotion or dance to,” Butler said. “You need the praise more than the money. But there are people making billions off it, so maybe the praise seems bigger than the money.”
Arie added, “Music is constantly passive to your ears. You are in the shop, and it’s there. You get in the car and it’s pouring out of the radio. People do not think about the human electricity behind any of these songs. Every song needs a few people to make it, and a few people to promote it. But for so many, it’s “like air. It’s just there, so [people think], why is care who’s behind it?”