Spotify Launches New Pay “Transparency” Website

I support the argument that Spotify needs to pay more per stream but I also don't think people realize how much they are probably struggling to keep up with these royalty payments. I wouldn't be surprised if they raise the monthly subscription rates a few dollars to accommodate this which I'd personally be fine with but I can already see people complaining about.

 

Spotify will never survive with their current pricing model. It should probably be about $30 a month IMO. Plus family subs are $15 for six accounts... not sustainable.

 

The actual dilemma for Spotify is that if they do raise prices to what it should actually be, platforms like Apple — which already pay a higher rate because they treat music/streaming as a loss leader for the broader hardware ecosystem — will capture millions of subscribers from them by keeping the price the same.

 

I watched the “how the money flows” video and can’t help but feel like it’s misleading. Yes, I get that Spotify doesn’t directly pay artists (money goes to labels/distributors/etc.) so they are trying to suggest that underpayment to artists is not their fault. But what’s missing are the negotiations between Spotify and these middle parties, and how these decisions impact the contracts artists sign. For example, the label knows they are getting $X per stream, which then the artist get a cut of. That cut would be more if Spotify paid more to the label. I get it, Spotify doesn’t have a sustainable business model as-is but at the end of the day, the ones who make this company work (the artists) are still getting screwed.

This entire site is a PR response to ongoing criticism under the guise of providing “transparency.” Gross.

 

Thinking more about this...

Why doesn’t Spotify have a direct-to-artist pay model? They say 2/3 of of the $ currently are paid out to the labels/distributors/etc. which then feed into artists pockets. I understand the benefits of an artist going with a label, especially to start (marketing, promotion, getting you on streaming services) but for more established musicians, it seems to make sense to go direct with Spotify. Take Japanese House as an example: at this point I’m going to hear about her new music one way or another on sites like this or social media, and will stream it. If Spotify went direct with her, then they could take a larger portion of the $ (say 25/75 split) and pay the artist directly — that 25% to Japanese House ends up being a heck of a lot more than the pennies that come from the 2/3 original business model, driven through the labels. Someone please educate me!

 

Setting aside the infrastrucural challenges with paying wildly different rates, legally they’d have trouble doing that because they negotiate deals with the labels that preclude multiple scales of rate. Instead it’s to their advantage to pay more money to majors and reap the benefits of a broader user base.

 

I see - thanks for the response.