Spotify, Radiohead and royalties

I’m going to write about Spotify for a bit.

This may affect my objectivity in terms of this article, but first a disclaimer; I fucking love Spotify. Really, probably the worst thing about coming home from America meant I couldn’t access Spotify for free any more. Essentially the entire pantheon of recorded music worth knowing, plus an endless treasure trove of new music and a ‘related artists’ tab spawning an endless downward spiral of new music discovery that makes those late night procrastination Wikitrails seem like mere child’s play? It was like manna from heaven for an aspiring hipster music nerd like myself.

And now the king of the hipster music nerds, Mr Thommy Yorke himself, has issued a sermon from his giant lazy-eyed mount, and the world is sitting up and thinking about Spotify again.

In a series of separate Tweets this week, Yorke and Radiohead producer/Atoms For Peace bandmate Nigel Godrich explained they had removed AFP’s album ‘Amok,’ Yorke’s solo album ‘Eraser’ and Godrich’s band Ultraista from Spotify, in response to a model that (according to them) did not do enough to financially support artists while at the same time, lining the pockets of businessmen and stockholders.

“It’s bad for new music. The reason is that new artists get paid fuck all with this model. I think the point is – that streaming suits catalogue.. But cannot work as a way of supporting new artists work.. Spotify and the like either have to address that fact and change the model for new releases or else all new music producers should be bold and vote with their feet,” is a selection of over a dozen Tweets Godrich sent on July 15.

Yorke posted the following simple statement: “Make no mistake new artists you discover on #Spotify will no get paid. meanwhile shareholders will shortly being rolling in it. Simples.”

OK, first things first. Yes, it’s pretty well known that artists receive almost microscopic revenue for each Spotify stream. Figures vary, but most widely-circulated payments to artists range from $0.0003 to $0.004 per stream on Spotify. To put it in perspective, artists would need between 1000 and 10,000 streams receive enough for a cup of coffee. If you’re a Frank Ocean, you’d get that nice cappuccino all to yourself. If you’re Mumford & Sons, you’d be splitting that vegan soy fair trade coffee between the five of your bearded waistcoated partners in banjo bastardry.

They’re not wrong. Artists make shit to all from Spotify streams (see the above coffee example). But for me, the benefits of being on Spotify (of which there are many) far outweigh those of not being on Spotify (of which there are literally none I can think of).

Let’s get the most obvious out of the way first. I’ve spent five years working on a creative arts degree in journalism, and haven’t taken a maths class since I was 16 – but even my rudimentary grasp on the number plane seems to indicate that a very few dollars is more than no dollars. The most financially successful and secure artists today are the ones that have innovated and embraced or even invented new revenue streams – crowdfunding albums or tours, developing smartphone or tablet apps, selling their products in new formats, creating exciting merchandise bundles to encourage people to splash out for physical products rather than just download online. And to add to that revenue through Spotify, no matter how small that addition would be, can’t be a bad thing.

(for a better idea of payments, Spotify reportedly recorded over $100million loss in 2010-11, yet its contracts with major labels require either a $200million payment per year of 75% of annual revenue – they paid a minimum of $150million in royalties in 2012).

But for me, the biggest advantage artists have in being part of Spotify is the massive audience they are exposed to. I can’t tell you how many new artists I found, simply by trawling through the ‘related artists’ or ‘recommended for you’ tabs on Spotify. Action Bronson, TNGHT, The Story So Far, ASAP Rocky, Killer Mike, Schoolboy Q, California X, Ceremony, Titus Andronicus, Cheatahs, FIDLAR, Parquet Courts, Peace – just a handful of artists I’ve come to know and love thanks to their simple inclusion on Spotify lists. Granted, I’ve not bought any tangible products from these artists, but I have bought tickets to see Action, Cheatahs, TNGHT and FIDLAR in concert; I will be buying tickets to see Peace in September, and no doubt will jump at any upcoming chance to see the rest in concert; and for every single one, bar none, I have spruiked my love for them online, to friends, and to everyone who will listen.

It is this simple promotion tool, the ability to be quickly found and listened to, that is such a boon for bands in the digital age. Before Spotify, even in the age of music piracy, if I wanted to hear these bands, I would have had to download their album then get around to listening to it. If there is a bigger first world problem than this, I literally don’t want to hear it – but my point is that Spotify makes it infinitely easy to find new bands, check them out, and decide if you like them or not. If you don’t dig it, the band hasn’t lost anything. If you like them, the band has a new fan through doing literally nothing but making their music more freely available. The most recent figures I could find are from August 2012, and show Spotify had 32 million registered users and over 16 million regular users. That’s a pretty huge audience.

Drowned In Sound editor Sean Adams posted an article about this on Facebook, which led to an incredibly apt and succinct statement from one man with the brilliant name of Seymour Quigley. A self-described struggling musician, he put my above 890-odd words into one sentence when he said “it’s people hearing what I’m doing that matters most, ’cause otherwise you’re just wanking into a void.”

Wanking into a void (in before “that’s what she said”).

Of course I would love to see musicians getting paid $20 per stream of a song and living sustainably off the profits of Spotify; but in this case, that’s just not going to happen.Artists won’t make much out of Sotify, directly – but the fringe benefits of being on the service, using it as a free promotional tool, are massive. Getting your music out there and noticed by the masses is 90% of the music business (by “music business,” I mean all the infrastructure and professional services around the music industry – promotion, PR, radio, media and the rest).

If you can do it for free, through this immensely popular service, and get a bit – if only a bit – of money out of it, what’s the harm? In today’s world, not getting on board this train is going to leave you behind in the dust.

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