Social media has been abuzz of late over Spotify CEO Daniel Ek’s comments in a recent interview published in Music:)Ally dated 30 July 2020. These remarks followed the release of Spotify’s latest quarterly financial results.
The quotes getting the most attention relate to Ek’s opinions concerning what artists have to do in the current music industry to be successful. In addressing the criticisms of Spotify – that artists lose out on revenue via streaming – Ek asserts that this is a “narrative fallacy” and places the blame on artists who do not release music frequently enough.
Ek’s advice to artists though has nothing to do with the music itself — “The artists today that are making it realise that it’s about creating a continuous engagement with their fans. It is about putting the work in, about the storytelling around the album, and about keeping a continuous dialogue with your fans.”
It’s all about the marketing – look at his key words here, “engagement”, “storytelling” and “dialogue” – nothing at all to do with the quality of music, which to be fair, Ek knows nothing about. However, this is a bit of a set up for Spotify’s ultimate plans for the platform, which I will get into later.
So while the bulk of the focus has been on Ek’s comments regarding artists’ lack of productivity or lack of engagement with fans, if one looks more closely at Ek’s other remarks in the interview, there is a more devious narrative being presented.
These comments align well in his claim that the entire idea of artists receiving low income from Spotify is a “narrative fallacy”.
To wit, “It’s quite interesting that while the overall pie is growing, and more and more people can partake in that pie, we tend to focus on a very limited set of artists,” in other words, the artists that have criticised Spotify for low royalties.
“In the entire existence [of Spotify] I don’t think I’ve ever seen a single artist saying ‘I’m happy with all the money I’m getting from streaming,” insinuating that Spotify has been demonised unjustifiably and “Stating that publicly. In private they have done that many times, but in public they have no incentive to do it. But unequivocally, from the data, there are more and more artists that are able to live off streaming income in itself.”
But of course, Ek never quite provides any data whatsoever to back this statement. In fact, there are independent sources that have determined that “At an average payout of $0.006 per song stream, a musician living in the United States needs 3,000,000 plays annually to have a gross income of $12,000.” (James Shotwell, Haulix, Hypebot 2019)
Thus, Ek’s argument that artists are doing very well by Spotify is without basis.
Not only that, who does Ek raise up as a shining example of an artist connecting with fans successfully. Taylor Swift! One of the most popular artists in the world – that’s his benchmark? That’s like pointing out that the 1% are actually making more money during COVID-19 to conclude that overall, the average person is benefiting financially from the pandemic!
So, it’s quite clear that Spotify is not really set up with the artists’ welfare in mind. Based on their own financial results, the streaming business is not even profitable on its own terms. Rather, it would seem that Spotify is building up a membership base to establish itself as a Facebook of music (of sorts). Which explains their introduction of the artist marketing tools for which they hope to generate revenue from.
Thus, the time will come when record labels and artists will PAY Spotify to push music through their playlists and channels, with streaming itself being a loss leader with a view of capturing the marketing dollar – remember “engagement”, “storytelling” and “dialogue”, which Spotify will provide for a fee.
This may eventually lead to the demise of the music industry as Spotify will then determine what music gets to be successful based on their algorithms and market research, ending up in an almighty circle jerk of labels and Spotify, with music and artists the biggest losers.
As far as indie artists are concerned, Spotify is a losing proposition. It is time for indie artists to put their money where their mouth is and BOYCOTT Spotify. Use Bandcamp or Soundcloud as viable alternatives to the Spotify model. It may not do much to get Spotify’s attention but at least, indie artists may operate on their own terms rather than Daniel Ek’s. Merely tweeting angry criticisms of Ek and Spotify is simply not enough anymore.
… still there’s more …