Pulling Music Off Spotify Sends Exactly The Wrong Message

from the driving-people-back-to-piracy dept

There's been a lot of hubbub the last couple days over Radiohead frontman Thom Yorke and producer Nigel Godrich deciding to pull Yorke's solo work and his songs with his "new" group Atoms for Peace off of Spotify, and then have each of them go off on a bit of a Twitter rant about how Spotify doesn't pay enough.

"The numbers don't even add up for Spotify yet. But it's not about that. It's about establishing the model which will be extremely valuable," Godrich, whose production credits include albums for Radiohead and Paul McCartney, tweeted. "Meanwhile small labels and new artists can't even keep their lights on. It's just not right."

He continued: "Streaming suits [back] catalogue. But [it] 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. [Streaming services] have no power without new music."

Of course, this is nothing new. We see the same sort of misguided complaint pop up every so often. And, as always, the decision gets everything almost 100% backwards. Pulling music off of Spotify doesn't help artists get paid. It merely drives people back to piracy. Yes, small labels and new artists have lots of challenges today, but that's always been the case. In the past, the vast majority of new artists were never able to make a dime. Today, they have lots of options for how to make money, but their biggest issue is just getting heard in the first place -- and that's one thing that Spotify helps with. Not being on Spotify means that, for many Spotify users, you don't exist. I don't see how that helps at all.

Of course, what these complaints miss is that Spotify (and the other business that normally gets attacked, Pandora) are still relatively small businesses. If they're ever going to be able to grow to the point that they can actually pay the sort of money these artists expect to get, then they have to be allowed to do so. Yet, both Spotify and Pandora currently are nowhere near profitable, and a big part of that is because they're paying out much more than sustainable rates -- and the copyright holders are still complaining it's not enough.

But we live in a world now where no one can really just sit back and wait for the checks to come. You have to be looking at a multi-platform strategy to survive and to thrive and -- contrary to the claims of Godrich, above -- plenty of new artists are figuring that out. They use Kickstarter and Bandcamp and Reverbnation and Topspin and Patreon and Facebook and Twitter and a dozen other services to help them make a good living -- and part of that is that they rely on services like Spotify and Pandora to get recognition and to build a fanbase. Going "on strike" -- which is effectively what this is -- isn't particularly useful here. There are always other artists fans can listen to, or they're just going to go to unauthorized sources.

And, making Spotify pay even more upfront isn't very smart either. Given how much the company is already paying out, plenty of people are reasonably wondering if the company can even stay in business. How could it possibly make sense to demand more money from Spotify if it means that the company won't even be in business in the future. Then the artists get no money. Demanding more money than the company can recoup from its listeners is incredibly anti-fan and anti-musician, because you're only serving to stifle a useful platform.

Meanwhile, from everything we've seen, the claims that Spotify pays less than other sources is hogwash as well. We've now seen two studies that have both suggested that on a per listener basis, Spotify pays significantly more than almost every other incremental source of revenue that pays per play. Lots of people think that radio pays more, but what they forget is a single broadcast on radio may go out to hundreds of thousands, or sometimes over a million, people. Divide the per play amount down by that and we've heard estimates that Spotify pays nearly 10x in terms of both composer and performance royalties (outside the US, since in the US there are no performance royalties for revenue -- so there, Spotify pays infinitely more).

So, yes, this is a big PR stunt that tries to make Spotify look bad as something of a weak negotiating ploy for an artist who has made a tremendous amount of money under the old system. But to then claim that they're sticking up for new artists, while trying to effectively demand a change that will bankrupt one of the fans' favorite methods of finding new music? That makes no sense at all.

Filed Under: atoms for peace, money, music, music services, nigel godrich, obscurity, royalties, thom yorke
Companies: spotify