Spotify Makes a New Offer to Musicians

Spotify is the way that most of us listen to music today. We appreciate that this statement might not apply to you specifically – you might prefer Amazon Music, or Apple’s platform, or perhaps your own personal music collection – but Spotify is the single most popular music streaming platform in the world. In just fourteen years, it’s gone from an unknown Swedish start-up to global domination. Only one month ago, it hit a new high in terms of subscribers with 320 million confirmed monthly users, a little under half of whom pay a monthly subscription fee. If you’re a musician and you want your music to be as available to as wide an audience as possible, you need to be on Spotify.

Under any normal circumstances, musicians would be glad to have a platform through which their music could reach so many potential fans all over the world. Many artists, however, would argue that the ‘circumstances’ offered to them by Spotify aren’t normal. Each time someone streams a song on Spotify, the artist who created the song receives a small fraction of one cent in royalties. While record labels have agreed on revenue splits with the company and are presumably happy with what they receive in return, numerous musicians have spoken out about what they feel is persistent underpayment for many years. Such is the level of anger and concern about the meager amount of money that artists make from their Spotify streams that the British Government recently announced a probe into Spotify’s business practices. Artists and their fans have been calling for Spotify to present them with a ‘better deal’ for a long time, and this month Spotify has finally responded – but their offer probably isn’t what the artists were hoping for.

Aside from profit sharing, another bone of contention that musicians have with Spotify is how their music is promoted and who gets ‘shown’ their music as a recommendation. It is this issue, rather than the revenue issue that Spotify has chosen to address – and in the process, the company might have made the revenue issue even worse. The company has introduced a new ‘promotional push’ feature that enables artists and their labels to feature specific individual songs at the expense of all their others. An obvious time that they might want to do this is when they have a new single out, but it’s also possible to do it with an older song that’s ‘gone viral’ thanks to its use in an advertising campaign, as we’ve seen recently with the Carly Rae Jepsen song “I Really Like You” from 2015, which is back in the charts following its use in an often-played television commercial.

According to Charleton Lamb, who is the head of product marketing at Spotify, this new tool allows artists to ‘leverage’ their recordings at specific ‘moments’ in order to take the maximum advantage from them. He says the new feature will allow performers to take personal control over their success on the Spotify platform, and by extension, their careers. The problem with the initiative will lead to the artist making even less money from their music than they would if they didn’t choose to ‘feature’ any recordings at all. With the feature turned on, Spotify will push the selected songs harder in algorithm-generated ‘autoplay’ and ‘radio’ playlists to listeners who might be interested in hearing them. In return for this service, the artist will receive a lower rate of royalties for the promoted song. On paper, it sounds like a classic case of giving with one hand and taking with the other.

The reduced rate would only apply to the featured songs when they appear on radio or autoplay playlists. If a user chose to look up the song directly, the artist would receive their full royalty payment from the stream. Presumably, the hope is that artists will be willing to earn almost nothing from their featured song in the hope that users would then either playlist them directly or go looking for more music from the same artist, thus becoming a new fan of the performer. There might be merit in this, but it does nothing to solve the problem of artists believing that they’re paid too little by Spotify already. Both Apple Music and Amazon Music pay considerably more per stream than Spotify does, but Spotify – for now at least – has such a dominant share of the market that other platforms almost don’t matter.

The lack of revenue available through streaming has made for a bad year for musicians and performers, who have either had to cut tours short or not tour at all this year. Live performances have been bigger money-earners than music sales for the world’s best-known acts for several years because streaming revenue amounts to so little in most cases, and without the option to play live, small-to-medium-sized acts are struggling to continue with their chosen careers. That’s the reason why we’re seeing many musicians consider new money-making avenues for their music. Music-themed casino games have suddenly become particularly popular. A few years ago, only deceased artists like Jimi Hendrix and Elvis Presley appeared in games at online slots websites, where players can spin the reels while listening to a selection of some of the greatest hits of the legendary performers. More recently, we’ve seen still-living and still-performing musicians like Guns n’ Roses and KISS come forward to star in online slots of their own. We doubt that makes up for all of the lost revenue, and it’s not a route that would be available to lesser-known performers, but it’s a start.

Whether this new Spotify initiative proves to be popular with musicians or the labels who promote them remains to be seen. We can perhaps see the value in featuring a song by an up-and-coming artist in the hope that it will start to go viral and cross over to another platform like Tik Tok, but the better-known musicians of the world should have enough followers and plays for the same process to happen organically. To the casual observer, it seems like Spotify was asked to fix a specific problem and instead fixed a different problem that nobody else had even asked them to look at.