Almost every independent recording artist we know has a story about a respectable number of streams on Spotify leading to a payout so insulting that outright theft would have been preferable. At least if the music was stolen, no one would have been paid. In Spotify’s case, someone is certainly getting paid: Their market capitalization is now more than $54 billion. But with song royalties at an estimated $0.00348 per stream, it’s not the working-class recording artist.
We say almost every artist has a story, because some have chosen to eschew the platform altogether on principle. But that comes with a price. Spotify is growing quickly, with 345 million active users, including 155 million paying subscribers. One hundred and thirty-eight million users have been added in the last two years alone. Not being there is a risk. Streaming is dominating the music industry, and if you’re not there, you may as well be invisible. And with 83 percent of all recorded music revenue in the United States now generated by streaming, you have little hope of making a living any other way.
What Spotify does is analogous to what Amazon does. The latter creates a marketplace sellers can’t afford not to use. Then it collects data about those third-party products that allows them to undersell and undercut, eventually putting them out of business. Spotify similarly collects vast amounts of data from its users, which it can use to direct them toward music that benefits their pay-to-play partners. In some cases, Spotify has even commissioned soundalike music to place on popular playlists, in order to avoid paying any royalties at all. The Union of Musicians and Allied Workers, with members across the country, is demanding transparency about Spotify’s uses of data, and a higher payment for all rights holders — a penny per stream. They want to know about Spotify’s sources of income beyond ads and subscriptions, such as payments for algorithm priority and playlist placement, as well as the terms of Spotify’s partnership deals with the major labels. But Spotify chooses to operate in darkness, scolding artists about not working hard enough and exploiting the workforce that creates the content it peddles.
The coronavirus pandemic has decimated the entertainment industry. Those who augment paltry streaming payments with live performances have found themselves unable to pay their rent. In the spring of 2020, some of the darkest days of COVID, Spotify added an optional “tip jar,” allowing fans to donate money to their favorite artists if they chose — essentially acknowledging that they don’t pay artists enough on their own. Insulting the dignity of musicians by turning them into digital buskers isn’t the right approach for a multibillion-dollar, multinational corporation.
The music industry has always been exploitive, but it’s never been this consolidated. Independent musicians have always been able to find their way to the means of production, distribution, and to their fans. Spotify has created a wall of opacity that puts all of this in jeopardy.
If Spotify is allowed to continue treating artists as it has been, the working class recording musician in the United States will cease to be able to earn a living. Congressional leaders concerned about worker exploitation, tech monopolies, and anti-competitive corporate behavior should be asking Spotify about their business model.
Damon Krukowski was a member of the Boston indie rock band Galaxie 500 and now records with Naomi Yang as Damon & Naomi. Joyce Linehan was policy chief for former Boston mayor Martin J. Walsh and co-owns Ashmont Records, an independent label based in Boston.