Who Are They Fooling?

So, after years of waiting, Spotify is here in the U.S. What does this mean for artists? Already the contradictions have started. Sean Parker, who is on Spotify’s board, is giddy over the fact that the service will enable “music to be shared freely across the world -- all the while empowering artists to reap the economic benefits of selling their music". ¹ Am I the only one that sees the contradiction in this statement? There is no income from shared music.

As we all know, when the milk is free, you don’t buy the cow. The idea that a Spotify user, especially one that is paying $9.99 to be on the top of Spoitfy’s three tiered system, will go out and buy music they already have access to is absurd on its face.

Parker, who was an early employee of Napster, back when it was a file stealing service that was sued by several top artists, producers and labels eventually went bankrupt in 2002, ² goes on to claim that Spotify in the U.S. will reverse the decade long “downward trend” in music sales and there will be a “return to growth” for the music business. And how is this going to happen? “Spotify is removing the barriers to sharing[sic] music with friends” Parker wrote on his Facebook page. Again, where is the income for artists regarding shared music?

Let's be honest here. The only one that is going to make any real money from Spotify...is Spotify. Either through ad revenue, from the free tier of their three tiered "freemium" set up, (which in their European version has 6 million users), or through paid subscriptions, (which in Europe has 1 million users). ³ As for serious, living wage, payments to artists, don't hold your breath. Remember this is the company that paid Lady Gaga $167.00 for a million streams of her hit song Poker Face. ⁴

As shown in an earlier post an artist needs to have 70,139 songs streamed per month on Napster to pay the rhetorical rent of $1,300 a month. On Rhapsody they would need 142,857 streams. The Lady Gaga story bleakly illustrates how Spotify is known for smaller payments for artists than other streaming sites, so the assumption is that the number of streams needed to make a living will be even higher through them. Of course given the absurd number of streams need to make any serious, living wage, income from any streaming service, Spotify is just another dead end for working musicians and bands.

If you are a DIY artist and you think you are going to get rich, much less pay your rent, through payments from Spotify, think again.

Seriously, who are they fooling? From the buzz, it would seem like a lot of folks...




1. http://latimesblogs.latimes.com/technology/2011/07/spotify-launches-now-playing-in-the-us.html

2. http://abcnews.go.com/Technology/story?id=119627&page=1

3. http://www.guardian.co.uk/technology/2011/mar/08/spotify-hits-1-million-paying-subscribers

4. http://www.guardian.co.uk/music/2010/apr/18/sam-leith-downloading-money-spotify