Spotify completely redefined the music industry when it introduced its unlimited music streaming model over 10 years ago. And while "streaming content" in general felt like an inevitability since Netflix pivoted from mailing DVDs to hosting movies online, the fact that Spotify got to it first with music streaming means the company comes under extra scrutiny.
While Spotify is no stranger to contentious debates about how it pays artists or whether people are trying to "rig" the system, the latest debate around Spotify hits different. And it's causing a lot of small artists to take a long look at their relationship with the platform.
Recently, RootNote co-founder Jeremy Burchard was interviewed by The Guardian regarding his thoughts on the matter. You can read that article here.
We wanted to go just a bit deeper into the situation, specifically from the lens of smaller artists. Hopefully, if you're currently going back and forth about this subject, this article might provide some additional insight or inspire you to look at the conversation from a different lens.
The Impetus For The Latest Spotify Conversation
If you don't know by now, Neil Young and his record label pulled his catalog from Spotify. Young published an open letter implying he wanted the company to take responsibility for misinformation shared on the massively popular Joe Rogan Experience podcast. Spotify paid $100 million to have the exclusive rights to publish the podcast.
This wasn't the first time somebody petitioned Spotify to take down content with misinformation. Earlier this year, 270 doctors signed a letter to the company asking for a clear policy and accountability around content spreading harmful lies about COVID and COVID vaccines. In fact, Young initially attributed that letter with his decision to remove his content from Spotify.
After Young made the move, several other artists and podcasters either pulled their content from the platform or pledged to stop publishing podcasts until Spotify put a policy in place. These include Joni Mitchell, India.Arie, Graham Nash, Nils Lofgren, podcaster Brené Brown, Roxane Gay, Mary Trump, and more.
Where The Conversation Is At Now
As it normally does when it comes to Spotify, the initial conversation (about Spotify's responsibility as a publisher of exclusive content) turned into many different conversations at once. Max Collins of rock band Eve 6 seized the moment to again shine a light on what he says are predatory practices by not just Spotify, but former label Sony and many other facets of the industry.
stealing music is far more ethical than using spotify. you have our full permission to torrent the heart in a blender song— nigh eve6 (@Eve6) February 3, 2022
Comedian and television host Jon Stewart said that people should seek to engage in conversations about misinformation rather than protest platforms that publish them, while also taking aim at the algorithms that spread content regardless of its accuracy.
A lot of fans took to social media to ask artists with significant stature to also pull their catalogs from Spotify, going so far as to spread baseless rumors and seemingly not understanding whether these artists even had the power to do so based on their label contracts.
But most critically for the point of this article, the conversation simply came down to two things:
1) As a smaller artist or manager working with smaller artists, can I/we even afford to leave Spotify?
2) What are the other ways fans can support artists if a fan decides to leave Spotify?
Clearing Up The Money Conversation
This isn't the first time we've talked about the money artists make from Spotify, and it certainly won't be the last. There's no way to please all parties when talking about Spotify's financial impact, but we'll try to do it as fairly and succinctly as possible.
1) Spotify and music streaming as a whole have been financially positive for people who own the rights to music, especially the masters rights. Before streaming, music was in a dire place. CDs were declining in popularity and mp3 downloads weren't really picking up the slack. As a whole, the music streaming model has reinvigorated the recorded music side of the industry and grown revenues substantially.
2) A lot of artists who used to have major label deals have been left out of the boom, though, since they don't own the rights to their masters. This means big labels are seeing big boosts from old content and old contracts. Similarly, songwriters and publishers haven't seen nearly as much money from streaming as the people who own the masters. Conversely, there are more new artists than ever before as the barrier to entry is very low.
3) The amount of money that Spotify pays an artist per stream differs, but is generally very low. In many cases, it is lower than other platforms like Apple Music, Amazon Music, TIDAL, Napster, Deezer, and more.
4) In order to reach a sustainable income from music streaming, an artist needs to do a very high volume of streams. The U.S. poverty line averages at around $12,880 per year. For a single artist who owns 100% of their masters and makes $.0035 per stream from Spotify, they would need 3,680,000 streams per year, or 306,667 streams per month to be at the poverty line. That's the equivalent of about 25,555 consumptions of a 12-song album per month. Conversely, somebody selling an album for $10 and profiting $8 per unit needs to sell 1,610 albums per year or 135 per month to hit poverty line.
5) In the above example, the argument for Spotify of course would be that the platform is a "discovery engine" that works to send your music out to more people who might like it, while if you're selling CDs you have to go find those customers yourself (and make them repeat customers). This is one of the main points we'll look at in the next section talking about why smaller artists struggle in the Spotify conversation.
Why Small Artists Struggle With Spotify
The music industry has always ebbed and flowed with trends. Every new piece of technology, from record players to mp3 players, required a new pivot to meet needs. But absolutely nothing disrupted the music industry like streaming. All at once, the creation, distribution, promotion, consumption of, and compensation for, music changed.
Certainly within the past five years at least, that means artists big and small have had to change significant portions of their strategies when it comes to their music careers. For larger artists with a team, there are still plenty of fallback revenue options like touring and merch to make weathering the streaming storm less immediately dire.
For new artists working to get their music heard, well, they've had no choice but to try to bend everything they thought they knew about the music industry to the whims of a new model. Everything from lengths of songs, subjects of songs, when they release songs, how many they release, if they work on an album — all of it. More than ever, the music is simply an entry point to trying to get people to care about the artist as a whole.
We know this is a contentious subject, and we might get flak for saying it, but if your goal is to make a living off songs you write and perform, you really can't "just be an artist" anymore. You (or somebody you work with) have to be a content creator and approach it from multiple sides. Successful artists emerging in today's industry are overwhelmingly content creators, not "just" artists.
Perhaps the most difficult issue facing smaller artists is that the larger machinations of the music industry have accepted Spotify as a measuring stick for value and potential. Similar to how labels were signing artists based on Facebook page likes in 2010, many segments of the industry look at Spotify streaming numbers as a critical component, whether it's a booking agent, manager, label, or a brand partner.
So if you're already fighting the uphill battle of trying to build value and grow your team, there's a very real belief that removing your music from Spotify may remove you from the conversation altogether. This is particularly unfortunate given we know just how many artists build loyal followings and create important content that doesn't spark high-volume numbers on Spotify.
Plenty of artists simply do not have the sway to convince listeners to move to other platforms if they remove their music. And they also can't afford to lose out on the revenue they're making from Spotify — even if it doesn't cover the utilities, let alone the rent.
The Spotify Marketing Conundrum
Ten years ago, the phrase "editorial playlist" was on nary a musician's tongue. Five years ago, editorial playlists were the supposed "key to success" in the industry. Nowadays? Sure, they're important to people, but most artists and managers will tell you they drive far fewer engaged listeners than, say, algorithmic playlists.
The idea that managers and artists are always talking about algorithms now is just the next evolution in the marketing merry-go-round that has sprouted out of streaming. Not that long ago, people literally invented a "pre-save" to try and "trick the algorithm" into thinking they had a viral hit on their hands so humans and robots alike would take notice.
A whole new era of Instagram swipe up ads and TikTok campaigns took hold just to try and drive engagement on streaming platforms to give songs a signal boost and reach the necessary volume to drive growth and revenue. For a lot of artists, this is the only music industry they've ever known.
Suddenly dropping off of Spotify would quite literally leave a lot of younger artists scratching their heads on what to do instead. (Hint: start with an email list).
It's The Hope That Kills You (Shout Out Ted Lasso)
There's a great episode of Ted Lasso that revolves around this quote: "It's the hope that kills you." It's a pretty brutal suggestion, and one that Ted takes issue with in the episode.
But the idea is that having "hope" that you could win is actually a fate worse than just continually losing. And while the odds of having a track go viral or getting picked up for a huge editorial placement are incredibly low, holding out *hope* for them isn't necessarily a bad thing.
But what "kills you" in this instance is constantly releasing music and making social media posts hoping that it will be enough to eventually attract millions of people to your music and make it a sustainable business. No matter how good your music is, it's a crap shoot.
But it's that very hope that it could happen that keeps a lot of smaller artists on the platform. The belief that true fans will probably buy your stuff in addition to streaming your music. And that makes it really difficult to remove yourself from the potential to grow on a platform, even if you have a hard time reconciling the economics, ethics, or business practices.
So What Can Smaller Artists Do?
Ultimately, every artist needs to make the choice for themselves when it comes to how they approach Spotify. The app is responsible for plenty of artists breaking through and in spite of everything else going on, people do love finding new musicians on Spotify.
But you don't have to feel compelled to drive fans there or ask them to support you specifically on that platform. You don't have to even let people know they can find you there. If you make good music and good supplemental content on other platforms, people will find their way to your music wherever they listen to music.
People are ultimately going to find you where they find you. If you create a fan club or merch store (or at the very least an email list) and people decide they don't want to support you there, it doesn't mean they're also going to stop supporting you on streaming platforms. Be where you love to be the most.
If you know you won't take your music off Spotify but you want to do something, just focus on driving people to the channels you control. Send fans to your website instead of Spotify. Ask them to share your YouTube video instead of "pre-save" a song. Allow yourself to exist on Spotify, but thrive on platforms you truly enjoy being part of.
Most of all, just have an open conversation with your fans. Let them know you appreciate however they choose to listen to you, but that there are other ways to support you if they're also feeling a little down about Spotify (and streaming economics in general).
It's possible for smaller artists to make streaming work for them, but they need to focus less on trying to make themselves work for streaming.