Spotify Was Always Best Buy In Disguise
The 1,000 play minimum is just the latest reminder.
At the beginning of this week, it was confirmed that Spotify will stop paying royalties for songs that receive less than 1,000 streams annually. As with everything the mega-streamer does, the new plan was treated with praise and scorn. Pundits from the former camp are excited to see Spotify begin the long process of removing loooooong tail music from the payment pool before it gets much looooooooooooonger thanks to AI. Meanwhile, the anti-Spotify clique pointed out that a minimum would merely be made up by more fake streams while devaluing the catalogs of legitimate artists whose individual songs might not make for much money, but, in total, can still add up.
Regardless of which argument one is amenable to, the changes seem unlikely to affect the tax bracket of most active artists. But it is another reminder of a two-tiered system that has long been a part of the music economy. Take, for example, the news that nearly one in 15 vinyl LPs sold in 2023 were by Taylor Swift. Or the fact that MSG’s 3% YoY decline in revenue can largely be attributed to the lack of Harry Styles concerts at the legendary venue. Or that Luke Combs covering “Fast Car” lead to Tracy Chapman becoming the first black songwriter to win CMA’s Song of the Year Award — 35 years after she wrote the tune.
As much as at any other time in history, the music biz seems dominated by a few major stars, even while the major labels lose market share in the $41.5B recorded music market. Many have assumed, perhaps not incorrectly, that the changes in streaming payouts on platforms like Spotify and Deezer are intended to shore up the Big Three’s hold on streaming dollars. The idea being that no one will get too mad if millions of unknown artists lose pennies so that mainstream acts can have a few more pounds.
If that’s true, then it is just another reminder that Spotify — and all the big DSPs built in its image — were primarily created by and for the big record labels. Whatever benefits came from democratizing music distribution while expanding access to exponentially larger global markets over the past 15 years are secondary effects.
Responding to Spotify’s latest news, MIDiA Research referred to a forking of music between artists supported by labels in the streaming ecosystem and the artist-direct musicians who will mainly be the ones to lose out. But this shouldn’t be news.
Back in the (disputedly) better era of physical music, artists understood this two-tier system and adapted to it accordingly. In the 1990s, you had a fairly clear division between artists whose music thrived well in Best Buy and the ones who sustained in indie record stores. The solution today is the same as it was then.
Spotify was always Best Buy. Most were fooled into thinking that its endless shelves meant opportunity for everyone, but ask any merchandiser, and they’ll tell you that the larger a store gets, the more critical the endcap displays become. So rather than continuing to fight over opportunities for playlisting (the endcap of the streaming era), any artist who can muster even a modest fan base will be better off forgetting about Sam Goody Spotify and focusing on smaller stores platforms.
MIDiA head Mark Mullen said as much in a recent essay, Why artist subscriptions are the perfect partner to two-tier licensing. We agree and encourage anyone reading this who is affected by the new Spotify policy to consider if DSPs are even worthy of their focus in 2023. Or if alternative modes of monetization can offer better results for similar efforts.
TAKEAWAYS
Salient statements from this week’s music news.
1. Is Spotify’s 1,000-Stream Payment Threshold Legal?
Some call it “anti-competitive and discriminatory,” but there could be a more concrete reason why Spotify’s plan violates statues.
Takeaway: Although free-market negotiations guide the flexible rates and terms associated with the use of recordings, compositions, Price reiterated, are covered by the compulsory license. (Digital Music News)
2. Design Tool Canva Launches Its Commercial Music Library
500k songs from WMG, Merliln and others can now be added to your strictly non-commercial, totally just for fun personal designs.
Takeaway: The music can only be used for personal use, but not for commercial purposes. Brands and businesses wanting to use tracks for that will need sync licences, as usual. (Musically)
3. Wilco Now Have Their Own Font
A thousand death metal managers in charge of merch should be ashamed of themselves.
Takeaway: Sans serifs are among the most accessible and readable fonts, so good on them for that.
