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Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders. (open.substack.com)

submitted 9 months ago by [email protected] to c/[email protected]

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[–] [email protected] -2 points 9 months ago (4 children)

Wooh. 👀. This isn't Spotify's fault. They can't pay artists if they don't have money.

[–] [email protected] 8 points 9 months ago (1 children)

To be fair- Spotify priced the service that doesn't make enough profit to pay artists adequately.

[–] [email protected] 12 points 9 months ago

Like the article explains, they can't price their services too expensively, because of competition. If Spotify becomes $25/month, most users will move to Apple Music or YouTube Music, etc.

[–] [email protected] 5 points 9 months ago

Is that your blog or whatever you keep posting?

[–] [email protected] 1 points 9 months ago (1 children)

Yes, it is. It's entirely spotifies making. It's the situation spotify has created. And the answer is absolutely not 'starve artists even more than we do today'.

[–] [email protected] 0 points 9 months ago

Okay, lets say I accept the thesis that Spotify is directly to blame for the demise of physical media and the rise of streaming. In the current moment, what is Spotify supposed to do that would satisfy you?

For every dollar I pay to Spotify for their music service, Spotify sees 33 cents of it. Much of that goes to running the service that people want access to. The label takes the other 67 cents. They pass about 2 cents of it on to the artists.

Let's go full fantasyland, say Spotify cuts their own take entirely and somehow subsidizes the entire thing. The label is now making the full dollar, a full 150% of what they were making before. Well, is that better for artists? 150% of what they were making before is 3 cents on the dollar. Is that a solution? No, it's barely a difference.

Let's say Spotify triples sub prices so they can take only 10% for infrastructure. Most of their current subscribers won't pay that, but let's just pretend. Is 5.3 times what the artists were making before an acceptable amount? Six cents on the dollar? Weird Al would've made $60 off Spotify this year instead of $12. Is that satisfactory? Because that's literally the most Spotify can do, even theoretically.

Spotify can't solve the problem.

The problem is labels locking artists into contracts where the label gets to keep 90% or more of everything they make. Spotify has no say in that.

Conversely, if we go back to the current split, but have the labels share their cut with the artists 50/50, the artists are suddenly making 1650% what they were before. Snoop'd be taking almost a million dollars for his billion streams. These contracts made some shred of sense in the physical era, when you needed to own a studio and audio engineers and marketers and media factories to push and print a band, but even back then they were widely known to be exploitative. Nowadays, when any tiny town has a studio for rent and anyone can edit a killer track in their bedroom and go viral on social media? They're a fucking joke.

The villain in this scenario is blindingly obvious, and anyone who believes otherwise is either a plant or a useful idiot.