The Spotify Mystery: More Subscribers, More Problems

Those questions come at a time when Spotify is increasingly being criticized by musicians unable to tour via the service’s low per-stream payouts – around $ 0.0038 for the label and only a fraction, according to the new Union of of which for artists, musicians who recently launched a campaign called Justice at Spotify – and publishers and songwriters who are involved in a federal court battle over license fees. They’re not limited to the United States either: a UK parliamentary committee plans to hold hearings as early as December on how streaming services are paying off. “We need to examine how appropriate the economic model is,” says Kevin Brennan, a member of parliament serving on the digital, culture, media and sport selection committee. “My starting point is that it can’t be fair for the people who make music to report that they get such a small part of the proceeds.”

So far, Spotify has managed to fend off most of the creators’ criticisms: the creators popularized the monthly subscription business model that revitalized the music recording business, and it’s one of the biggest sources of income for rightsholders, making $ 1 billion per quarter paid year. However, the pandemic has made these issues more pressing and the Rogan controversy will bring new challenges. Even platforms like YouTube and Facebook are struggling to balance free speech (and the need for an audience) with a level of corporate responsibility, and Spotify may have a tougher time ahead. In response to the #MuteRKelly movement, the company said two years ago it would no longer include certain artists’ music on its playlists – and reversed the decision within a month. Now the company could find itself in a no-profit situation: Rogan’s fans have complained that Spotify did not upload past episodes with far-right guests Milo Yiannopoulos and Gavin McInnes.

This is not a music business problem, but it will give ammunition to industry critics. “It is hypocritical for Spotify employees to worry about the content of podcasts but remain silent about the company’s efforts to destroy songwriting,” he says David Israelite, President / CEO of the National Music Publishers’ Association. And as Google and Facebook have seen, PR headaches can lead to more severe migraines.

In the long run, Spotify may have to get used to being viewed less as a startup and more as one of the “ultimate capitalist monsters” like Google and Facebook Jim McDermott, a longtime major label manager who now acts as a digital marketing consultant for artists. “It’s about making a profit for your shareholders.”

This article originally appeared in the November 7, 2020 issue of Billboard.