I know that Iman has been praising the magic that is Spotify since its apparition in the US, … getting the music you want all the time and anywhere, I can definitively see why this is a very seducing idea. But let’s look at things from another perspective for a minute, from the indie labels’ perspective.
And let’s be direct, Spotify may be the death of Indie labels, the ones we care about, the ones which still put out interesting music; because we have to say it very loud, these labels don’t get shit from Spotify.
This is what Brian Brandt, the owner of the New York-based independent label Mode Records, wrote very recently:
‘On a typical CD sold through a distributor (yes, still the bulk of our sales are wholesale), we may make a profit of $3-4 a unit. Already that is not much considering the total sales of a typical niche CD. Sales through iTunes or similar service can yield a similar profit. But this all gets turned on its head with the Spotify model. For example, in June 2011, Mode had a total of 11,335 streams through Spotify; our income was a whopping $36.98! A big individual seller that month, by composer Luciano Berio, was streamed 1,326 times through Spotify; our income $4.18. So, we earn about 1/3 of a penny per stream. And these meager amounts should be split with the artists and composers.’
Can you believe it? The label gets a third of a penny per stream, split with the artists and composers,… which means nothing.
Last week, Spotify found itself under attack from indie labels, some of them wanting to take off their music from the streaming service. I actually talked to a friend who runs an Orange County-based indie label and he reacted the same way when he realized Spotify was streaming all his label’s catalogue! Last week, Century Media, a heavy metal and hardcore label group, pulled out of Spotify ‘to protect the interests of their artists’.
Ian MacKaye, Dischord Records label’s co-owner, recently talked to the Washington city paper about the problem, declaring that the royalties his label receives from Spotify are ‘negligible’. He added: ‘I assume there will be a point when [labels are] selling zero records. That’s fine. We started selling nothing.’ That’s fine? But tell me how they are going to survive? From t-shirts sales?
David Andler, the president and CEO of the Baltimore company Morphius Records, which does wholesale and digital distribution for hundreds of indie labels and artists, is also alarmed:
‘Quite frankly, it’s terrible,’ […] ‘I love new media and the immediacy of putting music into people’s hands, but the reality of the current culture is people’s psyches have been modified into thinking music is something you get for free. That perception is fallacious in that the artists have to make that music somehow.’
Spotify responded to this attack from indie labels a few days ago, declaring that ‘Spotify was launched out of a desire to develop a better, more convenient and legal alternative to music piracy’, targeting an audience whom was already downloading illegally, and saying that large amounts of money have been paid to labels, even advancing a $100 million figure paid to labels, publishers and artists.
However, labels and artists are not all equal, as big ones were able to negotiate a much better deal with Spotify than the small indie labels. According to the Guardian (and other papers), it is no more a secret, the big music labels have been shareholders in the Spotify company since 2008. In 2009, the Guardian said the majors received 18% of Spotify shares, and a Swedish news site even reported that labels got their stock almost for free: ‘Sony BMG, Universal Music, Warner Music, EMI and Merlin…bought at the time in to Spotify – for a pittance. They received 18 percent of the shares in Spotify barely 100 000 kronor, (about €10,000)’.
Thus, small independent labels and big labels are not playing in the same ballpark at all! If an artist is on a small label, he or she can forget about seeing any money from the streaming of his or her songs on Spotify. So isn’t it like stealing? Isn’t it basically similar to what sites like the Pirate Bay or other illegal downloading sites are doing?
I am guilty of this too, streaming or even downloading for free music everywhere on the internet has become such an easy commodity, but we should not consider that music is free. However, it is a little too late for this, if you register for a free Spotify account (you just have to tolerate a few ads), you have access to 15 million tracks (growing by approximately 10,000 tracks per day) for free!
The Swedish streaming service may have changed the way we consume music, but at what price?