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The Financial Express

Spotify: Good for music as a company?

| Updated: September 19, 2022 18:30:13


Spotify: Good for music as a company?

Standing in lines to buy a music album was a familiar scene in the '80s, '90s, and even in the early 2000s. International artists sell a substantial number of physical albums, vinyl, when they release a record, even today. But in Bangladesh, it is a story of the past. Those days are over. People now stream their music online on different platforms. Spotify is one of them.

Streaming services are the new reality

The importance of streaming services nowadays is inevitable. As Aldnane Alam from the band Arbovirus uttered while talking with the writer, "Services like Spotify are essential. Now that most people don't even have cd/cassette/record players and seem dependent on mobile phones, streaming services are the answer." 

Gutslit is an Indian death metal band. They are now touring in Europe. Gurdip is a member of the band. He has similar thoughts. "Streaming platforms have been a game changer in getting music out to every corner of the world. Be it free or paid, these platforms have helped bands reach a greater audience and play."

However, the guitarist of the German-Bangladeshi death metal band 'KHNVM,' Showmik Das, differs slightly from others. 

"Well, I am not a big fan of streaming platforms, but the human attention span has shortened in the age of technology. So, if you have a platform where the audience thinks they are paying for the songs they are listening to, it will thrive. Spotify is important for certain genres with certain age groups."

Spotyfy’s problematic revenue sharing model

Even though musicians see the importance of streaming, when it comes to some other points, they have complaints against Spotify. It is a music streaming service where listeners subscribe for a certain amount of money and can listen to their favourite artists. Of course, listeners can stream free too. But they have to listen to or watch an advertisement for that. Spotify has over 350 million users and 150 million subscribers, making it the biggest music streaming platform in the world. It offers digital copyright-restricted recorded music and podcast. 

Nevertheless, when it comes to royalty, Spotify is not the best. In fact, the royalty-sharing model of Spotify is not up to the mark for an artist. Musicians have complained about Spotify's revenue-sharing model for a long time. 

Spotify pays the artists monthly, where artists get as low as $0.0023 per stream. Musicians around the world started raising their voices against this.

'The Pocket Gods' is an American band. Their frontman Mark Christopher Lee is annoyed by this royalty-sharing model. While talking with the writer, he said-

"I'd like to sit down with Daniel Ek to put more resources into their music catalogue and less on podcasts. They spend USD 100 million on a Joe Rogan (Podcaster), and since then, my royalty rate decreased from $0.0082 to $.0023."

Aldnane expressed the same feeling when asked about the revenue-sharing model.

"No, their revenue sharing model is not ideal, but it can, and it should be much better."

"It's a corporate trap where the platform owners make more money than the artists who've made the music. Like Uber, Airbnb, or Amazon, the websites or web stores make more than the taxi driver, hotel or product seller. It's unfair," said Gurdip.

It is often heard that Spotify doesn't have enough funds to pay the artist more. That's a problematic statement. Recently Spotify sponsored F.C. Barcelona for USD 300 million. Spotify's Daniel Ek was also interested in buying the football club Arsenal. In 2019 alone, the company made USD 7.58 billion in net worth. They are not interested in paying the artists from whom they make the revenue. 

Niche genres dying

There are other boundaries for musicians, too, on this platform. If a user doesn't play a song for thirty seconds, that stream doesn't count and won't pay the artist. This model is hampering genres other than pop, where artists present themselves differently, like rock, heavy metal, etc. 

The heavy metal band Dream Theatre has songs longer than twenty-six minutes. Many artists like their songs to start slowly and make them long. But Spotify is not thinking about them. Young artists also believe if they make an eight-minute song, they will get paid the same as a three-minute song. Then why would they invest extra effort and time?

The Pocket Gods rebelled against these issues in an interesting way. They decided to make a thousand songs album where each song would be thirty seconds long. And the album's first song is - 'Nobody makes money anymore.'

While talking with the writer, Mark from 'The Pocket Gods' said-

"Their revenue model is so complicated. Spotify gets money from subscriptions and advertisements, and they claim somehow, it's allocated out to artists. They pay a royalty once a track reaches 30 seconds. So, I thought, why write longer songs? Why not give them 30 seconds songs and maximize our royalty return."

Affirming the strength of the platform, Mark added, "I just think Spotify needs to evolve to respect the artists more."

Respecting the art, respecting the artist

There are some other platforms like iTunes, Deezer, and Bandcamp for streaming. Showmik prefers Bandcamp more than Spotify. He clarifies, "Obviously, I prefer Bandcamp to Spotify. Spotify is still a streaming service, whereas Bandcamp comes with a complete package. You can sell your music individually and your C.D.s, merchandise, etc., which gives you more flexibility as an artist. The audience can also leave their review on Bandcamp, a good edition for showcasing the support."  

Even though artists have complained against Spotify, they have expectations from the platform.

"I expect they will redesign their revenue model; maybe they can develop a model that matches the taxation system in some countries. They can give out more to artists who have a niche audience group so that they can survive. And after a certain number of streaming, the pay per view can be limited so that they can keep some profit for themselves."

"It's the devil we cannot do without," Gurdip concluded. 

In this age of digitalization, services like Spotify cannot be denied. But rather than sponsoring a club for 300 million, they first need to look out for the artists and give them the proper respect and earnings they deserve. 

Spotify launched in Bangladesh last year. Artists are gradually moving to the platform. It's everyone's expectation from such a service that it will be a service where musicians will thrive.

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