Under frequent criticism for exploiting artists, Spotify has launched a new website called Loud & Clear to better explain how it pays musicians – or in fact, how it doesn’t, not directly anyway.
Spotify founder and CEO Daniel Ek said the website is intended to “increase transparency and shed light on the complicated economics of music streaming.”
He claimed that, last year alone, Spotify paid over US$5 billion (~RM20.5 billion) in royalties and makes up about 20% of global recorded music industry revenue – more than any other streaming service.
Where does all that money go?
The website and nifty accompanying video makes it very clear that Spotify doesn’t hand money directly to artists, but rather to rights holders like record labels, distributors, aggregators, and collecting societies.
Spotify explained that it makes agreements with those right holders and pays them roughly two-thirds of the revenue it gets from subscriptions and advertising. Then the right holders will pay artists according to their contracts.
It sure looks like Spotify is saying, don’t blame us, go blame greedy record companies instead – an argument that has so far failed to convince many irate artists.
We asked for transparency, but this website answers none of our questions about the sources of Spotify's income in addition to subscriptions and ads, payola schemes for playlist and algorithm prioritization, or the terms of their contracts with major labels.
— United Musicians and Allied Workers (@UMAW_) March 18, 2021
On Monday, artists and other music workers protested at Spotify offices around the world under a campaign organised by the Union of Musicians and Allied Workers (UMAW), Pitchfork reported.
Spotify was recently in the news due to a brief licensing breakdown with Korean music distributor Kakao, which caused K-pop songs to be temporarily yanked from the platform. Whether that confirms the case made by Spotify or its critics is hard to say.