this post was submitted on 17 Dec 2023

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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 11 months ago by 4realz@lemmy.world to c/technology@lemmy.world

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[–] MossyFeathers@pawb.social 0 points 11 months ago (2 children)

Man, a lot of people here don't understand how the music industry works. From the perspective of someone who's been loosely following the music industry, what I've learned is that it doesn't matter if Spotify gave up 2/3rds of their revenue, or 100% of it, the artists would still make fuck all.

Why?

The labels love taking their cuts and as a result, artists make very little. Instead of taking the blame for giving artists a <10% cut of the label's revenue from their music (my understanding is that it's pretty common for musicians to get <10%, sometimes <5% if you're on a particularly shitty label), the labels are blaming platforms like Spotify.

Now, I'm not saying that Spotify is blameless, however I think there's a lot of misdirection from the labels going on. I don't remember anyone complaining about pre-spotify services like Pandora Radio for not paying out enough when they were largely ad-supported, which is another reason I'm not totally buying the, "it's cause it's free" argument either.

Fuck, remember Pandora?

[–] spacebirb@lemmy.world 0 points 11 months ago (1 children)

Labels are an outdated concept that needs to die. Now that you can find any music from just a quick search artists shouldn't have to rely on them, at least not as heavily, for advertising.

[–] Alexstarfire@lemmy.world 0 points 11 months ago (1 children)

Ehh, you've got a different but similar problem these days. Before, it was hard to get the word out so even finding new bands was difficult. Now, there are so many artists that you've got to find a way to stand out. Still need marketing. That's what labels provide.

[–] Plopp@lemmy.world 0 points 11 months ago (1 children)

You don't need to give up the rights to your music to a third party for them to do marketing or handling legal matters for you. You just need to pay them for their services. And you should be able to choose from several competitors in the market, based on what they offer and what you want/need/can afford. So yeah, record labels shouldn't exist anymore.

[–] AAA@feddit.de 0 points 11 months ago

Haha. Yeah. The countless small artists with their marketing and legal budget. Why oh why aren't they just using their own money?

[–] rainynight65@feddit.de 0 points 11 months ago

I know all those things. And yet I just can't find it in myself to have sympathy for a company that pays 200 million to Joe Rogan.

[–] Nighed@sffa.community 0 points 11 months ago* (last edited 11 months ago) (1 children)

This is why I thought some of their recent actions that hurt the lowest played artists was strange, you want to encourage artists to NOT use the big publishers to help break their triopoly.

I think the most recent changes are fine in practice, but the optics are not great which probably matters a lot.

[–] Mahlzeit@feddit.de 0 points 11 months ago

From the article:

However, the problem for Spotify is that the record labels anticipated this move and prevented Spotify from ever owning music content and competing with them.

They included terms in their licensing contracts with Spotify that forbid Spotify from owning content and streaming it exclusively on its platform.

These contracts make it extremely difficult for Spotify to own songs without violating the terms given by the record labels, which could result in expensive penalties and even legal actions against them.

Spotify is dominated by The Big Three and Merlin (an organization representing independent labels), who own over 75% of the streamed music, giving them too much power.

This was why when Spotify tried to license music directly from artists in 2018, bypassing the record labels, it was sued, forcing Spotify to stop within months.

[–] Mahlzeit@feddit.de 0 points 11 months ago

Everyone talking about these poor artists. Taylor Swift received 100 million USD in 2023. She has just become the first billionaire musician. How many more billionaires should we have?

Ok, maybe that's beside the point. We're talking about the actual poor artists.

So, Spotify fires most of its staff. I'm sure they'll find better jobs. Now it can pay almost 50% more - all its revenue - to right's holders. Taylor Swift gets 50 million more; still much less than she deserves, I'm sure. And - trickle down FTW - artists who make $15k (US minimum wage) now get $22.5k. Yay!

But wait. Artists who received $10k now receive $15k; more minimum wage earners struggling to scrape by, Now what?

[–] echo64@lemmy.world 0 points 11 months ago* (last edited 11 months ago) (1 children)

Ugh, yes poor poor spotify, fuck that. Artists can't even make a living making music anymore thanks to spotify. Fuck off blaming artists for trying to get paid. Fuck this article. Oh no it only gets a third of the revenue?! Abhorrent, no it should get ALL the revenue, for doing what, having a server with music on it. Amazing. Fuck spotify.

[–] homoludens@feddit.de 0 points 11 months ago* (last edited 11 months ago)

I mean, an oligopoly of three corporations is definitely a problem. So you could make an interesting article about that.

But instead they use terms like "rights holders" and "music suppliers" that mix up corporations and artists and everyone in between - while ignoring problems like "rights holders" not necessarily being the artists, ludicrous copyright laws (just because someone wrote a nice song 60 years ago does not mean "the rights holder" should still be able to profit off it) etc.

And they write bullshit like "For a company that has revolutionized the music industry". What did revolutionize the industry were technologies like MP3 and "the internet" in general, and Spotify did not invent that. They just were the first to get a business deal with the Big Three - I suspect because they offered them more favorable terms than other startups. If those terms don't allow them to make money, then maybe that's not a sustainable business model?