What’s all this about Spotify, again?

Well, Helienne Lindvall wrote an article in The Guardian yesterday, which reported that certain independent labels are withdrawing their music from Spotify. As you know already if you read this blog regularly, BlancoMusic have never knowingly had our music up there. We also took the decision over a year ago to withdraw our music from Last FM, MOG.com and Pandora. Funny thing was, that although the music had seemingly magically appeared on a number of streaming sites, we had no knowledge of how it got onto most of it. Now, before I go developing any conspiracy theories here, we work with a digital distributor for the sole reason that they get our music on sale in iTunes (a necessary evil). One of the services they offered was to put the music onto Last.fm. So that wasn’t a mystery. When we asked Last.fm to take down the music though, they informed us that they were unable to do so, as the music is put up there by users, and they have no control over people re-posting material they’ve taken down. So therefore, we can’t take it down from there. After a bit of dialogue with them, well, we had other things to do, and let the matter drop. MOG.com were another story altogether. Everything we released ended up on there, without anything resembling a request for permission. Our request to them to take the music off was met with the assertion that unless we approach them via a lawyer specialising in Californian law they would not enter into dialogue. That’s just to ASK them to take it down. Well, we have a lawyer, but not a Californian one, so again, we have no option but to comply with their rules. No doubt that somewhere in our contract with the digital distributor we use there is a clause saying that ‘your music may be distributed to other unnamed parties’ or suchlike. I could go on. Maybe you’re already beginning to discern the pattern. There are people out there who are profiting from musical material which belongs, in it’s compositional and performed forms, to BlancoMusic and our artists. They are doing so despite our requests to them to remove our music from their archives. What’s more, honest music lovers are paying for their services under the impression that they are paying for a legitimate, honest service which benefits the artists in question, and is a fair alternative to the cost of buying unlimited music or the moral and legal quagmire that is filesharing. That is the real tragedy here.

Lindvall’s piece quoted me, saying “The rates offered to us as an indie label were so insulting that we’d prefer to forgo the ‘privilege’.”

I replied in the comments thread thus:

Thanks for the quote Helienne.
I await the onslaught of ‘but of course BlancoMusic got offered a crappy rate, they’re nobodies’. The thing is, even though we haven’t made much mainstream impact with our material just yet, all the material on the label features Robin Taylor-Firth. That might not mean much to a lot of people, but as co-writer with Nightmares on Wax and Olive, the guy’s made a lot of money for the music industry. When you consider that Olive’s ‘You’re Not Alone’ got sampled by Tinchy Stryder in 2009, and was a hit for Mads Langer in 2010, and that NoW’s ‘Smokers Delight’ still shifts units that most indie labels would trade their right arms for, well, you’d expect that Spotify might channel some of their resources into even replying to e-mails from the guy. I’m not posting a truncated Taylor-Firth CV here to big BlancoMusic up (well, maybe a little), but just to highlight the blind arrogance of services such as Spotify, who feel no need to research, or negotiate, or even engage with content-providers who could be significant to them, were they to show even the tiniest interest in the music they acutally profit from (not that they are officially in profit, but we can be sure Daniel Ek’s not short of a quid).
More than anything though, the big question about Spotify, Mog, YouTube etc, is at what point does the ability to propagate your music via such channels stop being a useful publicity resource, and start being a detriment to the demand for your product? Artists are falling over themselves to take really crappy ‘deals’ for unlimited use of their music, under the hope that the exposure will be a compensation for the pitiful rates of payment. What they don’t seem to take into account is the supply/demand graph, and that merely increasing the supply of their product is not, on its own, likely to increase the demand. That’s a large part of BlancoMusic’s decision to make very little of our music available to the public before we’ve built a healthy demand via live performances. But the predominant reason is that we are not so desperate for publicity that we’ll consider insulting rates of payment for music that Spotify or others will use to make themselves exceedingly rich.

Lindvall’s article about Spotify’s payment rates wasn’t specifically about how insulting Spotify’s payment rate per play is. As far as I can tell from their website, it’s around 0.0085 pence per play, but I may have missed a zero somewhere in there. Rocio, lead singer of Mil i Maria (link to her music is up on the right of this text) was asking yesterday why we didn’t just go onto the streaming sites (she insists that she has seen her album on Spotify, despite our never having put it there) and click away mindlessly at the ‘play again’ button. Well, the answer is that at a hundredth or a thousandth or a penny per play, it wouldn’t even cover the electricity it costs to turn the computer on. Lindvall’s article was actually about a rumour that Spotify have a two (or more) tier system when it comes to payment. She mentioned the Scandanavian newspapers which had first sniffed out the story. Those original sources claimed that Spotify had been paying major label acts up to six times the rate that they pay to independent label acts. Keep the figure ‘six times’ in mind. It becomes important later.

Now, we already know that Spotify sweetened the deal for the major labels way back when it was starting out, by offering them a share in the company. Whilst the payment made to artists was insultingly low, the labels didn’t have to worry about that because they ‘d be getting a scoop of all those subscription fees and advertising revenues. Sod the artists. We also know that Merlin, an umbrella organisation representing the interests of independent labels, had meetings with Spotify early on in the game too. What they agreed on as regards company equity and per-stream rate, we don’t quite know. The truth is, we know very little about any of this stuff because it is all subject to something called a ‘Non-Disclosure Agreement’. With an NDA, all parties in a meeting agree that they will not share any details of what was discussed with anyone who was not present at the meeting.

Anyway, Spotify, upon hearing of Lindvall’s piece, retaliated almost instantly with their own statement. In it, they seize the ‘six times’ quote and cling to it with the grip of a drowning man hanging onto a swimming-float.

To suggest we pay major labels up to six times more than the indies is utterly false. Additionally the Guardian article refers to a series of dated and extremely speculative stories.

(http://www.techradar.com/news/internet/spotify-denies-reports-of-paltry-payments-to-indies-925440#form-wrap-commentform)

They then go on to spout more of their usual spin about how they pay millions to artists, and that we should all just shut up and be damned glad that we’re getting anything at all considering that there’s such a thing as FILESHARING, or didn’t you know, ungrateful pups, just don’t know they’re born etc, etc.

Now, everything about the pros and cons of streaming sites aside, what really bothers me about all this is the NDAs. Why hide behind NDAs Spotify? Why can’t we know exactly what you’re paying the majors, and how it is or isn’t different to what you’re paying the indies? Clearly it’s not six times as much. You made that quite clear. That seemed to have hit a nerve, and given you something to plausibly deny. Good work there, that put us right off the scent. We’re all convinced of your honesty now. So publish the figures, why don’t you?

Next. Merlin. What are they paying your representatives, Merlin? Where are those figures? Why are you hiding behind NDAs?

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8 Comments

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8 responses to “What’s all this about Spotify, again?

  1. Good god, we’re moving on from one decade of headache to another. I’d love to see a wikileaks style ‘music leaks’ site that has the chops to find and distribute these kind of secrets. Really hope your post gets good coverage.

  2. Thanks, me too. I’ll just go now and plug it on twitter for a bit.

  3. I enjoyed this post and I completely understand the frustration small labels face when it comes to attempting to control where our digital distributors place our music.

    We are in a different boat as a label. Our releases are mostlly art music (classical) and jazz. Our artists are not touring in the EU, and our physical product is not easily available.

    We look at Spotify and similar companies (Last FM, Rhapsody) as being similar to getting radio play. An opportunity for our releases to be heard. Since our releases became available on Spotify, our digital sales (iTunes) in the EU have more than doubled and search requests and site traffic from EU increased significantly. We are not really concerned too much with rates paid by by streaming services, we are interested in activity and stream requests. In the US where physical product is fairly well distributed we see a smaller correlation between streaming activity and physical sales.

    The nature of demand in the music industry has changed. The best deal for our artists is still to sell product when they do perform live (which we whish they would do a lot more of, but that is a different discussion) I am not necessarily a champion of Spotify etc. But we did opt in and for us, in our situation it has so far worked out.

    • As you point out, the benefits are different as the situation changes. Jazz and classical fans are, in my experience, a lot more unwilling to turn their backs on physical media. CDs and vinyl appeal more to that fanbase than to a pop or rock audience, and so streaming really could be argued as a precursor to actual sales. That said, I talked to classical pianist Paul Lewis a couple of years ago, who told me that his revenue from sales of recordings had dropped to an insignificant point, despite his growing popularity as an artist. It’s not 100% predictable. Which is really the point I want to make. Blogging, facebook, twitter et al, tend to corral the writer into extreme stances. Not so much because of the restricted character-count, but because of that ever-present knowledge that if you don’t write something at least a little bit sensational, no-one will bother reading, re-tweeting, sharing etc. So I come on here with a big rant about Spotify, completely polarised views, writing as if there were no nuances or complications to the whole issue, whilst I know, and you know, that there are circumstances in which streaming could be used, and viewed, that would be applicable to different marketing strategies or acts.
      The truth of the matter is that I shouldn’t have written the section about distributors and the difficulties of getting material taken down. That confused my post a bit, because my real intention in writing it was to draw attention to the NDAs, and the possibility that Spotify are paying different rates to different rightsholders. It may all be innocent, and nothing dodgy is going on. If so, I’d really like that information to be public.

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  5. Grae2x5

    Speaking from experience, when you upload music to Last.fm you have to do so through a Music Manager’s account. And, in the case of covers/unowned material, you have to prove you own the rights or credit the original artists so they can be reimbursed.

  6. Ictus75

    Well, it’s really a matter of exchanging one crook (the major labels) for another (Spotify). There’s a definite problem when a service won’t remove music tracks when requested to by the legal owner of those tracks.

    As for what they do pay artists, it’s an insult, whether you are on a major or indie label. Even if the majors get “six times” the rate of indies, there’s still not much money to count at the end of the day. It’s an artistic rip off under the guise of being a “legal” service because the major labels sold the artists out in order to line their own pockets with ca$h. NDA’s are nothing more than a way to hide shady deals & practices. If Spotifail, err, Spotify were so above board, they’d spill the details on what everybody gets…

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