According to one source [1], Spotify users stream on average 25 hours a month. Assuming an average song is 3 minutes [2], that's 500 streams per month. Going with the $9.99 per month rate, users pay about $0.02 per stream. Currently, the artists see only $0.0038 per stream, or less than 1/5th of what Spotify makes.

I think that with a 50% profit margin, Spotify should be very happy. Of course, it's not that easy / straightforward, all conditions and caveats apply, etc etc.

[1]: https://www.businessofapps.com/data/spotify-statistics/ [2]: https://www.music-jobs.com/uk/article/news/news-pop-songs-ar...

The other issue that has been raised a number of times is that I believe the revenue is still divided up based on overall listens across the platform, which means it's dominated by artists who feature heavily in popular playlists and automation-driver radio/recommendations.

These listens are often passive and should not be considered as valuable as those of someone listens only a few hours a month, but spends all of that time listening to specific artists (indie or otherwise).

Basically the argument is that if I spend $9.99 on a Spotify sub, the entirety of that cash (minus Spotify's cut) should be directed to the actual artists I listened to.

Here's an articulation of this perspective from 2014: https://medium.com/cuepoint/how-to-make-streaming-royalties-...

If there's two groups of people, one who listens to pop music for 10 hours a month and one who listens who indie artists for 20 hours a month (which could easily be the case if their recommended playlists are mostly indie artists as mine is), then switching to the model you propose would reduce how much money indie artists make, right?

It seems more fair to me that artists would get a set amount of money per stream, rather than the amount they get being dependent on how many other songs their listeners listened to.

I think the argument is not that it's the 10 vs 20 hour listeners, but rather the 10-40 hour listeners (workday) vs the 700 hour listeners (radio playing in the corner of a breakroom somewhere).

The 700 hour listener has no audience and no human curation, and yet it's got 10x the influence on who gets paid by Spotify.

The article I linked also makes a really good point about this model motivating artists to encourage listeners/fans to listen to whole albums rather than single songs— right now if you're playing Spotify for revenue, the only thing that matters is landing your songs on popular playlists where they will get hundreds of thousands of passive plays. The incentives there are not really aligned to what anyone wants long term out of music.

It’s not inherently clear to me that one play should be paid more than another play.

In fact, having a different fee per play dependent on the user is a pretty opaque and unclear metric. “How much are 1 million plays worth? It depends on your audience - if your listeners listen to lots of music you get paid less per play, and you will just have to trust us to compute an appropriate fee for you correctly.”

No matter how you cut these things there are pluses and minuses . You seem to think that Universal should get paid less for a single Katy Perry stream played from a global playlist compared to a small indie song streamed in a private playlist, and while that’s a valid opinion it’s not intrinsic or even self evident to me.

I don't think it would be that hard to show a small histogram which had your plays bucketed across different levels of commitment, engagement or some similar metric. Or instead of doing it that way, you'd bucket the users, so say "for song X, you had 30k unique users listen to it in the royalty time period, and here's a histogram of how engaged they were, with the left side being a small number of users who listened to it a lot or didn't listen to much else, and the right side being the large pool of users who heard it once and listened to many other things.

The reason this is good for artists is that it rewards them for what many want to be cultivating anyway: a relationship with enthusiastic fans, rather than faceless "plays" which could have come from anywhere.

In any case, obviously the conversation is DOA if you start it from a foundational assumption that "a play is a play", but if we acknowledge upfront that artist compensation has always been weird and often quite unfair (see radio royalties, for example— they sure as hell aren't getting compensated by how many people were tuned into a radio station playing their song), then there's room to discuss better options in a new medium that sits somewhere in between the old roles filled by FM radio and private collections of physical media.

> In any case, obviously the conversation is DOA if you start it from a foundational assumption that "a play is a play"

That's not my foundational assumption, but I've also not heard a compelling argument that one play / minute streamed should be inherently more valuable than another play / minute streamed.

It's also not clear how this value would be calculated, because I also don't think it's clear that proportion of listen time by user necessarily captures the difference in 'value' of one play against another.

It also feels like it will be very complex to negotiate with rights providers. Spotify's current negotiations with rights providers are really simple and easy to understand - we divvy up our revenue by play count, you are responsible for $x revenue by this metric, so let's negotiate the %. Moving all providers to another weird metric would be an extremely tough thing to do, particularly because having half on one and half on another would likely happen for a crossover, and would result in a loss of profit during the transition period.

I don't think it'll necessarily happen via Spotify renegotiating it. It'll happen via a competitor offering this scheme, and indie labels pulling their content from Spotify.

The obvious player to offer this competing service is Bandcamp. They haven't yet, though an awful lot of the pieces are in place— they have a mobile app that lets you trivially stream anything you've ever purchased and listen on trial to things you haven't, and it even has genre playlists and recommendations:

https://www.npr.org/2020/08/19/903547253/a-tale-of-two-ecosy...

It's tough, because indie labels will likely find it hard to both remain popular/relevant while pulling all their songs off the worlds most popular listening platforms.

It's a bit of a catch 22 - these platforms are now where people discover new bands, so if you are not on them people don't discover you so can't buy your album, and if you are on them then people can listen to your album without paying.

Unfortunately I think the truth is that in the future bands will have to think of slightly different monetisation strategies - maybe a mix of subscriber content (see Pomplamoose Patreon as the creators of this concept), fan engagement, merchandise, shows, premium albums that aren't on streaming platforms e.t.c. rather than pulling from Spotify & Apple Music entirely.

> I've also not heard a compelling argument that one play / minute streamed should be inherently more valuable than another play / minute streamed.

Here's a compelling irrefutable argument.

Let's start the discussion from a couple of scenarios. These scenarios are not the definitive and complete set of use-cases, but are enough to prove a point.

Scenario 1: User manually searches for a song and clicks play. Again the following day. Again and again for a couple of weeks/months. The user forgets about the song after that period.

Scenario 2: User creates a playlist and clicks play. Then uses that same playlist again, and again and again for years. Alterantive scenario: users searches for a published album/compilation and plays that playlist again and again for years.

Scenario 3: Streaming service generates a new generic infinite playlist every day, based on a biased algorithm that upvotes some artists and downvotes some other artists. E.g. Playlist called - Discover Daily/Weekly.

Scenario 4. Streaming service generates a new generic infinite playlist every day, but personalized to the users taste and interests, again based on a biased algorithm that upvotes some artists and downvotes some other artists. E.g. Playlist called - Recommended for you today.

Scenario 5. User hits random play and a truly random algorithm decides what will be played next, no matter of musical style, language, culture or any other aspect. Truly random, no biases whatsoever.

So I will argue why not all streams are equal or should not be treated equal.

The difference is the specificity of intent. Whether the user wished to listen to some specific song, or if the user was force-fed some song. For the initial discussion I am assuming force-feeding, later I will discuss alternative scenarios (clicking skip).

In scenario 1 and 2 there is intent from the user what should be streamed, and this means that the user is interested in the music to be streamed. It can not be refuted that the authors of that specific song should be paid for the stream.

In scenario 3 and 4, the user just wishes to have something making noise, not anything specific, but not random. This is fine, if the user is satisfied, but the problem is all algorithms have biases. If the algorithm favors the most popular authors, and the user could be satisfied with anything in the same style and tempo without preferences, than the streaming service is not fair to the authors who are less popular and never gives them a standing chance to compete. This creates a boosting effect so that the most popular become force-fed to the audience involuntarily and they become even more popular. This is a well-known side-effect in all platforms that use popularity as ranking or rating metric. So here, not all streams can be considered equal, since some had higher probability to be present in the playlist due to inherent algorithm biases.

Scenario 5 is the only scenario where the user is force-fed music, but in a manner that is irrefutably unbiased and irrefutably fair to all authors and songs. In such a scenario all get a chance and all such streams are equal. Unfortunately, users that would prefer such a scenario do not exist. Nobody would endure the torture of a truly random playlist for more than 3 songs.

So we have use cases where the users know what they want, and use-cases where the users don't know what they want, but know what they don't want and the streaming service tries to guess what it is that they want next, without truly knowing.

How do the streaming services know what a user does not want? By measuring the % of the stream that went through. If the user managed to suffer only <5 secs before clicking skip, then that stream should not be counted at all towards payment to the musician. If it was 60 secs than it's a different case. If the song went through entirely it's even better. If the user streamed the entire song, and was actively using the app during the whole time than it is an indicator that the user appreciates the song even more than if a passive encounter occurred.

So they try to guess what to play next. With a biased recommender algorithm that tries to recommend what would be a good fit to play next, and as I said the algorithm might favor some musicians over others.

This is a hard problem and is always discussed at research conferences, both by researchers from the streaming services, and by independent researchers. The topics of bias, randomness, satisfaction are always present. Some authors are even using personality traits to discover the type of music that should be streamed next, which is a very very deep breach in user privacy. I imagine that some services might consider eaves dropping on their customers to evaluate if there is true interest and appreciation of the served content - whether the customer is eating, dancing, smiling, chatting, ..., having sex, during the stream. To gather as much data as possible on what is the context, to offer a better aligned next song (if you are a paying customer) of better aligned ads (if you are a non-paying customer).

This is why all streams must not be treated equal, and the streaming services must find a way to be as fair as possible towards musicians (having in mind that no-one likes a random playlist).

As this is a hard problem, I suspect that more and more services will divert their research towards automatically generated music, so nobody will care if the algorigths are fair and if the authors are paid. Music is most susceptible to this, as it is easy to generate music that sounds good enough to a fairly large audience without realizing it is all auto-generated.

Advertisers pay for a radio and tv service, not users, right?

Don't compare Spotify against god, compare it to the alternative. Everyone has a "recommendation algorithm", it just doesn't have to be spotify's. It could be the radio, or what they see talked about in pop culture (e.g. WAP), or what their friends are listening to, etc. Spotify's algorithm has the potential to be radically more fair than any of the available alternatives. A fair algorithm is one that always shows people the songs they're most likely to appreciate, and the incentives are correctly aligned for Spotify to make a good effort to get as close as possible to that ideal (Spotify's top-tier "discover weekly" playlists are why I stick with it over any other platform). Music I listen to through the recommender is actually more valuable to me than music I picked out myself - if I only wanted to listen to music I already know about, I would just pirate it or buy it on itunes and save myself $10/month.

As an aside, I also disagree with "In scenario 3 and 4, the user just wishes to have something making noise, not anything specific, but not random". I don't just want something making noise, I want something making the kind of noise that I like to listen to, which includes a mix of old songs/artists and new ones I've never heard before.

> Here's a compelling irrefutable argument.

That argument isn't irrefutable at all - let's break it down.

> Scenario 1 & 2 it can't be refuted that artists should be paid for the stream.

Agreed.

> [Scenario 3 & 4] So here, not all streams can be considered equal, since some had higher probability to be present in the playlist due to inherent algorithm biases.

Disagree on the implication here - I don't see why it irrefutably follows that an artist should be paid less for these listens just because its in an automatic playlist (assigned because it matches the same profile as a record I previously liked). What you have here is an opinion, not an irrefutable argument.

My personal opinion is that if you have a streaming service, a minute paid for a minute listened is about as fair as a metric you can get.

Why are my listens, which are mainly from automatic playlists based on my historical listening, less valuable than someone else's listens, just because they listen to cool obscure bands not on the playlists?

Right, but artists don't care whether you're listening to their music actively or passively. Whether you stream 10-20 hours or 700 hours, 1 stream is 1 stream. I don't see why this should affect the payout

Doesn't Spotify say "don't play at work"? Seems it shouldn't be on in the break room

I agree and I think this is really the key demand that they should have organized around. Splitting up the revenues based on what you actually listen to is really how things should work from a fairness perspective to artists. It also is likely more compatible with heavier listeners than their demand of 1c per stream. To put that number into context, I listen to ~1000 songs per month on Spotify and I pay $2.50 for Spotify each month using a family plan. I'm not sure how the economics of 1c per stream are supposed to work out there.

Soundcloud has already gone in the direction of paying out based on what you actually listen to, and it would be great to see Spotify and other platforms follow suit. See http://fanpoweredroyalties.com/ for more details on Soundcloud's implementation.

Aren't your listens to an indie artist still driving up their listens across the platform? It's an interesting point that Spotify's algorithms probably drive more listens to popular artists, but I think overall listen-count it still the most equitable metric.

The point is that it's about valuing the content which actually makes or breaks people's decision to subscribe to the service. Spotify is convenient, but it wouldn't survive on top-40 content because people would just go back to their MP3s or listen to it on YouTube.

I'm pretty sure that Netflix understands this, by the way— they know that deep-pocketed competitors like Amazon are going to eat their lunch if they try to do mass-appeal prestige shows starring A-list celebs, so they only do a few of those (enough to basically fill the homepage), while leaning hard into extremely niche content. Like, have you seen how many weird cooking shows there are on there? Or Hallmark Christmas movies? This is stuff that's harder to find elsewhere, and there are dedicated audiences on Netflix who are mostly or exclusively consuming it. If Netflix's internal accounting worked like how Spotify pays royalties, those shows would be instantly canceled in favour of new primetime-style sitcoms.

But they aren't, and I think it's because there are pools of their subscribers who will cancel the service if there isn't a steady stream of the specific content they're interested in. Thus, their subscriber $$$ go directly to funding that content, rather than into a general pot that's broken up by raw viewership numbers.

Netflix understands this as they have become content creators.

Should is a big word, but it feels like Spotify could make us indie-lovers happy by rewarding the intentional listens with slightly more money. Perhaps giving them a cut of the next few recommendations. Even though I know that famous artists would get more of this than the indies, taking value from the long mid-catalog.

I think that's risky because then there's some process that puts you in one of the two buckets, and there's probably going to be a valley of suck between them, where you're big enough that you don't qualify for the indie special treatment, but not so big that you're raking it in like Taylor Swift.

The nice thing about the proposal from the article is that in theory it should be something where everyone's incentives are aligned, since it rewards artists and genres for having fans who listen to their stuff a lot.

Yeah, that's what I mean by the mid-catalog. People you didn't quite go intending to play, and not the headliners. To the degree that it's a fairness discussion though it always comes down to sorting into buckets (even if absolutely identical buckets) and arguing for some distribution.

Good point. That's the sort of thing that warms the cockles of my artist-supporting heart.

I agree with this argument, and this is THE reason why I don't pay for a streaming subscription. I have no desire to see my money to go to the likes of Justin Bieber (who I don't listen to), whereas I would much prefer it goes to the smaller ambient and indie artists that I like to listen to while working.

Spotify should charge by the minute so you turn it off when you're not actually listening.

They do kick you off after a while if you're a free account, but the marginal cost of the bandwidth for them is basically nothing. Anyway, it's 2021— who would accept a pay-per-time-listened Spotify in an age where Netflix, Hulu, Prime, and Disney+ are all all-you-can-eat for a similar price?

I feel like you should take Spotify's audited financial statements about how much they make and how much they return to rights holders (~75% of revenue) more seriously than your back of the envelope estimates: https://investors.spotify.com/financials/default.aspx

Agreed. The above calculation for example does not account for the fact that Spotify pricing varies significantly between countries and can be as little as 1.60$ per month.

https://edm.com/industry/spotify-premium-prices-by-country

Indeed! I have a family account for 6 people here in Brazil and I pay around 0.77 USD per person.

The problem is that most artists do not own the distribution rights to their own music, these are owned by various record labels. Many top tier artists create their own record labels and shoulder the cost of advertising/promotion while also dramatically increasing their cuts.

The fact that individuals aren't able to break out via self-publishing music is an oddity in the internet age. Why aren't there more avenues to hear "random new artist that matches my tastes"? or is it self-perpetuating that labels sign all successful artists who can go mainstream?

>Why aren't there more avenues to hear "random new artist that matches my tastes"?

Because Bandcamp is perfect at this and nobody can beat them.

I say that with tongue in cheek, but they have been the platform for average musicians to self-publish on for a while. They've even totally foregone their cut periodically during the pandemic to help artists. And unlike Spotify, artists are able to apply their own branding to their pages. I've never met a musician with a bad thing to say about them or their platform.

> Why aren't there more avenues to hear "random new artist that matches my tastes"?

One reason is due to flat rate bundled compulsory licensing. If you run a coffee shop with live music you either restrict all performers to only play original works and still probably get threatened with lawsuits, or you pay up the ASCAP/BMI/SESAC protection money and can play whatever.

So in many contexts weirdo obscure independent artists can't compete on price (e.g. give their music away just to get it heard) because the customer has already paid for a bundled rate for popular music.

I like to listen to jango.com which tries to "push" new artists while you listen to some "station"... I've found a few good "completely unknowns" there, but most stuff they push is really low quality. I think that a platform where you could discover new artists easily using a system similar to this (play mainstream artists, mostly, but throw in a few songs from unknown artists that play similar genres), but then had an option to "upgrade" to get stuff like offline access to artists you like, could become very successful.

This is Pandora, right?

https://en.wikipedia.org/wiki/Pandora_(streaming_service)

> play mainstream artists, mostly, but throw in a few songs from unknown artists that play similar genres

Isn't that just "radio"?

Yes, ignoring all other costs isn't great.

Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family memberships. Excluding free users, it's probably ~$5 per user.

That being said, Apple Music pays .75p/stream, Tidal is 1.25p/stream. They can probably figure it out.

If they cannot pay the artists more, a long-term freemium plan might not be a great business model then. If free users are seriously cutting into profits, should they change the free plan to a limited free trial? I was around in the 80s 90s and we didn't really have free cassettes and CDs and radio paid studios & artists with ad revenue. Spotify is well known enough now that it could be argued an unending free tier may no longer be necessary.

Perhaps the dynamics have changed since you had to shop for music in physical stores, and purchase it in hour-long increments.

I certainly play more music now than when I had to change the tape, but without the ritual and the intent, I listen a lot less. This changes my value from streaming over simply not having to store my music library locally.

It doesn't cost an artist more to be played more, but it does cost the streaming service. This may bring more casual listening and help some artists, and "underpay" someone who's more famous and would get the bulk of the first-song play that comes from intent. I don't think it's "wrong" but it may be the wrong fit for any given artist.

Totally agree. Maybe spotify should look like an app store with fees in the 30% range at the top end (shopify/apple/steam). Their role is very similar: distribution and discovery. They probably could wi points giving better payouts per stream to smaller artists too, like steam does. Hopefully competition will force it down too (eg epic vs steam vs apple). We might need open access to back catalogues and not exclusive deals, but its a start

The App Store for music exists many times over and users (including myself) prefer a lower cost streaming model. There is simply too much cheap or free music out there now for me to value it at iTunes singles prices.

Of course, and users would prefer completely free music over cheap music too. That doesn't mean it's sustainable, though.

I mean, short of government legislation the market isn’t going to stop driving the price of music down. The marginal cost of additional “performances” of the song is almost zero and people are constantly making new recordings for free because they love doing so. I don’t see why making a living off digitally recorded music has to be sustainable, and I don’t see how it can be when the supply is so endless.

It very well may not be sustainable. But I guess my point is that Spotify's business model might turn out to not be sustainable if artists decide it's not worth it to have their music on it.

If they don't decide that, then of course, maybe you just can't make a living selling music through Spotify.

You could probably make a living as a musician in other ways, though.

This doesn’t make sense to me, it’s not that they are eating into profits, it’s that they are eating into average margin; they presumably still at least break even on free users. And I would bet dollars to donuts that those free users are not going to convert to paid when piracy, YouTube videos, and free trials of other services exist.

I think Spotify is the first service to tempt me from piracy. Piracy doesn't handle discovery, or access across multiple devices, is a pain, and is actually (who knew?) illegal. Spotify handles all of those and won't get you arrested.

Youtube for music is simply worse than pirating and being caught.

To be fair, back in the day I used last.fm for music discovery, social music stuff, etc. and the more Spotify forces podcasts down my (paying subscription) throat the more I want to go back to piracy + last.fm.

> Yes, ignoring all other costs isn't great.

> Their revenue per subscriber is also substantively lower - including free users, discounted EDU users, and family memberships. Excluding free users, it's probably ~$5 per user.

> That being said, Apple Music pays .75p/stream, Tidal is 1.25p/stream. They can probably figure it out.

Their rates are per country, they differ. So these calculations gave to it into account, but everyone pays the 5 or whatever it costs now in the west.

The amount they pay per stream differs per country too, I think.

The nominal figure of what the platform per stream pays artists should not be discussed without taking into consideration the amount of monthly active users using the platform. Tidal and AM have significantly fewer users than Spotify

The $0.0038 figure is probably due in part to the way Spotify calculates royalties, dividing a pool of all subscriber revenue among all streaming activity, rather than dividing the revenue from each subscriber among each subscriber's streaming activity.

Some have pointed to logistical challenges in the latter model, but it's clearly not impossible, as SoundCloud just announced it will be the first service to adopt it: https://press.soundcloud.com/197001-soundcloud-introduces-fa...

Think about a strategic decision like this: Spotify decides to pay-out a $0.005/stream rate to Taylor Swift. That's more than most artists make, but its what Taylor demands, and Taylor holds some cards here because she's popular.

Let's say that Spotify says No. Spotify's argument is, in effect, all artists are sharing a piece of the same pie; if they give Taylor Swift a higher than average rate, it lowers the average payout for every other artist. By saying No, in this hypothetical universe, Spotify is standing up for indie artists.

Taylor (more accurately, her rights holders) does not put her music on Spotify. Customers who come to Spotify for Taylor Swift's music no longer feel that their subscription is worthwhile; they stop paying.

Now, the pie is smaller. Indie artists receive a bigger chunk of a smaller pie. Customers are left without the music they want. Spotify's revenue is lower. Everyone loses.

Its easy to place the blame at Spotify, and I'm sure they deserve some, but we've known for about half a century that the record industry is a hive of shit, and this is just another symptom of this. The disparity in income between the popular artists and average artists is huge, and its mostly because of gatekeeping that the popular artists actively engage in to protect their nine-figure fortunes. Spotify could have stood up for smaller artists, but I'm not convinced they'd even exist today if they had; it was really their willingness to work with the record industry that turned them into the force they are.

I do have some hope that Square's purchase of Tidal could be a catalyst for change in the industry. In other words, if they maintain Tidal's high(est) revenue share with artists, improve the user experience (a lot), leverage their existing industry relationships to keep enough popular artists on the platform, and work with indie artists... it could be very good. I'm optimistic. I think Tidal's core investors being artists themselves and a traditionally low-margin payment processor is actually very healthy, versus Spotify who effectively is just a middle-man that needs to extract enough to survive.

If Spotify is in fact spending 75% of its revenue on royalties, but according to you less than 25% of it arrives at the artist, what does that tell you? Either your calculation is wrong, or somebody who is not Spotify is pocketing the difference.

You think that the developers and every other party involved costs less than 50% here? Devs cost a lot. Bandwidth and servers don't cost that much, but for large scale data transfer like spotify, it does. Running the company costs a lot. Maybe the fair price is double what it currently is. But that might result in the artists making less than they currently do, not more (this is, in fact, my suspicion - if Spotify could increase profits by charging more, they would already be doing so).

How much of Spotify's revenue goes towards songwriters, labels, distributors, publishers, as opposed to the artist?

I tried to look into what radio paid out to these same people as a comparison, but the information I found seemed to be purposefully obtuse:

https://soundcharts.com/blog/radio-royalties

I couldn't actually find out what was paid, but it did look to be that, artists weren't really paid. It was song writers and publishers who were paid. Performing artists, however, only generated word of mouth which generated ticket sales - so far as I could garner.

The quoted $0.0038 is the total of what Spotify pays out to the distributor, who then distributes it between themselves, the artist, songwriters, their labels, etc.

Are only paid plans paying out royalties? I used to pay for spotify, but cut it after a budget rebalance since we just didn't use it enough. I still use it about 50% as much as when I paid.

While I agree more money should be sent towards small artists and I really hate to see myself defending a giant tech company, the demands of "x per stream" always makes me a bit confused.

Since spotify already pay out the vast majority of their revenue, there is not really much more room for increase there, at best 5-10% which likely wouldn't settle the case.

Reasonable suggestions would be that either: 1. labels should get less, 2. top artists should get less or 3. consumers should pay more.

Or am I missing something?

Maybe the artists think consumers should pay more. If Spotify wasn't a quasi-monopoly, it would seem silly for artists to demand consumers pay more only on the Spotify platform, but since Spotify is, the argument is at least prima facie reasonable?

Spotify doesn’t seem like a monopoly that has pricing power; they are in tight competition with multiple streaming services like Apple Music and amazon close behind and catching up. There are some sources that have Apple Music already with more paid subscribers than Spotify, and Spotify definitely can’t pay a penny per stream of their free ad users.

https://www.statista.com/statistics/653926/music-streaming-s...

https://www.businessofapps.com/data/spotify-statistics/

> Spotify doesn’t seem like a monopoly that has pricing power

I'd argue that all music-streaming services have very little pricing power!

Streaming services rely on being an easier/friction-free option as opposed to piracy (or alternatively, buying the copies directly from the musicians).

Your point is still valid though, the competition is still fierce; Amazon, Tidal, Apple.. etc.

They're also competing with FM radio.

No, I don't think you are.

For years there's been a conflict broadly defined as "streaming rates paid to artists are irrationally low" vs. "streaming services aren't making money as it is"; the problem is that those aren't mutually exclusive positions. They can both be true at the same time.

At least to me, this suggests that the real problem is that $8–10 a month for ad-free streams was too low a price point to set. If Spotify's pricing structure had been something more like Hulu's -- no free tier at all, $6/month with ads and $12/month without -- they'd have easily been able to meet that penny-per-stream pay rate. (Tidal beats that pay rate, but I suspect that's by virtue of charging $20/month for "hi-fi" streams.) But, at this point they've set consumer expectations: streaming music services cost $10 per month. Changing that would be pretty difficult.

> the real problem is that $8–10 a month for ad-free streams

Which sounds a bit weird to me. How many people used to spend more than $10 every month on LP or CD records. Probably many enthusiasts, but the average customer? Not a chance.

Yet artists say they get paid a lot less. The money must go somewhere.

Interesting question. The US recorded music market peaked year 2000, at $13.4B. (https://musicbusinessresearch.wordpress.com/2014/03/21/the-r...)

With 282 million citizens at the time, that means every US citizen spent $3.95/month on CDs. Adjusted for inflation it's $7.56.

> Yet artists say they get paid a lot less. The money must go somewhere.

I don't have any stats for this, but my first guess would be way more paid artists (before the internet, how many people could even hope to make money off music? Physical distribution vs digital distribution is a huge barrier).

IMO spending $10 a month on CDs is a different market, since you own an asset in perpetuity. Spotify would have to guarantee a perpetual license that expands your library access the more you pay in. Instead, Spotify rents access to a single large library (which is good enough for most but very different).

Exactly.

When I buy a CD, I have a physical good that is displayed on my shelf and it's going to stay with me for years, and which I can possibly re-sell.

$10 for Spotify gives me a month of listening to music. But after that is over, all I got is another $10 payment for the next month.

It's an interesting question. The cost structures are obviously very different, and while the assumption is that the internet always makes things cheaper and better, I haven't dug into that to see how it really plays out in this context.

> And Spotify is already paying out 75% of it's revenue to royalty holders

Realize that the royalty holders are not the musicians, but typically the major labels. The musicians get virtually nothing.

The fact that they're showing up at Spotify's offices then shows even more why they're not making money. They seemingly don't understand the business they're in... at all.

They sign shitty contracts that leave them with "virtually nothing" and then complain to someone who is not responsible for them having "virtually nothing".

Unsigned artists don't sign anything with labels but we do agree to Spotify's terms, and those terms take from us and hand it over to major labels.

If a user pays $10/mo and listens to nothing but indie streams, those indies are getting far less than $7.50 (more like pennies) due to the way they calculate their payouts. The major labels pocket the majority of that money.

Spotify have the ability to change this, but not the will to do so, because the major labels own a stake in them. Soundcloud recently launched a payment model that matches pretty much exactly what indies are asking Spotify to do, so we know it's possible but Spotify have been stonewalling indies about how it's too complicated for years.

If you are an indie artist (no record label deals) and agree to Spotify's terms, how are major labels involved at all? How are they getting the payouts meant for you?

Deezer explains it well here:

https://www.deezer.com/ucps

Well the size of the pie is still the same in this plan. All it would do is shuffle the money around a little bit, so some artists earn less and others more. The top demand from the linked campaign is for Spotify to pay out >3x what they currently do to artists, which is a completely different (and much more significant) ask.

That's exactly my point. I'm not arguing for the 1c/stream the OP is, rather to follow Deezer's model. Major labels are pocketing money that indies earned (and if you look into it they're not actually paying all of it out to their artists either). With this change indies won't be well paid, but they'll be paid fairly.

and why sign a deal or agree to terms that you don't agree to? Just don't go to Spotify?

Tell that to listeners. Many artists don't list themselves there for that reason, but you're penalized for it because Spotify playlists are increasingly the only way many people access music at all. The do or don't isn't always so black and white.

It's the same problem with the use of WhatsApp. If people want to talk to me there are other means to contact me. It's just that everyone is on WhatsApp. So what choice do I have? Be part of the problem or be excluded from social life.

"due to the way they calculate their payouts": yes, I'm sure that's the real issue, but the solution isn't a penny per stream. The solution is definitely to redistribute money according to what people listen to, but I doubt the big labels will accept these terms: they are the ones who negotiated, they are the ones stealing from indies.

Best case scenario: indies will get enough pennies so they stop complaining, big labels will continue as today, Spotify will allocate some of its own money to music creation...

and the problem will remain unfixed at the roots.

remember who forced Spotify and others before it, to negotiate a deal at all cost with the Majors or be declared illegal?

I totally agree, the penny per stream focuses entirely on the wrong thing, further entrenching the real issue by derailing the whole discussion. It also makes it less likely the real issue will be taken as seriously later on after we've just "cried wolf" over this one.

On the plus side, services like Soundcloud and Deezer are adopting the payment scheme that is the solution to this, which opens a potentially more promising avenue through which to pursue the issue ("if they can do it, why can't you?").

> They sign shitty contracts that leave them with "virtually nothing" and then complain to someone who is not responsible for them having "virtually nothing".

I guess that's what you have to do when you're powerless. Record labels force you into shitty contracts. They have the power. Who has power over the record labels? Spotify.

>Who has power over the record labels? Spotify.

What power does Spotify have over record labels?

Distribution tends to be the hardest part of any supply chain and it doesn't seem like music is any different. Spotify owns distribution and has almost no competitors anymore (either online or offline) and the future is very clearly streaming. So the labels will end up depending on Spotify for revenue. In 2018, streaming revenue accounted for half of all label revenue[0], and that will only increase.

[0] https://mashable.com/article/major-music-labels-19-million-p...

>Spotify owns distribution and has almost no competitors anymore

According to the statistics I have, Spotify has 34% market share while Apple Music has 21%, Amazon Music has 15% and others have 30%. That's hardly "no competitors".

Spotify doesn't own any distribution. The labels do, and they could just not renew their contract and move to a competitor's service at a whim, destroying the company (who wants a service where 1/3 of the artists are not available?).

They have the biggest share currently, but they're never safe.

> They seemingly don't understand the business they're in... at all.

Do you know any musicians? Like, real musicians, for whom music is their life and their life's work, not dabblers?

Typically these are not shrewd business types. They don't hold a lot of negotiating power; if they're lucky enough to get a chance with a label deal they often don't push back on the terms very much at all. Labels are notoriously predatory in this regard, particularly mainstream large companies.

All they want is a fair shake. They see themselves and their fellow artists being screwed continually, while people that have nothing to do with their hard work, long nights, and passionate effort make money off their backs. For every artist that learns, there are ten more willing to take their place just for a tiny sliver of a chance at popularity.

The solution here is to do whatever we want to continue the slow work towards destroying mainstream labels. Indie labels still offer a reasonable value proposition in terms of the promotion and recording work they do in exchange for a share of the proceeds; mainstream labels don't. Like most media industries, they're headed by parenthetical elites, cosmopolitan types who have no loyalty to anything but profit, and will squeeze out every drop no matter the impact to the actual working artists.

Fuck 'em. Don't listen to mainstream music. Support indie artists and labels; buy direct wherever possible. If anything, the protest should be to make it trivial to directly host your music with Spotify for a nominal hosting fee, so that all revenue can go direct to the artist, rather than having to go through a 3rd party service.

Think you got down voted as you were actually caring about people and not discussing the ins and outs of tech and pricing structure theory. #sadness

I think this is the main thing most music fans (and young musicians) are forgetting: historically, musicians have never made money off of album sales, labels have. Musicians make the bulk of their money from touring and merchandise.

Steve Albini does a good job of breaking it down here: https://thebaffler.com/salvos/the-problem-with-music.

FTFA:

> For the average band, a $250,000 advance (in 1993 dollars) is distributed like this:

> Record company: $710,000

> Producer: $90,000

> Manager: $51,000

> Studio: $52,500

> Previous label: $50,000

> Agent: $7,500

> Lawyer: $12,000

> Band member net income each: $4,031.25

Historically this model made a lot of business sense... it was hard to distribute before the internet. The record company took the product and marketed and sold it to a broader audience than the artist or band would ever be able to reach on their own. The artist in turn collected the money on the live performances which, if there product was successful, would yield good returns.

I don't know if it makes nearly as much sense in a world where you can just upload your music to YouTube and do direct marketing via Twitter/FB/TikTok.

After a pandemic year one might see the problem.

Yeah, but that's not Spotify's problem to fix.

Isn't that a problem generally in the music industry?

Music rights are split into two traditionally, the songwriting copyright and the mechanical reproduction right. Previous to the internet, media sales mostly went to the labels who held hte mechanical rights and songwriting copyright was earned directly to the artist. So if you bought a CD the label gets paid, if you play a song on the radio an artist gets paid.

The music industry lawyers were incredibly smart when they passed the DMCA back before online music was much at all, and got internet streaming defined as mechanical reproduction so they got dealt in on streaming.

ASCAP, BMI, and SESAC, et al, which give large blanket licenses to cover most copyrights for songs charged well known quantity for licenses, and early music streaming services paid those. Harry Fox (at least at the time) was the clearing house for mechanical rights and there was actually no set rate or anything. DMCA created a compulsory license that Harry FOx would have to give, but the rates were not known at the time, so everyone was getting VC funding without knowing what anything would cost.

That rate is probably much higher than the songwriting royalties, so the music industry has succeeding in getting ahold of most of the money in a new format that was poised to benefit the artists directly.

I guess we should just be glad it didn't happen like video streaming and there are actually rights clearing houses so companies like Spotify and others can make compelling streaming services with very large catalogs, unlike the city-state video steaming where you need 3-4 services combined to get access to most of the mainstream stuff.

>" Previous to the internet, media sales mostly went to the labels who held hte mechanical rights and songwriting copyright was earned directly to the artist."So if you bought a CD the label gets paid, if you play a song on the radio an artist gets paid.

This is not correct. Mechanical royalties have always belonged to the songwriter. A record label pays mechanicals to a songwriter's publishing company who then passes it on to the songwriter. When a record label sells a record that contains a song an artist owns the copyright to the record label must pay that songwriter a mechanical royalty. When that songs is played on the radio at least in the US the songwriter gets a performance royalty. The songwriter gets paid a royalty in both cases. The label as a mechanical license holder is obligated to pay out a mechanical royalty.

https://www.bmi.com/news/entry/Understanding_Mechanical_Roya...

Perhaps the GP meant to identify the two rights as the right to reproduce the composition (mechanical) and the master right. The royalty on streaming services for the former is even smaller than the latter.

Can you, or someone, share a source for the first paragraph? It completely changes my perception of music royalties and I'd like to be sure before I repeat it :)

You want to read up on music publishing as well as royalties[1][2]. It's important to understand both and it's hard to discuss one without the other. But basically if you understand the these two subject you will understand to a very large degree how the music business works. In the record label model of the music business a label advances you money to pay for your recording and advances you money to pay for your music's promotion(videos, tour support etc.) Before an artists sees a single cent of money from album sales they need to pay the label back all of the money the label advanced them. These advances are paid back via mechanical royalties. It is not until a label recoups every cent from the artist that the artist begins collecting royalties. This is how a lot of artists can sell a bunch of records and yet end up in debt to the record label. S

[1] https://soundcharts.com/blog/how-the-music-publishing-works

[2] https://soundcharts.com/blog/music-royalties

https://www.royaltyexchange.com/blog/mechanical-royalties seems like a decent explanation, though I'm not an expert in this area...

Well musicians do voluntarily sign the contracts with major labels. And they do get payed for it.

https://www.npr.org/2020/12/07/943818966/bob-dylan-sells-son...

The three or four major media companies/rights holders correspond to roughly 75% of streams on Spotify, and probably the entire catalogue of music pre 2010. This gives them the bargaining power to influence playlists, recommendations, and so on. This is what they mean by payola. They can use this to launch new artists.

Independent artists don't like this.

There is no such thing as a "royalty holder." Record labels are copyright holders. The record labels pay out royalties. Royalties are paid to performers, songwriters and publishing companies. For streaming the record label pays two types of royalties - a mechanical royalty and a performance royalty.

Is "charging so little you can't cover your rightful costs" bad at business? Then yes, I believe that Spotify is bad at business.

Hypothetically, my profit margin making widgets would be better if I could just pay my raw material provider half-price. I could pay them half-price, add, say, another one-third of that to cover other costs and overhead, and probably dominate the market since I could charge less for my widgets than any competitors who have to pay the full raw material costs.

Again, bad at business? Depends on who you're asking.

It makes me sad to time and time again learn that the low prices of services I love are unsustainable and instead subsidized by treating someone unfairly downstream.

I wish I could be told what the ethical price for something is and I might actually pay it.

And if that price is too high, then maybe that service shouldn't exist in the first place.

I think the 90's (Napster, Kazaa, etc.) has proven people are simply not going to pay that kind of money for the product (music).

The music industry also seems a bit like a "winner takes all" market where there are a bunch of top grossing artists which make an insane amount of money and a much, much larger part which can't make a decent living out of it.

Almost every major internet content industry is winner takes all. That is just the nature of power law distributions. Ask your average social media influencer how much they make. Also your average YouTuber/Twitch streamer. It is not unique to the music industry, just that the music industry is older and has more inefficiencies in the form of middle man that don't contribute much in value production but still takes a large cut.

> has more inefficiencies in the form of middle man that don't contribute much in value production but still takes a large cut.

Not to go laser-eyes Marx, but this is definitely not unique to the music industry either

The ethical way to pay for music is to actually buy it from a site like Bandcamp, instead of perpetually renting it from Spotify.[0] Expect to pay about $10 for an album.

Bandcamp usually takes a ~20% cut, but now has regular events where they waive their cut.[1]

It should be clear that $10/mo is not a sustainable price to pay to listen to any and all music ever recorded.

[0]https://pitchfork.com/thepitch/how-much-more-money-artists-e...

[1]https://isitbandcampfriday.com/

I don't think this will work. I can spend 8 euro for spotify subscription, but if i had to pay for albums, I'll buy maybe two a month, then resort to piracy. I don't think this is very unethical, bc even if there is no piracy, I still won't buy more than two albums. I'll listen to free music on soundcloud and YouTube, fm radio, whatever, but I won't pay more.

Wait - how are you responsible for the fact that the artists sign away their rights to shitty big labels that take the majority of the money that work generates? How are you responsible for dumb decisions musicians make?

I'm not sure you get how the music industry works. Getting a record contract isn't quite like getting a CS degree, passing a coding interview, and being handed 125k and benefits by HR. But sure, all these musicians are just dumb idiots. Have some respect for artists (unless you hate music, I guess).

There was time before streaming that artists absolutely needed record labels and that was the set of circumstances under which they signed deals with record labels. Before Youtube and streaming services record labels provided distribution of your product to local markets as well as promotion of that product in local markets both in stores and on radio. The overwhelming majority of the big 3 records label's catalogs are from that era. How exactly does that constitute "dumb decisions musicians make?" Your logic is absurd and seems to predicated on somehow being able to predict the future.

I bet you also think grocery workers are dumb for agreeing to work while demanding better working conditions and fair pay.

They are not dumb decisions. An indie artist HAS to sign with labels if they want to make it in the industry. That's the way it's been and we've accepted for decades that that's the way it will be.

Mistreating workers is not okay. Workers joining the status quo to make a living is not dumb. Calling them "dumb" online is deplorable, however.

It's something that's changing drastically every day. An indie artist is more and more able to record and upload their own song to spotify today than any time before.

Just being able to upload to Spotify does not make a sustainable career. You need marketing, and you need to build up a wide and loyal following of people who will buy your stuff.

Do you know you have to pay the distributors to upload? Its not like YouTube. From the getgo you are paying someone.

Artists have literally shown up in the comments here explaining that it's not that simple, and that these rates are issues for people who sign to small/indie labels and even artists who own their own labels.

Also, "if you're abused it's your own fault for being dumb" is usually a take you want to be pretty careful with.

Being unable to monetize a hobby is not abuse.

Why don't you become a musician and try to make it before laying it out like this? They hardly have another choice. Do you immediately assume 95% of artists are entrepreneurial fools?

There are lots of musicians who aren't producing a living-wage's worth of value to listeners.

They do have a choice: they can get a better paying job if they don't like the amount they can earn from music. Society should not be responsible for funding someone's passion when there isn't demand.

And yes, the expectation that you can earn a good living just by being a recording artist is foolish. The vast majority of musicians throughout history have been unable to do so.

You sound like my Dad (who was right).

Get a better paying job is very easy in this business. The lowest of the low would be better paying.

I think it is sustainable if we can cut out the middle man, the royalties go mainly to labels and less so to artists. E.g. if an artist doesnt use a label on Spotify im sure his revenue will be higher and the current price would be sustainable. I think the royalties that go to labels are unsustainable

Doesn't services like Spotify make that easier?

AFAIK while you need a distributor and can't just upload your stuff like you can on Youtube, there's a bunch of them that seem to give the artists everything.

If the artist choose to go with a label that takes their royalties, that's on them. If they do it because they want the visibility and services, that has a cost.

Music is a field where a lot of people do it just for fun, and it's quite saturated. Supply (as in diversity of products) way outweigh demand.

I would just like to know why there is a need for a distributor in Indie Spotify artists? Its an agent. This agent doesn’t do anything.

I make music, I own all rights, I upload to streaming service, I should get all cut from streaming service. What does said agent do?

> It makes me sad to time and time again learn that the low prices of services I love are unsustainable and instead subsidized by treating someone unfairly downstream.

In general, price competitiveness on the market is based on some form of workforce exploitation.

I know it's not a zero sum game and so on, but someone is paying the difference on the discounted price you are offered.

There is plenty of money and it is sustainable, it's the curse of the middle man taking all of the money. If an artist uploads their own songs to spotify, there's plenty of money for the artist.

The pricing section seems incredibly naive. Why should streams be valued at a penny? Why not a tenth of a penny? I don't care how many streams it takes to buy a cup of coffee. What is the argument that 786 streams per cup of coffee is unfair? (I don't think it is)

Being a full time professional musician has only been a means to wealth for a handful of people through history. Most professional musicians, even successful ones, are unable to earn their lifetime expenses from their profession: they make some good money if they have a hit and then fade away and have to get another job. Or they have capitalize on their brand externally to the music market. Has there been any time period in the past several centuries when the average musician earned a living wage?

The goal of a million full-time professional musicians seems arbitrary and I'm not sure why it is necessarily desirable.

Music is a passion, so people are willing to spend time making music below market labor rates. With modern digital reproduction and ease of recording, demand will never exceed supply. I believe the cost of music can and should asymptotically approach zero over time as an ever-growing public domain becomes good enough for most uses.

Spotify doesn’t want to take the risk, but there’s probably money on the table from all the small gyms, coffee shops, etc that should be paying commercial rates.

I don't know about other countries but in the Netherlands companies already pay an additional fee which ends-up with the royalty holders [1]. Meaning you have to pay a special license fee when playing music in venue's such as stores, cafe's and even a common office work space.

[1] https://www.bumastemra.nl/en/everything-for-music-users/type...

They're everywhere in Europe I believe.

In Greece there was the notorious AEPI [1] that was collecting fees from both stores, as well as subscriptions from artists so they can "represent" them. They were demanding fees even when a store owner was listening privately in their shop (e.g. they had a radio behind the counter). They were dismantled after a corruption scandal: most of the collected money ended up as exorbitant salaries for the board of directors, with the artists again receiving pennies.

[1] https://web.archive.org/web/20170128110611/http://www.aepi.g...

I think that technically one is supposed to do that in commercial spaces in the US as well, but there’s an enforcement issue. Small businesses aren’t really at the mercy of roaming enforcement agents, but there are services businesses can subscribe to that cover the costs of royalties for playing in commercial spaces.

I seem to understand that they want "a penny per stream" to go to the actual artists, which sometimes are not the royalty holders. So paying out less to the royalty holders and more to the artists sound like it could work.

So the artists have a contract with the record labels to share revenue. How is it possible for Spotify to decide to split that revenue differently? Or is the demand to increase payout to the point that artists make $0.01 per stream?

I assume Spotify has agreements with the record labels about how much the royalty owner gets for each stream. Spotify could argue to change that so it's now 50/50 between the royalty holder and the artist.

Depending on how much leverage Spotify actually has here, they can of course try to change the existing agreements they have. Nothing in impossible and harder things have changed before.

That's not how any of this works. The split between artist and record company is defined in a contract that Spotify is not a party to.

>"And Spotify is already paying out 75% of it's revenue to royalty holders'

"Royalty holders" is not even an actual term. Copyright holders are the owners of master recording - often a record company. Streaming services license entire catalogs for a fixed price for a fixed period of time. Streaming service don't pay record labels royalties. Royalties of which there are two in the context of streaming are a) performance royalty and b) a mechanical royalty both of which are paid out to the publisher and songwriter.

>"So unless you believe that Spotify is bad at business and there's an extra ~75% of revenue Spotify could pull out of a hat, this is basically impossible to satisfy without cratering the total revenue by doubling prices, which is probably not in artist's interests."

The whole argument that the current predominant streaming model is the only viable business model is flawed. This seems to presume that the "pro-rata" distribution model that Spotify uses is the only distribution model. There is an alternative model that many artists are pushing for which is a the "user centric' distribution model. In that model the calculation of payments is based on the listening habits of each individual user. A simplified examples is that I only listen to one artist in a given month. In the user centric model the entire 10% of record labels 70% usually allocated to the artist cut is paid to that artist rather than those streams being calculated as percentage of all songs streamed from that one of the big 3's record label's massive catalogs.

> There is an alternative model that many artists are pushing for which is a the "user centric' distribution model. In that model the calculation of payments is based on the listening habits of each individual user. A simplified examples is that I only listen to one artist in a given month. In the user centric model the entire 10% of record labels 70% usually allocated to the artist cut is paid to that artist rather than those streams being calculated as percentage of all songs streamed from that one of the big 3's record label's massive catalogs.

Then they should push for that specifically, but it would not change the average rate paid per stream, but rebalance payments away from artists which are listened to by heavy music users towards artists which are listened to light music users.

They push for whatever they feel is right. I was simply pointing out that Spotify's distribution model is not the only one. It also has nothing to do with "heavy users" vs "light users." A heavy user can listen to the same artist or same small handful of albums.

> It also has nothing to do with "heavy users" vs "light users." A heavy user can listen to the same artist or same small handful of albums.

Currently, a heavy user (i.e. above average) controls the distribution of more money to artists than a below average user since they control the amount of money in proportion to how they stream.

A user-centric model that splits the revenue from a user means that those who listen to more music will generate less revenue to each artist per stream, and those that listen to less music will generate more revenue per stream.

An above average user that listens only to the same artist provides more money to artists now than in a user-centric revenue model.

Their business isn't to support Spotify, their business is to make money making music. If they can't do that with Spotify, then it would be better for them for Spotify to not exist.

Are there any figures on the % of overall Spotify revenue taken by platform owners ie. Apple and Google?

None. Spotify doesn't use any of the platform mechanisms for monetization that take fractions of revenue. This is why you have to sign up on the web for Spotify.

Isn't Spotify barely making a profit?

I think the real issue here is that people just don't want to pay as much for music like they did during the golden age of the CD. Most Spotify users are still on the free tier. Blaming streaming companies isn't gonna change that.

Last I checked that wasn't exactly the problem, at least not by itself -- even accounting for inflation we're spending several times more per capita per month on music than we used to "during the golden age of the CD." Moreover, a much higher percentage of that revenue is actually going to artists than in years past.

Faced with that reality, it would be interesting to know what is actually going on. Is total dollars spent on music not reflective of what artists used to make? Are there just that many more musicians than there used to be? Was it way harder to make a living making music in years past than we're giving it credit for? Are artifacts of pay-per-listen rather than pay-per-song causing a different payout distribution impacting the majority of musicians (e.g., you used to have to buy a CD to listen to a song just once)?

I think focusing on cents per stream is a bit complicated. In the end, are artists making more or less money than before?

Because before people would record songs from the radio on tape and listen to those. They would buy used CDs, pirate. Radio would stream the song, but you didn't know exactly how many people were listening.

I used to spend $0 on music. Now I have spotify duo for me and my wife. I also started buying vinyl records, but my bet is that the artists makes way less money from my vinyl collection than from my Spotify account

And that is 75% to Labels.

Why aren't these people targeting those labels?

Why aren't these people targeting others like Apple?

Or they want Spotify to operate as a Non-Profit because Apple is currently making Apple Music a Net Zero Profit business? ( Diluting there services revenue margin )

Do you have any idea how much bloat Spotify has that it can cut? Have you ever seen the NYC office? It's padded with hundreds of overpaid "creatives" poached from every NY agency who do nothing more than create unnecessary traditional marketing campaigns, all of which serve no one, while spending 80% of the day snacking on premium goods and watching insider music acts in their gigantic, swanky, luxury office space.

Source: Been there, seen it, a long time. Spotify needs to be nothing more than a functioning music utility. Instead their US offices are structured like a massive, bloated, 90's style agency party zone.

Trust me.

There is room to cut costs.