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.