Jim Carroll

Music, Life and everything else

Spotify and the blame game

There are some rows which are destined to run longer than a Broadway show. Just as we think some music business memes are coming to a close – we haven’t heard anything from IRMA about piracy in a while, you …

Wed, Nov 23, 2011, 08:56


There are some rows which are destined to run longer than a Broadway show. Just as we think some music business memes are coming to a close – we haven’t heard anything from IRMA about piracy in a while, you know – another version of the same argument crops up in a different place and we start all over again. It’s like trying to get rid of ragwort from a big field with a slash-hook – there are always more weeds popping up behind your back.

Last week, it was the turn of Spotify to get a kick in the goolies as the state of the music business argument turned on the popular streaming site. It began when distributor STHoldings became the latest indignant company to remove all the music released by the labels it represents from Spotify and other services due to its unhappiness with terms and conditions (and payments – its iTunes sales had dropped over the last few months and it’s blaming Spotify for this).

As the fuss began to die down from that palaver, Jon Hopkins tweeted about his royalty statement – “Got paid £8 for 90,000 plays. Fuck spotify” – and we were off again. When something like this happens, you don’t need to read “The Shallows” to know how the interweb is messing with your brain and your attention span.

In truth, scuffles and skirmishes like this are part and parcel of progress. In the case of the music business, technology has disrupted its once cosy core business model beyond recognition and we’ve had nothing but whinging and fuming and whining for years from the players who’ve been hit by these changes. Actions like those outlined above are attempts to put the genie back in the bottle and you don’t need to be a regular OTR reader to know how that one goes. Memo for those at the back: we’re not going back to record shops and CDs ever again. Get over it. Spotify revenue is never going to replace the money you used to make back then. Get over that one too.

Of course, it’s human nature to give out when things don’t work out the way you think they should and when you feel shortchanged. Before Spofity came along, an artist like Hopkins and labels repped by STHoldings would be carping about something else to do with the business.

But the thing about Spotify boycotts (Coldplay were also in that game) and giving out about getting eight quid for your music (would Mr Hopkins have sold 90,000 copies of his music had Spotify not existed, perchance?) is that it misses the point completely. The record industry has been changed forever by forces beyond its control, yet many involved still persist in thinking that they can dictate the same terms and conditions as used to be the case. This largely doesn’t hold sway in any other sector which has been disrupted by technology so why should we expect music to be be different? Yes, artists need to get paid for their work, but to expect the same rate of payments as they get from other channels when there’s a different cost base and user experience is never going to wash.

To be fair to Spotify, there are some players who are quite happy (or perhaps “happy” is not the right word – see comment number 19 below) with what it has to offer. Kudos Distribution managing director Danny Ryan points out that “streaming services are very long tail” and “it takes time for consumers to discover your music, add it to playlists, favourite it, and share it with friends” and thus increase your revenue. Ryan also links to reports from Sweden, the home of Spotify, and the US about the positive effect of services like Spotify on piracy (which doesn’t actually pay the artist a red cent),

But it’s the public who decide in this new age and perhaps this is the elephant in the room which the music side don’t want to mention. Let’s remember that Spotify is a big deal because people use the service. Yes, you could say it’s popular because they have millions of (legally acquired and paid-for) tracks from artists but there are lots of services who can say the same thing. Spotify is popular because it’s damn fast and is easy to use and people like it. People have said yes to Spotify. People go to Spotify to hear music. And if your music is not there, well, they won’t be able to hear it. You might want them to go elsewhere but chances are they’re not going to go with you. In the words of the Wu, consumers rule everything about music right now. Artists might think they’re entitled to big pay-days for their music but consumers, most of whom realise that when you’re getting your music for free that no-one gets paid a whole lot, seem to think differently.

Some of those who’ve removed their music from the service will shrug and go “fine”. Other fish to fry, other places to go, other people to see. Some labels know that the bulk of their audience aren’t currently on Spotify to begin with – most of the labels repped by STHoldings are dance labels with healthy vinyl sales, for instance – so their absence isn’t going to hurt them unduly.

But streaming services like Spotify are not going away. They’re on the rise and are going to attract more and more traffic in the years to come. And the terms and conditions were hammered out between the techies and the labels, just like the deals that were done with Apple for iTunes in the past. No-one can say that there wasn’t some negotiations done before someone spat on their hand and sealed the deal (or whatever the corporate boardroom version of that cattlemart deal is). Everyone know what was going on.

More than anything else, this whole fandango demonstrates the lack of trust and understanding between the music side and the tech side. The music side knows that the tech side has the upper hand and knows that new business models are going to decimate old revenue streams and are trying their damndest to stop it. The tech side know that consumers are changing their music listening patterns and are responding to that by providing services which music fans are embracing. While there are still some who shoot first and answer questions about payments later (cough), the vast majority of tech players in the music game have copped on and do the meetings they’re supposed to do and pay the cash they’ve agreed to pay. Of course, the music side want the same deals as ruled the roost when everyone bought CDs but, sure, like Robbie Keane, we all have dreams.

Next week, Spotify wil be unveiling a “new direction” which will, per a statement from the company. answer the quesion “what’s next for Spotify?”. It’s unlikely, much to the chagrin of many, that it will involve the service paying the same amount of cash to artists that they currently get from national radio stations. Time for this particular blame game to come to a close.