The Third Eye

I know it has been talked to death, but I want to talk about Spotify and what I feel is their unfair business practices. I (Tom) will confess to having used it in the past, albeit not for very long, but I never felt good about using it due to their meager payout rates. Today we will go over those rates, the up and downsides of bands using the service, and the thoughts musicians have about Spotify in general.

About Spotify

According to a BBC article from March 2018, “Founded by Daniel Ek and Martin Lorentzon, Spotify actually started as a small start-up in Stockholm, Sweden. They developed the platform in 2006 as a response to the growing piracy problem the music industry was facing. Launching two years later, Spotify offered music fans a free service with advertising, in hopes they would upgrade to the £10 a month ad-free subscription.”

Sounds good, doesn’t it? A one-stop place to stream all of your favorite bands, hoping that it would be the next best thing for supporting both mainstream and underground music. What we actually got was far from supporting the musicians that really deserve it, paying them a pittance of what their music was worth, and pocketing the bulk of the money for themselves.

Payouts

In September of last year (2022), Headphonesty posted an article that breaks down payouts by Spotify and its competitors and how it affected physical album sales.

“In 2020, the total sales of physical album copies dropped by a whopping 30%, while paid subscriptions grew 12% from the previous year.”

Since bands make a sizable chunk of their money from physical sales, including merchandise like shirts, patches, etc., this trend of listeners not buying physical copies hurts the bands that aren’t as well known. Meanwhile, the mainstream acts are still pulling in money due to the number of people that stream their music, touring, merch sales, and physical release sales, which is simply because these established artists already have a massive fanbase and are pushed by major record labels.

I would much rather purchase copies of albums, be it on cassette, vinyl, or compact discs, and support bands from any level of success, especially bands in the underground. The music people aren’t hearing is often much better than the big-name artists, and the lack of sales can sometimes cause these bands to fold due to financial difficulties.

Now, the fact that Spotify only pays between .003 and .005 cents per stream only adds to the devaluation of music and, in my opinion, makes it so that Daniel Ek can prosper off the backs of the very people that put their music on their service. However, I’m not naive enough to think that there are only downsides to this streaming behemoth.

The payout rates may be terribly unfair, but Spotify can get bands more attention than they would by simply using Bandcamp. This can lead to fans buying physical copies of their albums, an increase in show attendance, t-shirts, etc., which can positively affect the music scenes they are a part of.

Twitter user Lord Bael shared his experience and thoughts on Spotify, which are mainly positive. He told us that …

“For my band Shi, we would absolutely have significantly less reach or visibility without the platform – admittedly, our band name makes it near impossible to just search for the name (you usually have to search album title to find us), but the ease of sharing once on a track, artist page, or album is without question a huge benefit for ease of spreading stuff around. Similarly, the platform is one that such a wide swath of users populate frequently, and they make it easier for folks to save a track/make playlists and such as opposed to using something like Bandcamp.

Obviously, the payout is a bummer, but for me, that’s more exacerbated by the fact that we have to pay a 3rd party (in our case, Distrokid) to get the songs and such on the platform at all. If there IS a way for an artist to directly upload and manage their music on the platform, it’s not particularly clear or user-optimized.

However, I think the benefits far outweigh the costs in the end.”

The band, Strangers with Guns, had this to say …

“The Irish industry will never give a band like us a look in; thanks to Spotify, our music has hit over 100k sets of ears; I think that’s one in the plus column.”

Long Island’s Old Bones told us that …

“Absolutely an evil necessity. We’re on all streaming platforms, and we promote our Bandcamp the most, but Spotify has gotten our music in more hands than anything else, and while we love and appreciate people streaming on Bandcamp, it doesn’t fund the next record/merch/tour alone.

Bandcamp helps, but most people aren’t as willing to pay some random unknown band. Spotify (or any streaming service) at least gets us fractions of pennies for people trying the music. If they like it, awesome, and they’ll usually support more. But we can’t tour, so every bit helps.”

That same Headphonesty article also provided the rates of other streaming sites, whose payout rates aren’t always much better.

Final Thoughts

After talking to the bands and some subscribers and doing some research on things, I still stand firm in my belief that the payout scale is too small, as are the other streaming services out there.

However, I can also better see the positives of what Spotify offers, and those can be affected by users as well. Adding a band to your following list, creating playlists with your favorite bands, and the sheer number of people that use the service help create an effective advertising system.

For example, Billy adds Wolftooth and Doomstress to his public playlist, knowing that they’re both excellent bands, and then shares the playlist on his various social media accounts. From there, the chances of them being “discovered” by new fans grows, even more so if the new fan shares them in the same way. This is a win-win for everyone in the chain.

So, like everything in life, there are pros and cons to having your music on Spotify, and as much as I hate to admit it, I can see more of the pros now and have gained a better understanding of why people use the service. So go help out your favorite bands and share your playlists for all to see!!!

This article was written by Tom Hanno, who has been writing reviews for the last 7 years but has been sharing his love of music for the majority of his life. Originally starting out at the now defunct Chimera Magazine, he is currently contributing to Doomed and Stoned, The Sleeping Shaman, The Doom Charts, Tom’s Reviews, and The Third Eye. Read more of Tom’s reviews by checking out his Linktree.