Spotify and all the other streaming music platforms license music from record labels, copyright holders, and publishers. The fees they pay are the result of hard negotiations. Given that Spotify has nothing to offer if they can’t steam music, they’re always on the back foot when it comes to these talks. The company is also hamstrung by the fact that the more users they have, the higher their fixed costs. Those costs rise in lockstep with the number of users, meaning that Spotify (and all the others) never see their margins increase. There’s very little room for efficiencies and synergies.
On the other side of the ledger, we have artists who are hoping to make money from streaming. With the pandemic shutting down any hope of playing live for the foreseeable future, they’ll take any revenue they can get. But because the payouts demanded by labels, copyright holders, and publishers is so low–and because those bodies take their cut of streaming proceeds first–there’s not much left for the artist.
Against that background, close to 10,000 artists have signed a petition organized by the Union of Musicians and Allied Workers demanding that Spotify increase the minimum streaming payout to one cent per stream. Given that the average payout is now a tiny fraction of a cent, this would represent a very significant increase.
The official name of the campaign is Justice at Spotify. They’re also demanding more transparency when it comes to the agreements Spotify has with labels and rightsholders. And they want recognition (and presumably payment) to everyone who works on a recording, including producers and engineers. This sounds a lot like the concept of neighbouring rights, which Canadian radio pays for the privilege of using music on the air.
Nothing from Spotify yet. But we’ll see.