Spotify has set out its campaigning agenda in a new section quietly added to the Loud & Clear website, explaining how it believes governments and the music industry should go about addressing issues that impact on how the wider music community interacts with and benefits from music streaming.
The update steers clear of the issues that have most damaged Spotify’s reputation within the artist community in recent years - such as royalty thresholds that freeze out grassroots artists, the sneaky use of audiobook bundling to reduce payments to songwriters within the US, and running ads for the American government’s ICE agency. However, some of its suggestions are likely to be supported by artists.
Spotify calls on the wider music industry to fix the leaky pipes that stop songwriters getting paid, to further the crack down on streaming fraud and to introduce new measures to help stop unauthorised voice clones. It also sets out its arguments against streaming levies and quotas like those proposed in Canada.
Alongside griping about the royalty thresholds and ICE ads, some of the criticism about Spotify within the music community relates to the royalty rates paid on a per-stream basis, which is really criticism of the business model employed by pretty much every music streaming service, and the misleading lists that do the rounds suggesting that Spotify’s rivals are paying significantly more for each stream.
The campaign agenda begins by repeating Spotify’s big stat brags - Spotify pays “roughly two thirds” of its revenues over to the music industry and, last year “paid more than $11 billion in royalties to the music industry”. And, it insists, “there are now more artists generating over $100,000 a year from Spotify alone than were getting stocked on record store shelves at the height of the CD era”.
However, it acknowledges that issues remain for many stakeholders in the music industry, and then states that “through thoughtful policy developed by governments in partnership with industry”, more stakeholders can benefit by “growing music royalties further and reducing inefficiencies in the music ecosystem”.
Two of the seven policy proposals included in Spotify’s agenda relate to addressing issues that impact on how songwriters get paid. That includes addressing issues around the metadata that is provided to Spotify with each new recording and forcing more transparency on how the music industry’s collecting societies process and pay through royalties to publishers and songwriters.
These are pretty much in line with proposals made by the UK’s Music Managers Forum in the various ‘Digital Dollar’ reports produced with CMU, including the ‘Song Royalties Manifesto’ in 2022. Work is also underway in the UK on the metadata issues as a result of the government-led work instigated following Parliament’s ‘Economics Of Music Streaming’ inquiry in 2021.
Spotify’s demands around streaming fraud and AI will also likely be supported by the music industry, including the call for “law enforcement to dedicate resources to fighting fraudsters” and “sector-wide policy frameworks for addressing unauthorised artist impersonation” in the context of AI.
However, the streaming platform’s continued opposition to streaming levies and quotas might face opposition from parts of the music community, especially artists and indie labels who often support such initiatives.
Both France and Canada have introduced a levy on streaming services which is used to fund schemes that support independent music creators and businesses, while some countries - including Canada - have proposed rules that would force platforms like Spotify to prioritise local content in their algorithms.
Spotify argues that quotas “interfere with consumer choice and restrict artists’ ability to reach international audiences on equal terms”, while levies “undermine the paid subscription model, by increasing subscription fees to consumers and therefore increasing subscriber churn”.
Although, interestingly, it has an alternative proposal to placate the independent creators and labels who might benefit from and therefore support the levies. Maybe governments could instead divert a portion of the VAT already collected on streaming subscriptions to “support session musicians, emerging artists and local talent”.
It seems unlikely Spotify’s campaigning agenda will placate most of its critics in the artist community - avoiding as it does the most pressing issues as far as those critics are concerned - but some of Spotify’s demands will nevertheless be supported by some strands of the music industry, and on some issues pretty much all the music community.