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At What Point Should We All Start Feeling Guilty For Using Spotify?

Posted: 01/29/2013 2:17 pm

The New York Times has a front (web)page story this Tuesday about streaming services like Spotify and Pandora and the paltry payments some artists report receiving from them. (Cue massive guilt trip for everyone using any of those services).

Central to the story is one Zoe Keating, an "avant cellist" (GUYS) whose Hypebot post about streaming music posts went semi-viral last year. The money quote (PUN INTENDED) from the Times article:

Even for an under-the-radar artist like Ms. Keating, who describes her style as "avant cello," the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.

(Not listed: How much money Keating made from iTunes, Amazon and other MP3 sales. We'll assume it is significantly above $550).

Criticizing services like Spotify, Rdio and Rhapsody for not ponying up enough cash to independent artists has become something of a genre unto itself over the past couple years, ever since Spotify's splashy U.S. launch in 2011. See here, and here, and here, and here.

Many artists, especially indie artists, are unhappy with the milli-pennies they receive from each song stream on these trendy new services, and some have taken to various web publishing platforms to register their displeasure at the cash that is and is not coming in.

You might be wondering, then, at what point you should start feeling guilty for listening to music on Spotify, or Deezer, or MOG, or what have you. Just when you think you're doing something good -- you aren't illegally downloading! You're using a service that serves you ads, or that you pay a monthly fee for! You are contributing to the health of the recording industry!-- you find out that you are supporting your favorite artist to the tune of $0.004611 per listen.

How are you supposed to feel good about yourself at those rates?

Well, you probably can't feel good about yourself, but you can feel not bad about yourself if you think about it in a certain light!TechDirt can show you how, from an explainer published six months before the Times piece. Their argument is that Spotify is nascent, and that as more and more users sign up for the service, the payouts to labels will become larger; already, some data shows, that transformation is occurring, with Spotify sending more and more money to the labels as its business has expanded.

You are an early adopter, and as more of your Facebook buddies sign up -- and as you get more and more of those email notifications that you are now "connected" with a friend on Spotify -- artists will reap in more and more money, both in terms of frequency and in amount per stream.

You might also argue, too, that a false binary has been set up: You're not either streaming or downloading; you're either streaming or finding music through piracy. Spotify and Rdio and the like aren't alternatives to iTunes; they are alternatives to What.cd and The Pirate Bay and torrent trackers. Those fractions of pennies artists are receiving are better than the zero dollars they would get if Daniel Ek hadn't started Spotify in the first place, right? And Spotify has caused a great decline in your music pirating activities, correct?

Another argument, via TechDirt: If you're going to be mad at anyone, you should be mad at the record labels who are, in the end, the ones negotiating contracts with the services and divvying out the income to the artists. Spotify's secretive payment algorithm, and mysterious, label-by-label negotiating strategy, probably isn't helping, and artists on smaller labels appear to be getting the shaft; that system could use some changing (and just might stanch the steady flow of artist discontent with the service somewhat).

Another seemingly important point that can mitigate your guilt: Spotify and Pandora aren't even profitable companies, so asking them to pay out more money seems a bit premature. Spotify lost almost $60 million in 2011, per a leaked report; Pandora is projecting millions in losses through 2013.

In other words: This is an ongoing story, as they say in the news biz. No one is quite sure yet how these streamers are going to affect the record industry in the long-run; whether physical media will disappear; whether iTunes will shrink to nothingness; or whether Spotify and Pandora and MOG and Rdio and Rhapsody will peter out as unprofitable artifacts of yet-another pie-eyed tech bubble.

Or, hey, maybe they'll figure out a financial model that will enrich the independent musical community in ways that Stephen Malkmus and Black Francis could have never imagined. Stranger things have happened.

[Read "As Music Streaming Grows, Royalties Slow to a Trickle" on the NYT website; for more on the subject, check Times author Ben Sisario's coverage of the digital music scene here].

 

Follow Jason Gilbert on Twitter: www.twitter.com/gilbertjasono

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