Is Spotify Killing Our Music Industry?
Whether you listen to pop, rock, DNB, classical or RNB music, Spotify has it all. Every genre you can think of and millions of tracks to choose from. Spotify is currently one of the most successful services as it proudly claims “36% of the global streaming market” (Iqbal, 2020) with just under 300 million monthly users (Spotify, 2020). It became one of the reasons that led to drastic change in the music industry when it launched in 2008 and 12 years on it continues to be “the world’s most popular audio streaming subscription service” (Spotify, 2020).
In many ways the introduction of this global streaming service has had an extremely positive impact on the music industry and can be applauded for what it has achieved. However, while listening to and enjoying its ‘music for every mood’, it can be difficult to remember what the flipside of it can be. This article intends to look further into both the good and the bad of Spotify; to find out if it is really as great as it seems, or if it has ended up creating more difficulties for an already troubled industry.
I wanted to start by looking at the positives of Spotify and to explain just why it should be celebrated.
Before the phenomena of streaming and Spotify that took over across the world, you will remember that we used to listen to music mainly through the radio and CDs. Although at the time this was perfect for the industry in terms of making revenue for the artists, producers, labels etc, this was only really possible for those who had a record deal. Therefore, it was not so great for those who were wanting to release music but didn’t have the funds or a recording contract to do so. Fast forward to 2008 and the struggle for musicians, who were wanting to be heard but had no way of being, was over.
The beginning of Spotify meant that any artist, anywhere, could release their music to a platform without the need of being signed to a record label. In turn, this has allowed for millions more voices to be heard at only a little cost, which goes towards the distribution company that the artist uses. This has made it an ideal situation for the ‘bedroom producer’ to share their music with the world and has given each artist more of a chance to pursue their dreams in the industry.
Not only has this been great for the musicians themselves, but it has also meant that music lovers and listeners have been given access to “nearly the entire mainstream Western canon of music (and much from beyond it)” with the ease of only “a few clicks” (Iqbal, 2020). Users of Spotify are able to listen for free, with the interruption of adverts, or you can pay for Premium in order to be able to downloads tracks and listen without ads. This new way of listening has been labelled as the ‘access model’ where we “pay for unlimited access to as many different works as we can consume, so long as we keep paying our monthly rate” (Iqbal, 2020). From the perspective of the listener, this is all you could ever want, and rather than having to pay for each individual track or album, means the user can save money.
The introduction of Spotify also massively contributed to the end of one of the industry’s worst issues at the time. While the birth of the internet has blessed the world in many ways, one of the major problems that arose for the music industry due to it, was piracy. Although some people may still illegally download music, Spotify has largely reduced that number as it took away the risks that came with doing that and made people acknowledge “that we should pay to listen to music if we can” (Iqbal, 2020). Without the progression of legal streaming services, the whole industry could have lost its value massively and so companies like Spotify have been extremely helpful in preventing this.
On the other side of the argument Spotify can be seen as being detrimental to the music universe.
When looking at the opposing side to my previous point about how Spotify has opened up the world of music to any artist by lowering the entry cost of releasing, there then comes the issue of musicians struggling to stand out. As millions of tracks are released daily, the negative repercussion of that has meant that the industry has become a much more saturated market. The fact it has allowed artists to take full advantage of being independent musicians in an industry that in the past was only powered by record labels, has led to an overload in music by musicians that are trying to ‘make it’. What has now become increasingly apparent is that what we once knew as the fight for a record deal, is now a fight to be heard.
Then there is the major issue of income and revenue for artists through Spotify. For us listeners it has been a “dream-come-true” (Iqbal, 2020) to be able to stream our favourite music, while only having to pay a small monthly fee. However, for musicians it’s a different story. Previously, artists would make a lot more money off of selling CDs and being heard on the radio compared to what they do from streaming. It has been estimated that a Spotify stream is worth “from $0.006-0.0084 to as low as $0.00318/stream” (Iqbal, 2020), meaning that “1000 streams on Spotify will earn the rights holder(s) of a musical work about $3.18” (Pastukhov, 2019). This income can become even smaller depending on what percentage the musician has to pay to its distributor or label.
With the main source of income for many artists being ticket sales at concerts or from gigs at restaurants, events etc, the financial state for all musicians has also been majorly affected due to the coronavirus pandemic. This led to artists petitioning Spotify to “raise its royalty rates…in order to help them survive” (Iqbal, 2020). However, it was then found that in the same month Spotify had actually requested the artists to “pay it money in exchange for on-platform promotion” (Iqbal, 2020), creating the assumption that they are not as supportive of their artists as we may have thought. Along with the fact that in 2019 the company’s annual revenue was “at €6.7 billion ($7.3 billion), with gross profit of €1.7 billion ($1.8 billion)” (Iqbal, 2020), it does make you wonder why they won’t raise the royalties of the musicians that are the reason their platform runs successfully.
The final point I want to discuss is the knock-on effect that the introduction of Spotify has had on Radio. When any new technology progresses, ones that were previously popular do tend to get left behind and forgotten; and I think that is what is happening to the Radio industry due to streaming services like Spotify. For those who listen, or used to listen, to the Radio simply for the music, it now seems that Spotify playlists are the preferable option. Being able to choose what you listen to and avoiding having to listen to the dreaded ads (that’s if you have Premium) is a luxury that millions of listeners have taken advantage of – I mean, why wouldn’t you? However, from the view of those working in the Radio industry this is probably a rather worrying change.
In summary, I feel that the best way to describe Spotify’s influence on the industry is through the fact it is effectively a ‘double-edged sword.’ If you look at it in the sense of providing a legal service that users are most likely to pay for, and as giving a platform to those musicians who want for their voices to be heard, there’s no doubt that it should be commended. However, the fact that there pay per stream is extremely low, especially when it can be difficult to even be found among the millions of other artists, is a low point for Spotify. In an ideal streaming world, all musicians would have a successful career, be heard by all and have enough streams to provide a large income; but sadly, it doesn’t work that way.
Spotify has been revolutionary in the sense of paving the way for streaming and I don’t believe that it is killing the industry. The music world has always been tough and it doesn’t seem to be getting much easier, but I don’t think that Spotify are to blame for all of the difficulties. After all, they are “giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it” (Spotify, 2020).
References
Iqbal, M., 2020. Spotify Usage And Revenue Statistics (2020). [online] Business of Apps. Available at: <https://www.businessofapps.com/data/spotify-statistics/#:~:text=during%20Q3%202018-,Spotify%20User%20Statistics,Premium%20subscribers%20in%20Q4%202019.>
Pastukhov, D., 2019. Soundcharts | Market Intelligence For The Music Industry. [online] Soundcharts.com. Available at: <https://soundcharts.com/blog/music-streaming-rates-payouts#how-much-does-spotify-pay-artists-around-the-globe>
Spotify. 2020. Spotify — Company Info. [online] Available at: <https://newsroom.spotify.com/company-info/>
Written by Olivia Adams
I’m a Journalism and Communications student in my 2nd year at Cardiff University. I am extremely passionate about writing, especially for my own blog, and hope that once I have finished University, I will be able to pursue my dream of becoming a journalist/writer.