Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.
Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.
Despite being the king of music streaming, Spotify is struggling financially, but why?
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I believe Spotify is largely responsible for its own financial struggles. Knowing that 2/3 of their revenue goes to the greedy labels, they should consider scaling back on operational costs and excessive investments in advertising and celebrity podcast deals.
In a way, it serves them right. Spotify plays a significant role in transforming music into a product akin to fast food, prioritizing mass consumption over artistic value. This approach not only impacts their profitability but also contributes to a broader devaluation of music as an art form.
So fuck Spotify.
Spotify plays a significant role in transforming music into a product akin to fast food, prioritizing mass consumption over artistic value.
Have you never heard of Top 40 before?
Absolutely, I'm aware of the Top 40, but my point is about how services like Spotify are amplifying the dominance of this type of quickly digestible music. While the Top 40 has always reflected popular tastes, Spotify intensifies the focus on ephemeral hits rather than promoting a diverse range of music and independent artists. Additionally, the technology behind Spotify, where artists or labels aren't compensated if a track is skipped within the first 30 seconds, further influences this trend. It shapes not only what we listen to but also how we value music.
I don’t agree with that at all. I’ve started listening to 10x more small artists via Spotify than I ever had through any other medium. They’ll never be on the radio or anything like that. Spotify has recommended these artists based on what I listen to, I haven’t sought them out.
I don’t believe radio pays artists anything do they?
My experience has been different. Even without Spotify, I've found a large number of new bands over the years through websites, reviews, and music videos on YouTube. This shows that there are multiple ways to discover diverse music.
My main concern is about the broader impact of streaming on the music industry. While Spotify can be a fantastic tool for discovering music, it's important to consider how its business model and algorithms might influence musical production and consumption patterns. Yes, artists do receive royalties from radio plays, but the system is different from streaming. My worry is that the streaming model, especially in terms of payment structures and engagement strategies, might inadvertently prioritize certain types of music, potentially overshadowing the rich diversity in the music world.
I think you’re twenty years too late on that worry. Most artists didn’t make any money once iTunes came out and singles became popular.