Spotify is the largest streaming provider today but YouTube did have that title unofficially in the past. So with any service that is used by the masses, it’s no surprise that Spotify now takes most of the punches while YouTube becomes a takedown haven for anyone who has created anything or wants to suppress free speech.
I’m sure you’ve seen all the headlines.
Spotify should pay more, Spotify is appealing the royalty rate rise, Spotify is getting sued, Spotify settles class action suit against it.
Maybe another take on those headlines might be;
- How much does the record label keep from Spotify’s licensing and royalty payments?
- Artists are appealing the low royalty payments they get from their label?
- Record labels get sued for banking billions from using the Copyrights of artists to negotiate high licensing fees.
- Artists settle class action suit against the Record Labels for keeping Copyrights longer than they should and for murky creative accounting.
Major labels no longer develop artists but they can make artists bigger. It all depends on how much an artist is willing to give up.
Because the labels will give the artist that large advance, however it will be probably be the last payment an artist will ever see from them.
Just recently, Italian composer Ennio Morricone (Metallica uses his music as a concert intro, plus he wrote the soundtracks to a lot of popular movies) won back his Copyrights. In his termination suit, it was mentioned how in the late 70s he made a deal with a label for an upfront payment in exchange for low royalties which never got renegotiated and of course by the 90s his music was being used for concerts, it became popular again as those 70s movies got re-released on DVD and so forth.
Metallica’s licensing fee would go all to the label and nothing to the Composer. A perfect example of getting a large upfront payment and then nothing in return.
The labels are greedy, who operate on intimidation and since MTV, they have been short-term thinkers. It’s all about the profits.
So what’s next for music distribution and a company living in two worlds. Spotify has a bad rep for its payments models but also a good rep because it’s useful to artists and fans, plus it pays for life.
But Spotify still doesn’t make a profit doing what it does and it still gets extra funding, to invest and grow the business. Their podcasts is a growing business as there are a lot of people who would rather listen to non-musical content than musical.
Maybe the problem with Spotify is that it doesn’t want to be just a music distribution platform. Music is seen as a means to become a global internet brand. Sort of like Apple, who used music to sell hardware.
And all you need to do is have a look at what’s happening with Netflix. The big studios who laughed off streaming once upon a time, are setting up their own streaming services. Expect the labels to do the same, because they want control of the distribution and the murky creative accounting.
And by then Spotify would be in a position to not care, because they would have repurposed the business to be a digital brand and the artists would have it even worse, because if they think Spotify is bad, wait until the labels get control of the distribution.