Spotify: Not OK, Computer?

Neil Wood assesses the value of the increasingly under-fire Spotify.

In a flurry of tweets, Mr Thom Yorke, famed man of Radiohead/Atoms For Peace/crazy dancing, doubled up in a tag-team fashion with long-term collaborator Nigel Godrich in a wrestling match against the world’s biggest music streaming service provider, Spotify.

The argument over the artists’ entitlement and what they actually receive has long bubbled under the surface, with the likes of The Black Keys and Four Tet already voicing their concerns on the matter previously – but now Yorke and Godrich have slung their first dig at the Swedish-born industry giant in removing Atoms For Peace material as well as Yorke’s 2006 solo album ‘The Eraser’. Godrich spoke out Sunday, saying that “people are scared to speak up or not take part as they are told they will lose invaluable exposure if they don’t play ball.” Parts of his argument were later supported by Yorke, who backed up his colleague in stating that “new artists you discover on Spotify will no(t) get paid. meanwhile shareholders will shortly be rolling in it”. Consider this fight under way, then.

And so, in a state of self-defence, Spotify has hit back claiming it is “still in the early stages of a long-term project that’s already having a hugely positive effect on artists and new music” and that the $500 million paid out to rights holders (“artists, labels, publishers, and performing rights societies”) so far will reach $1bn by the end of 2013. In fact, they pay out close to 70% off their total revenue to the rights holders – can they really afford to pay any more than that and should we expect them to, particularly in early stages of its existence? 70% is a huge amount, higher proportionately than other music services.

There’s no denying that Godrich is painfully correct when he says “It’s about establishing the model which will be extremely valuable” rather than becoming distracted by the numbers and the tangible amount of pay-out. A case of when this happens is the issue.

Punches are flying left, right and centre now – and this fight could go on for a long, long while. Let’s be honest here though; the functioning Spotify that is currently in existence is better than no Spotify, right? If we remove the super-streamers from the equation entirely we’re left with a rather large hole that will inevitably be filled with an influx in YouTube views and competitor streams. In other words, people will find the music they want to listen to and will, one way or another, likely be able to find it for free. Let’s remember that YouTube pay less to the artists than Spotify and some alternative streaming services, take SoundCloud for example, pay absolutely nothing at all. An issue over what counts as using a service for promotion rears its ugly head, but regardless: If we remove Spotify, what we’re left with is swings and agonisingly repetitive roundabouts.

Being heard is the most important thing here, isn’t it? If your music is exposed on Spotify it can inevitably lead to ticket sales, more attention in the long run. But, as this issue of justifiable payment has risen to the fore once more, surely the time has come for Spotify to be the diplomat, tap out and reach a common ground with the artist. A fairer model is required within which artist, label and Spotify can all benefit. I’m not a business boffin and I don’t know if such a model is achievable; but as an example, and in conversation with the NME, Hookworms’ Matt Johnson revealed that he’s only received £42 for 100,000 plays – and that doesn’t seem fair at all does it? It is proof that Mr Godrich isn’t joking when he says “the model pays pittance to the new artist right now.” But one further aspect to acknowledge is that the rates vary, because Spotify don’t decide the fee entirely; labels and distributors also come into the equation. Beggars Group pays out 50% of its streaming revenue to artists, for example.

I suppose what’s important here is to not bite off the hand that feeds us as music consumers. We need Spotify almost as much as we want it to change. But above everything else, beyond this yes-but-yes-but argument is a further question: Is Thom Yorke – a man associated with the birth of the name-your-own-price basis whereby the consumer can value the product at, more or less, whatever they like – the right figure to front a rallying call here? Is that not mixed signals? On the one hand Yorke and Godrich are figures who are openly seeking out a method of improvement in trying to lessen the barrier between artist and fan. God love them. But then, on the other side of the argument; is removing your music from Spotify not then a step towards alienating your audience? There are plenty of questions to consider – and not least the most poignant of them all; have Yorke and Godrich contributed in taking us beyond the point of no return with the pay-what-you-like ‘In Rainbows’ release? Music’s devaluation comes from all sides. If Spotify don’t play ball then surely more artists and labels must be tempted to follow this new example and remove their music. If that’s their prerogative, so be it. They have the option.