No wood in the wood stock

May 26, 2015 3:21 PM

Sony's 2011 contract with Spotify has leaked. The Verge's calculations have Sony making a pretty sizable sum off the deal, without much of it trickling down to artists. Meanwhile, Sony has begun pulling all of its artists' music from Soundcloud.

More reactions and analysis from Billboard, Rolling Stone, the International Artist Association and Dave Lowery, who thinks Spotify leaked this to the Verge to combat the idea that they are cheating artists.

posted by Potomac Avenue (14 comments total)

None of this is surprising. Labels have been pointing to the streaming services for years saying it was their fault artists didn't make money, but all along the label owns a good chunk of the streaming service and desperately tries to reduce or cloud the amount they're actually obligated to pay those artists.
posted by downtohisturtles at 3:32 PM on May 26, 2015

Shocked, I am shocked.
posted by entropicamericana at 3:38 PM on May 26, 2015

Can anybody here point to a decent music streaming site that doesn't fuck over the artists? This isn't a rhetorical question, I'm honestly curious if such a thing exists. I'm subscribed to Rdio right now because I've been told that they have slightly higher payouts per stream for artists, but I'm not necessarily married to it. I try to buy direct from the artist whenever possible, either through Bandcamp or self-owned stores, but I know that isn't always feasible for artists who exist on certain tiers within the industry.

Remember when Trent Reznor and Radiohead made this big splash a few years ago by offering their stuff for download outside of the normal RIAA-affiliated channels? What happened to all of that? Why do labels still hold such sway?
posted by Strange Interlude at 5:08 PM on May 26, 2015

NIN and Radiohead have enormous existing fanbases to leverage; J. Random Musicianface doesn't.
posted by Pope Guilty at 5:28 PM on May 26, 2015 [2 favorites]

Can anybody here point to a decent music streaming site that doesn't fuck over the artists?

The only time an artist doesn't get fucked over from streaming is when they upload their own shit to a streaming site and most artists don't get to keep their rights when they sign with a label.

Why do labels still hold such sway?

Because a label can provide en masse marketing and promotion that would create a following that might take years if not decades to build up playing in corner pubs for peanuts.

Whether they deliver value for money to their clients is an exercise for the reader.
posted by Talez at 5:35 PM on May 26, 2015

Surprise! All the talk about how streaming music services were screwing artists out of untold revenue, even though none of them seem to turn much of a profit? Yup. The record label's screwing them both. The New Yorker:

The exact terms of the licensing deals that Spotify made with the majors are not known; all parties signed nondisclosure agreements. In addition to sharing with other rights holders nearly seventy per cent of the money Spotify earns from subscriptions and ad sales—about the same revenue split that Apple provides on iTunes sales—the majors also got equity in Spotify, making them business partners; collectively, they own close to fifteen per cent of the company. Some analysts have questioned whether Spotify’s business model is sustainable. The company pays out so much of its revenues in fees that it barely makes a profit. It operated at a loss before 2013. (The company maintains that its focus has been on growth and expansion.) The contracts are renegotiated every two or three years, so the better Spotify does, the more, in theory, the labels could ask for. This makes Spotify unlike many Internet companies, in which the fixed costs of doing business become relatively smaller with scale. For Spotify, scale doesn’t diminish the licensing fees.

When Spotify began in the U.S., labels demanded up-front payments as the price of getting in the game. These payments were not always passed along to the content creators, even though it is their work that makes the catalogues valuable in the first place. Month by month, Spotify pays the major labels lump sums for the entire market share of their catalogues. How the labels decide to parcel these payments out to their artists isn’t transparent, because, while Spotify gives detailed data to the labels, the labels ultimately decide how to share that information with their artists. The arrangement is similar on the publishing side. Artists and songwriters basically have to trust that labels and publishers will deal with them honestly, which history suggests is a sucker’s bet. As one music-industry leader put it, “It’s like you go to your bank, and the bank says, ‘Here’s your salary,’ and you say, ‘But what is my employer paying me? I work for them, not you!’ And the bank says, ‘We are not going to tell you, but this is what we think you should get paid.’ ”

The debate over services like Tidal and the ongoing revenue war between artists and streaming services seems designed to make the record labels as invisible as possible while they rake in the lion's share of the money. So basically, it's The Problem With Music all over again.
posted by chrominance at 5:49 PM on May 26, 2015 [5 favorites]

Can anybody here point to a decent music streaming site that doesn't fuck over the artists?-- Strange Interlude

Well, there's always Bandcamp, which pays the artists directly, but I don't think there's a way to use it as a streaming service in the traditional sense, where there are a lot of useful features such as 'radio play'. They really ought to add a useful radio/browse/favorites type user interface.

And there's this.

If more reports like this get out, maybe people will start boycotting the services that pay the end-of-the-chain actual artists very little money and always use the "we pay the label fairly but have no control over how much they pay the artists" excuse. I'm talking about you Spotify!
posted by eye of newt at 8:09 PM on May 26, 2015 [1 favorite]

You can stream quite a lot on Bandcamp. You can also link streams of albums you bought to other people, which is how I've found a bunch of blackgaze stuff I ended up really enjoying. It's the only digital service I use — I'm one of those stubborn people who likes physical copies primarily.
posted by Dark Messiah at 8:14 PM on May 26, 2015 [1 favorite]

If more reports like this get out, maybe people will start boycotting the services that pay the end-of-the-chain actual artists very little money and always use the "we pay the label fairly but have no control over how much they pay the artists" excuse. I'm talking about you Spotify!

What exactly are Spotify supposed to do here? The labels own the rights to (almost all of) the music! They show up in court the day after they start doing this and say "well we think the labels are really unfair your honor" and he replies with "triple damages". There is a huge asymmetry in just about every factor of contract negotiations between a band and a label. Spotify wantonly disregarding rights and contracts is neither the actor nor the action that could even start to possibly drive the change that's so sorely needed.
posted by Talez at 9:26 PM on May 26, 2015 [1 favorite]

2198. The Music Industry is long gone. In the ruins of Universal Warn-a-Sony, a former record executive assistant in a tattered suit roams what used to be the archives room where his superiors worked. Between old gold records stacked on a corner and unsold copies of Robbie Williams' Rudebox album, he finds a box with reports from the mid 20th to the early 21st century. One folder, barely readable, points at a conclusion that "Radio will destroy the industry. Must control it before it controls us". On another, it's contents lost but a faded round sticker with a strange pirate flag surrounded by "home taping is killing music". He puts it all in place, skipping past a folder named "Nap Ster" and another named "Vinyl re-issues and Record Store Day strategy". He picks up the last folder on the box, dusts its' cover and reads "Streaming". His face fills with grief more and more as each page is turned. After reading the last page, his knees falter. A tear rolls down his face, as he clutches his head and screams:

IT WAS US! IT WAS US ALL ALONG!
posted by lmfsilva at 8:07 AM on May 27, 2015 [3 favorites]

I am going to call Betteridge's law of headlines for David Lowery's blogpost; it's all just baseless speculation. Which he then takes and runs with in more recent articles. He is so off the deep end on this issue.

It is at the point that I absolutely refuese to see him in concert again and feel icky listening to his music.
posted by mountmccabe at 8:23 AM on May 27, 2015

What exactly are Spotify supposed to do here? The labels own the rights to (almost all of) the music!--Talez

They negotiated a contract with Sony that pays them millions in advance money that doesn't go to artists, plus they keep a hidden 15% off the top, and they kept it all secret. It seems to me that they are being complicit. Heck, as long as everyone is making money, how is this a problem? (Artists? What artists?)
posted by eye of newt at 8:02 PM on May 27, 2015

They negotiated a contract with Sony that pays them millions in advance money that doesn't go to artists, plus they keep a hidden 15% off the top, and they kept it all secret. It seems to me that they are being complicit. Heck, as long as everyone is making money, how is this a problem? (Artists? What artists?)

And the options available to Spotify is either acquiesce or not have music to stream. I doubt any company goes into a contract that basically fucks them if they don't see continuing sustained growth unless they have no other options.

The labels hold all the cards. The labels use Hollywood Accounting™. Why are we blaming everyone except the actual fucking problem here.
posted by Talez at 9:01 PM on May 27, 2015 [2 favorites]

One of the reasons Spotify is one of the most successful streaming services because they have the most music. One of the reasons that they have the most music is that they do these anti-artist deals with the music labels.

Spotify has a choice--not all the services do this--not by a long shot. I think saying that labels hold all the cards is misstating things a bit. Spotify and the labels are both holding all the cards. They are working together. It is the artists who are left without a choice (unless you are big enough like Taylor Swift).

In reality, it is the customers who are really holding all the cards--if we just realized it. People say that the labels and Spotify are greedy and don't care about the artists. But they get away with it because their customers (we) are greedy too.

Support the artists. Boycott Spotify.
posted by eye of newt at 10:07 PM on May 27, 2015