Music, Opinions

Does Spotify exploit Musicians for profit?

It’s more likely than you think.

words by: Kayla Carmicheal
Mar 9, 2022

Streaming services, and their lack of payment to artists, have recently come under fire again. In January 2022, Joe Rogan’s Spotify podcast, “The Joe Rogan Experience,” caused public outrage. Why? Its host was spreading COVID-19 vaccine misinformation and making racist remarks. In retaliation, many musicians, including Neil Young (who survived polio before there was a vaccine available), Joni Mitchell, and India.Arie pulled their music from the streaming service.


Amid the fallout, the ball fell in Spotify’s court. Ultimately, the $100 million multiyear deal with Rogan stayed intact, scraping by with only the removal of over 70 episodes that contained misinformation and racist remarks. Spotify has powers that be who seem all too happy to keep Rogan on payroll. So it looks like a slap in the face to artists — who struggle to make ends meet based on what Spotify pays them — that Rogan kept his deal.


But that’s not all.


The artist exploitation experience

Musicians, especially indie and smaller acts, aren’t able to make a living wage based off of streaming payouts. How can they, when Spotify pays $0.0038 per stream? That’s less than a penny. Imagine how many streams an indie musician would need just to make minimum wage.


Unfair royalties have been an ongoing issue with multiple streaming platforms, especially Spotify, since their inception. In fact, from 2014 to almost 2017, Taylor Swift’s music was famously nowhere to be found on Spotify, citing that she was “not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music.”


Additionally, according to The New York Times, “In Britain, more than 150 artists, including stars like Paul McCartney, Kate Bush and Sting, signed a letter asking Prime Minister Boris Johnson for reforms in the streaming economy.”


It’s looking a little too much like artist exploitation, isn’t it? Because here’s the thing: Streaming makes up for 83% of recorded music revenue in the US. And Spotify? 300+ million users. Hell, I have a dormant Spotify account myself. And I’m sure many of you have active accounts that are being paid for and used right now.


So, if streaming is such a big part of how we listen to music, and Spotify makes enough money to pay $100 million to racist podcasters, $65,000/yr to entry-level software engineers, and is valued at a pretty little $37 billion on the New York Stock Exchange, why do artists, the very force that made Spotify, get so little of a payout?


The Spotify business model experience

Apparently, streaming makes Spotify zip. Every quarter, they report losses on music streamed. Which is why they like to fight to pay artists even less. If something here isn’t adding up to you, you’re not alone. So let’s talk a little about Spotify’s history and inner workings, shall we?


Once upon a time, two dudes named Daniel Ek and Martin Lorentzon built a library of music (they did not own), for zero dollars and zero cents. Their plan? To offer this music in a scarce way (in 2011, that was streaming), and make money from ads and paid subscriptions.


Enter Spotify: Sign up and get all the music you want, and from the convenience of a sexy-looking black and green app. Maybe you even pay Spotify for a subscription. But notice how, in this equation, the people who make the music aren’t getting paid or helped. In fact, Spotify, to this day, invests a whopping $0 in music development and recordings. Huh.


For this to work, Spotify’s business model has to be under the guise that digital music is worth nothing. After all, that’s how much was paid for the music when its IP was stolen for profit. And Spotify’s top dogs know that. They argue that without Spotify, music is inaccessible. And with inaccessibility comes piracy. Not only that, but how will people even find music if it’s not on Spotify? So, according to them, artists being paid fairly for their work, *scoff,* it’s asking a little too much.


Back in 2011, streaming was an unsure market. Now, in 2022, it’s the market. But, Spotify continuously downplays the value of music streamed on their service, implying that musicians are lucky they’re even getting paid at all. Daniel Ek, meanwhile, has raked in over $3 billion.


Of course, Spotify didn’t invent the exploitation of artists for profit. However, it’s the largest platform with the lowest payout.


So where does that leave musicians?


The indie musician experience

In an article by musician Sadie Dupris, one artist stated, “Every stream of my songs—that I have to pay a PR person to help push for me—could potentially also be food in my mouth or gas in my car. But at the rate of pay and the confusing tiered revenue share, I might only be able to afford a Twix bar and a single ride on the subway.”


They go on to say, “I could potentially take my music off of Spotify, but I’d then be missing out on the largest listener base on the planet.”


Just how large is Spotify? Well, it’s about 6 million artists deep. How many generate over $1,000 in royalties? 184,500.


So, during a global pandemic, (no touring, no shows, no revenue gained), which can easily be prolonged by, oh, I don’t know, a podcast that spreads misinformation about vaccines, it can be very bleak for 97% of artists with music on Spotify.


What can we, as consumers do?

Buy music from platforms like Bandcamp. Because remember, streaming platforms take a cut of revenue. Labels, even indies, take their cut too. Bandcamp has special Fridays where 100% of royalties goes directly to those involved.


Use other streaming services, like Apple Music and Tidal. Admittedly, they aren’t much better with payout, but they are better.


Support physical media. Order vinyl, CDs, cassettes, merch.


Tell your friends. More fans only help. Because, listen: There’s more power in consumerism than people think. Imagine what would happen if one day, people just stopped using Spotify.


Spotify and Apple Music pay out so little that Ye decided to take his new Donda 2 album onto its own player.


Photo via Jason Leung