Spotify is trying to 'Reverse Robin Hood' your favorite local band - WXPN | Vinyl At Heart

Independent musicians were dealt a double blow late last month by two developments that will greatly impact how they get paid for and distribute their music. First, we got the news that Bandcamp was bought by Songtradr, who immediately laid off half the Bandcamp staff and instituted changes that are expected to shrink artists’ revenue and editorial exposure. Then came reports that streaming giant Spotify plans to adjust its royalty payments to stop paying millions of artists.

Though Spotify has not made an official comment, leaked reports say the new payment structure will impact specifically artists with songs that get fewer than 1000 streams, transferring their money to a pool shared by the biggest artists and labels in the world. In other words, Spotify is going reverse Robin Hood on the streaming model, taking the pennies earned by your local garage band and kicking them over to Drake and Taylor Swift.

“Spotify is going reverse Robin Hood on the streaming model, taking the pennies earned by your local garage band and kicking them over to Drake and Taylor Swift.”

Both these stories are alarming, and point to a trend whereby corporate interests are trying to close the doors that the democratization of music production technology opened in the 21st century. In today’s streaming economy, the low costs of recording and distributing music, coupled with the advancements in computing power, have made it possible to find audiences for your music without getting signed to a major label. Whereas in “Ye Olde Mall Record Store Days,” retailers might have carried an inventory of 20,000 titles, there are 100,000 new songs added to Spotify daily, and music by The Rolling Stones is just as accessible as music by The Strolling Bones.

Obviously, those songs get different slices of the audience pie as they get placed on playlists or fed algorithmically to different people, but in theory, the songs are equal and accessible to anyone in the world, which was not possible for small artists in the days when physical distribution ruled. And Spotify built its business around paying artists a proportionate amount of revenue for ALL songs and spins. The amount paid out can be almost comically small for local and regional bands. Spotify pays about 1/3 of a penny per spin, which means one thousand spins is about $3 and one million spins is about $3,000. Musicians often joke about the .25 cent checks they receive from the streaming giant, but each of those pennies represents a real listener, someone who might show up to a show, or buy a t-shirt, and most artists want to be on Spotify, if only because it makes their music accessible to the biggest pool of music listeners worldwide.

Who gets to be a “real working artist?”

Spotify’s new proposed changes – slated for the first quarter of 2024 – would stop paying royalties to songs that receive fewer than 1000 spins per year and re-allocate that revenue to a pool to be shared by the biggest corporations and artists on the planet, or as Spotify has been reported as saying, the “real working artists.” Ouch!

This phrase, “the real working artists” demeans millions of artists out there making music while hustling day jobs, shifting the value of tens of millions of songs away from their creators. Many of the local bands you’ve seen or heard on WXPN have music that falls below the threshold of payment Spotify is proposing.  While it’s true that none of these artists are getting rich off their fans’ listening, it’s shocking/not shocking that the people running major music corporations fail to see that these are artists – that they should be compensated for their work, at the same rate as the biggest artists in the world.

“Under the new plans, that $40 million will go back into Spotify’s ‘Streamshare’ royalty pot and be re-distributed amongst the tracks that are… well, more popular,” reports Tim Ingham of Music Business Worldwide.

It is infuriating (if unsurprising) that Spotify feels they are entitled to take this revenue and pass it up to the major label artists and superstars, the artists who are already making millions of dollars from streaming.

Spotify, this feels personal

I’ll break the wall here and share with you my own story, not as a DJ or radio programmer, but as someone who fell in love with music and has been playing in bands for nearly 40 years now.  While I put out a fair share of 45s, cassettes, and CDs over the decades, in the past 10+ years I’ve run a little label called Manic Pop Thrill, which has released music from 6 artists (Cordalene, The Midnight Singers, Saint Small, The People Between, McGowan, The No Good Crowd). We’ve put out a total of about 80 songs—songs written and produced, manufactured, and marketed in the streaming era by my friends and I, on our weekends on laptops and home studios, and sometimes the nicest studios in town.

We’ve played shows, made records and CDs, and distributed this music onto Spotify and other services. Our songs have been streamed on Spotify over 200,000 times! Which sounds like a lot, until you start to dig in deeper. Those 200,000 total spins on Spotify come from around 35,000 total listeners. For those 200,000 streams of listening, we’ve been paid about $600 over the past 5 years. Not a lot, but more than nothing. Those $3 monthly checks don’t change your life, but they do offer validation and hope to millions of artists. And I’d certainly rather my bands use that money to purchase some band Ts or a nice dinner than give Spotify that $600.

Why the Bandcamp news is especially harsh

Bandcamp (until now) has been viewed as a smaller but much more artist-supportive platform.  It’s free to upload your music, you can control the price of your downloads, you can customize your music page and share liner note-esque album credits. Bandcamp takes a 15% commission of sales – except for most First Fridays since the pandemic, when they’ve waived their fees to help artists who were unable to play many gigs in 2020-23. They don’t pay you for spins, so your audience listening is for free, but they also have a feature where you set how many times someone can listen for free. So, after three listens of one of my songs you’ll get a pop-up asking you to consider buying this track—A simple way to remind fans that all artists deserve to be paid for their work.

On Bandcamp, two bands I play in have had around 2,500 spins which has led to selling 120 Downloads to the tune of about $450. Often people ‘overpay’ on $1 track downloads in order to support artists. You can think of Bandcamp as sort of like public radio—you can consume the product for free, but if you really like it, it helps to support it voluntarily through donations. Of the 120 downloads we’ve sold, only about 60 have actually downloaded the songs they bought. The rest are just sending us money to support our art! (Thank you!) Bandcamp was always the quick answer when smaller artists were asked which platform folks should buy their music from. But now, Songtradr is sending signals that the next corporate move will be to squeeze more revenue from artists.

What’s a regional artist (and their fanbase) to do?

There are other elements of Spotify’s proposal that I understand: wanting to clamp down on 31-second songs that are actually white noise (unless you are REALLY into white noise); getting rid of bots that game the system by inflating streaming numbers. But by reaching down to cut out the thousands (OR MILLIONS?) of artists who are sincerely releasing music on Spotify? This is stealing from the poor to give to the rich, it makes my head want to explode.

As of now, the artistic community has been shaking its collective fist at the man, but there’s no real organization around what to do to combat the new Spotify proposal. But the one thing you CAN do as a listener is support the regional artists you love directly: Go to a show if you can; concerts and tours are, more than ever, the way musicians are able to make their art sustainable.  Buy a CD, or vinyl, or a T-shirt. Purchase downloads of their songs. When you stream, think about choosing platforms that support artists: Tidal pays the most, followed by Apple, then Amazon, with Spotify bringing up the rear.

“But the one thing you CAN do as a listener is support the regional artists you love directly.”

Who knows, maybe this Spotify proposal is a fait accompli and no amount of shaking our fists at the man will change things. Or maybe, if enough noise is generated by artists and fans, Spotify will reconsider, and the major labels will realize that squashing the dreams of small artists could also backfire on their plans to discover and grow the next wave of new artists. Maybe Bandcamp’s new owners will realize that their community was built to be of service to musicians, and that part of what they paid for is worth keeping.

In the meantime, I’ll keep filling my late nights and weekends writing, playing, recording, and releasing songs for my newest band, The No Good Crowd—because there is no joy like hearing a song conjured into creation and then shared with others.

And here at WXPN, we’ll never stop working to support artists—from icons and legends to brand new acts from around the block—weaving them into the magic of radio, writing about them online, telling their stories in video, and doing whatever we can to help artists grow and connect to the audiences that need to hear them.

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