Is Spotify Underpaying Musicians?

Since Spotify’s release, there has been controversy over how much the company is paying its artists. Artists are outraged saying they are not making enough of profit from Spotify to even cover their recording costs.

Some artists have gone as far to say Spotify is no better than a legalized piracy site, because of their allegedly low pay rates. Some artists, especially independent ones, have told they see no difference between the fraction of a penny received per listen on Spotify and consumers just illegally downloading their music for free.

Get spotify premium account free

Spotify officials beg to differ. Compared to other music sites, Spotify pays its musicians pretty well. Officials argue because the payment amounts are so small, it seems like these musicians are being paid a measly wage.

iTunes pays per song download, not per listen. Royalties are paid to the artist’s label for the download and nothing is paid to the artists for consumers to listen to the song. Spotify charges consumers per look, so those pennies start adding up pretty quickly.

Another hole people see in the underpaid musician argument is that Spotify is still a relatively new business. Smaller numbers do not necessarily mean the company is holding back, in fact, what numbers do show is that Spotify pays its artists about 70% of its total revenue.

Spotify’s compensation rates have been increasing too. Since March of 2011 until March of 2012 Spotify’s payouts have increased 250%. This should give frustrated musicians around the world a sigh of relief. It seems more and more this myth about Spotify’s poor pay, is no more than just that, a myth.

Spotify pays compensation for artist work to labels, not musicians. This may explain why musicians feel they’re not getting their share. If their label’s contract demands so much of a single profit, and a band is not aware of this agreement, that can undoubtedly leave musicians with their hands in the air asking, “Where in the world is my money?”

There are no numbers available to say that Spotify most definitely pays significant labels more than indie labels. But that is not the question here. The problem is if Spotify is stiffing its musicians and the answer is, probably not.

Major and indie labels alike may be holding back money from their artists. There may also be a pay difference between primary and indie labels. Major labels may make Spotify more money, and by default, contracts more payment.

The acquisition that Spotify does not pay its artists fairly is untrue. Spotify wants to make music accessible to everyone. Music cannot continue if there are no musicians to play it. The company wants to succeed; it can’t do that by screwing its product out of pay.

The reason people have been seemingly getting so upset is due to Spotify’s pay being small and incremental and a story that was written out of context. This put people in a huff and started problems and the pointing of fingers. This is not fair for a young, and so far successful, company trying to put an end to piracy.

Music is about love, passion, and involvement. Creator and founder Daniel Ek wanted Spotify to provide people with reliable, high quality music that they could afford. Afterall, that’s why piracy sites got so popular, music sites like iTunes were outrageously priced.

Music is beautiful. It opens our real emotions to the world, embraces love and compassion and exiles our negative feelings of hate and anger. Spotify loves its musicians and music. The company wants to do well by them. Keeping consumers and musicians happy is a delicate balance, but it’s essential to placate both sides to have a successful business like Spotify.

Leave a Reply

Your email address will not be published. Required fields are marked *