So, what DOES Spotify pay artists, anyway? That may be the most important question right now, and according to U2 manager Paul McGuinness, ‘insufficient transparency‘ and guessing-game payouts have caused damage with the artist community.
Then again, Spotify is honest enough for McGuinness, who publicly offered his endorsement in front of a Midem crowd over the weekend. “I see no reason why the Spotify model should not be part of the future,” McGuinness remarked. “It is essentially honest so it’s to be encouraged. I’d like to see it adopted everywhere, quite honestly.”
Ultimately, that’s a nod from one of the biggest bands in the world. But what’s the difference between ‘honest’ and ‘essentially honest,’ anyway? This is more than just a nuance, and McGuinness blamed both labels and Spotify for creating secretive, confidential deals that ultimately created problems with the artistic community. “Spotify has yet to become popular with artists because artists don’t see the financial benefit of working with Spotify,” the manager continued. “That’s partly the fault of the labels, and the labels partly own Spotify. And there’s insufficient transparency.”
But wait: what about the artists and indie labels that are looking at their statements, and making direct comparisons to places like iTunes? That’s what STHoldings did prior to pulling hundreds of member labels off the service, though McGuinness regards Spotify as largely having a promotional – not monetary – benefit. “Is [Spotify] a means of monetizing distribution for product or is it promotional?” McGuinness posed. “At the moment I’m inclined to treat it as promotional. If we have to choose where to put records on their debut we’re unlikely to give it to Spotify. I’d rather give it to a DJ on a great station.”