Radiohead Producer Calls Spotify ‘Greedy,’ ‘Divisive,’ ‘Clever’…

So what happens to high-profile, streaming holdouts?  In 2013, they get bulliedshouted down by fanboys, and professionally discredited by the companies themselves (please see: Pandora).

Nigel Godrich, longtime Radiohead producer and now a notorious holdout, doesn’t appear intimidated.  After sharply attacking Spotify for paying ‘fuck all’ to new artists, among other insults, Godrich and Thom Yorke pulled their latest content from the application and started investigating premium outlets like soundhalo.

But Godrich says he isn’t anti-streaming services, just anti- the way streaming exists right now.

“All this is about is the emergence of a universal access to music, which I think is an amazing thing.  I’m not a dinosaur, I know what streaming is, I know how it works more than anybody I’ve met,” Godrich recently told the Guardian.  “And believe me, I’ve done an awful lot of research about it the last few weeks.”

“What we’re prepared to accept, and what could become the norm, is trying to be cemented here. Some people have been greedy and it doesn’t have to be [like that].”

But Godrich is also pulling the scab off an ugly PR and disinformation machine that has now emerged.  Just last month, an email to Digital Music News revealed that Pandora was pulling lots of strings with friendly writers to counter-attack against ‘unfriendly’ artists like Pink Floyd – or, more importantly, be prepared for the ‘next Pink Floyd.’

Spotify seems to have a similar machine at work, with well-groomed cheerleaders like Chester French just one example.  “But Spotify will tell you that if you don’t put your albums on, then your albums won’t sell,” Godrich continued, with particular reference to holdouts like the Black Keys and Adele.

“They’re being divisive. These people are very clever. They’re cleverer than me and there’s more of them than me. And they have a lot more money and time than me.”

So is this just a greedy cesspool of half-pennies, or is there hope?  “I’m not claiming to have an answer or that I’m going to start my own streaming [service].  Just come up with something better and it will work better for you in the long term.

“It can be amazing. It can be a genuine technical revolution that allows people to access everything.”

25 Responses

  1. GGG

    What I don’t get about this whole argument is, is there really anyone out there that thinks Spotify has reached its full potential? Not even Spotify admits they’re as optimal as they could/will be.
    So at what point would a streaming service just launch and everyone joins on day one and all the royalties are as high as possible? Never going to happen. It can’t. No matter how good a service is, it will never just start out at that level.
    Also, Thom and Nigel really need to back themselves up by showing some Eraser/Atoms numbers post-take down veruses while it was up. If they clearly are doing as much damage as they say, why would they hide them?

    • Erik P

      That’s why the discussion/argument is good now, so Spotify & other streaming services can get their act together. If we all remained silent things would never change.

      • GGG

        Oh, I agree 100%. But the anti-streaming/anti-Spotify crowd just seems to say “Spotify pays too low so is evil.” And that’s it. If Nigel is for streaming in theory like he says, what is his plan? What’s his idea? If Spotify made an announcement that streams would pay out at over a cent/play if they go to 50-100M paid customers, would he tell all his fans to start streaming or bitch until it got there?

        • Yves Villeneuve

          Let Spotify put it in writing they will pay everyone 1 cent per stream. Until then, they can grow on the backs of investors, not artists. They’ve indicated in a recent Wall Street Journal interview they are inclined to lower royalties, not raise them.
          Solution in the meantime is deliver music to services that pay a minimum of 1 cent for every stream, ad-supported, discounted and premium. If Spotify has a serious glut in artists availability, consumers will flock to services that pay artists a minimum 1 cent for every stream because this is where the smart and influential artists are hanging out.

          • GGG

            Do you have a link to where they said they want to lower royalties?

          • GGG

            Yea…that’s the article I googled to see where he said that, and sorry, he didn’t. Nice try, though.

          • Yves Villeneuve

            Not hard to read the article and come to the conclusion Spotify is inclined to lower royalties from current levels. Only a spinster like yourself would deny it.

          • GGG

            Funny, the single 40+ year old, self-proclaimed homebody calling me a spinster…
            Anyway, no, you are drawing conclusions you want to draw for the sake of an argument. Wanting to lower licensing fees and lowering royalties are not the same thing.

          • Yves Villeneuve

            It still reduces revenues to labels and artists, this is Spotify’s intent. It starts with licensing fees, whatever that is, then follows stream rates if they achieve the bargaining power they want.
            Anyhow, Spotify is not making any promises of increased stream rates to a cent per stream. All you are doing is “hoping” they will increase rates.
            Spotify should grow on the backs of investors, not artists… You seem to disagree. Am I correct? Why can’t other artists follow Yorke’s lead and force change at Spotify and make investors pay for its growth instead of artists? This is Yorke’s solution. Maybe you don’t want change? The less dominant retailers are the more bargaining power artists have. Maybe you don’t understand the economics of negotiation?

          • GGG

            I don’t think they will raise them in the sense of deciding to pay out more. I think they have it worked out that they will go up due to a growth in paid subscribers. I have a feeling the only reason there’s still unlimited free in the US is because they failed to get the numbers they thought they would. The marketing scheme of invite only worked for music nerds like me and some people a level below, but very few casual listeners. They need to step up their marketing, maybe be a little more transparent in how they plan to operate, and in general grow more.
            But it would do them no good to keep existing with everyone hating them for low royalties. Even supporters like me would think it was stupid to lower royalties past 4/10s while the user base grew. And moving up to a penny a play with 50-100M, and eventually more, subscribers (or whatever their business plan is) could be the reasonable goal. So it’s in their math equation moreso than just a decision to raise or lower payouts.

  2. Brian

    This whole thing stinks of when the labels gave too much power to the big box retailers, who trained the public that $9.99 was the most you should ever pay for a CD. Fast-forward through their blunders about digital and streaming and here we are.
    From an economic standpoint, recorded music can’t be de-valued much more. I’m not sure what the solution is, but I do get the sense that they inked these deals with a myopic perspective.

  3. Jason

    So all these streaming services aren’t making any money and want to reduce royalties. Artists aren’t making any money and want more royalities.

    Who ***IS** getting all the money and how do we elinate them?

    • GGG

      I don’t think Spotify wants to reduce royalties. I’m sure they’d be happy with penny/play if they had a certain level of paid users. What that level is, who knows…

    • Joey Flores -

      There are three main entities in the value chain here. The service/compay, the content creators, and consumers. More specifically, there are two types of consumers – paying subscribers and non-paying listeners.
      The companies and artists make pretty solid money from the paying subscribers. The problem is the disproporationate value being given to the free users. They get access to nearly unlimited music with barely any commercials per hour. Monetization of these users is so low that Pandora, Spotify, etc., lose money on them, despite paying practically nothing to the artists. It’s not because money is mysteriously going into the pockets of some other group; the problem is that consumers are getting incredible value without paying anything, including not enduring enough commercials to make this economical for the other parties.

  4. Tune Hunter

    Spotify is en equation with no hope – you cannot give everything to all for nothing or almost nothing! If you do you got communism.
    Mr. Ek with help of Shazam and “machine tune discovery” has been authorized to give away the most of the music! YouTube has same authorization and is equally generous.
    Dear Mr. Keeling,
    We have to wake up and kill or harness to work those “psycho business models” or we will kill the music industry. I can assure you we can start to grow! Lets execute just few ideas that will give us 25% growth in 3 years we will double to 32 billions.
    Google, Shazam, radio operators will help you. Loaded or destitute with proper presentation they will help you, the all love music and the money!

    • Ulrik Hermansen, Airplay Music

      The problem is definitely the business model for streaming. The price for using streaming services was set all too low from start, and now it is impossible to raise prices. Then all loose now – artists do not get paid a reasonable price and streaming services loose money every day.We need new solutions and business models where all work together, to get a fair business out of the music product, that it is such an vital part of many, many people´s life all over the world.

  5. Allan

    My issue with this is that he’s complaining about a company that’s not turning a profit, which makes it hard to call them greedy, doesn’t it? If the issue is with how contracts are signed, or the record labels, then that can be addressed, but going after companies that are trying to provide decent services is idiotic. He should be glad that streaming came around to stop all the pirating which NO ONE was making ANY money off of. Right now whether a person is listening to Spotify, Pandora, Rdio, Deezer, Torch music, or IHeartRadio, at least they’re contirbuting something.

    • Tune Hunter

      I am sorry but you have a nerve to call a total giveaway a “decent service”!
      Spotify is just Turbo Napster blessed by lost and desperate music executives with lack of better ideas to execute!

    • Knob Twiddler

      Stop looking at Spotify through a wage-slaves’ eyes. Take a look at Daniel Ek’s STOCK cash-outs – thats where the real money is – PLENTY of people are getting screwed – but a select few at the top are making BUTT -LOADS of cash from Spotify…and it has nothing to do with royalties.

      This folks is the issue with Spotify.

      And the ones actally making money? …..they’re also the ones that would need to change the system to make it equitable for content creators – but why would they volunteer to leave the top of the mountain? It’s so much easier to shout down your detractors from up there with all the politicians (100% corrupt scumbags across the board) and/or lawyers (enablers of corrupt scumbags).

      If we have a crisis in our economy – it’s a crisis of incentive. At the corporate level, all present economic incentives are based on f%$king people over. You always make more f$%king people over than being honest – a sad reality if our society today.

  6. Just Another Voice in the Crow

    wow … just wow … and not the article, but your responses.
    Spotify’s royalty rate structure, along with Pandora, and my own internet radio station, all pay royalties designed and implemented by the Libraries of Congress via the Digital Millennium Copyright Act of 1996, via the CRB (Copyright Royalty Board – a panel of judges that is part of the Library of Congress – sets the rules for royalty rates).
    March 2013: The New York Post reports that Apple has been seeking to undercut its potential competitors with regard to royalty rates for its rumored streaming music service, currently offering a rate that is just half that paid by Pandora despite rumors that Apple is looking for more flexibility than allowed under the license used by Pandora.
    Companies like Apple, and now radio station ownership groups, are seeking to cut individual deals with content producers as a way around the onerous royalty structures imposed by the government.
    Auto manufacturers have begun weaning us off of cd players in cars. An estimated 300,000+ cars will be sold without CD players by the end of thise year, and that number is expected to jump to 12.1 million automobiles by 2018 according to some industry estimates.
    The age of streaming services has begun. Private business can enter into separate agreements with content owners, despite the mandate from the CRB that
    a couple of good articles/blogs on the subject:
    Music royalties and Pandora’s box
    By James Ledbetter MAY 10, 2013

    Broadcast Law Blog
    Posted at 10:42 PM on October 8, 2012 by David Oxenford
    Chaffetz Bill Introduced in House of Representatives to Adopt 801(b) Standard for Internet Radio Royalty Decisions of Copyright Royalty Board – What’s It All About?

    BOTTOM LINE: the issue of royalties, etc, goes back to two eras that are no longer relevant – the 1930s when radio and records clashed – bringing in the era of BMI/ASCAP etc, and the mid-90s, when Internet based music was just starting to show up on the map, bringing in the era of the CRB and SoundExchange (which if you’re not a member of you’re leaving money at the table).
    What’s really needed is a discussion with government about how to bring all the disparate parts of the industury under the same set of rules. It won’t solve the problem completely however, because some will say that whatever rates exist will be too little, and some will say it’s too much. That’s the way things work.

    • Tune Hunter

      SoundExchange should become a Central Bank of Music NOW!
      All tunes including those delivered by YouTube, iTunes, Spotify and radio should be served from this new central hub of music.

      CBM assigns license plate to each tune – part of it like artist and composer name is constant and part of it liquid based on distribution route.
      Than we convert all discovery services (Shazam, lyrics ID – including GoogleID and “similar tune suggest engines” to mandatory cash registers of music.
      SBM will know the route of every tune and on monthly basis will send a statement to involved parties based on actual involvement.
      Artist and writer first, then the label, radio station (Yes! radio including Pandora – just kill display and allow Shazam to sale you plays! era of no royalties for radio) Shazam, Spotify or Starbacks or iTunes.
      Only then we can do no subscription Spotify – 10 cents for stream #1 and five more streams @ 5 cents will finish rent to own process!

  7. Riddle Me This...

    Who gave Spotify the right to provide on demand music? Hint. It wasn’t congress.

    • Tune Hunter

      Desperate labels without consultation with creators and owners!
      VEVO on YouTube is equaly stupid giveaway model (…we cannot call it business model!)

  8. Barry Coffing

    Spotify and Apple are NOT in the music business or here to save it. Why not create a streaming site that treats the music creators and owners as a partner? Make the Creator revenues a % of total income and as revenues increase for one it increases for all.