Spotify’s Chairman Has “Zero Understanding” of Why Artists Are “Complaining”

…from a little-read interview with Spotify chairman Martin Lorentzon, conducted back in November by Swedish magazine SvD Näringsliv.

  • Save


[interview excerpt, translated from Swedish]

SvD: Is growing artist discontent a risk for Spotify?

Lorentzon: No, Spotify’s risk comes from other things.  And I have zero understanding of the complaints.  Just look at the amount of money we’re paying out.  It isn’t crumbs.

“We’ve reversed a music industry in freefall through blood, sweat, and tears, and we’re handing money back to the record industry.  All the while, music has been completely free to steal or do whatever you want with it, from the Pirate Bay, SoundCloud, Youtube or Grooveshark.”

68 Responses

        • Remi Swierczek

          Both, you the YES guys and Spotify big boy are full of crap.

          Spotify pays out 1/100 of actual value of music.

          Most important, it PREVENTS normal monetization of music by logical and obvious to an idiot opportunities.

          There is no reason to continue with sub supported streaming or YouTube grotesque! Music will be much better off with Radio, streaming, bars, clubs and ELEVATORS converted to music stores.

          • Anonymous

            “Both, you the YES guys and Spotify big boy are full of crap”

            Yes, Spotify failed and it’s time to move on.

            My money is on one of the upcoming YouTube alternatives.

          • so

            Spotify pays on average about 5 times more than YouTube. And only time will tell if YouTube’s music subscription service is an attempt to placate major labels (“Hey look, we gave it a shot”) or a serious business. Given their track record, my money’s on the former.

        • Paul Resnikoff

          “We’ve reversed a music industry…

          It’s not an accurate statement. If something is reversed, it heads in the opposite direction (so if it’s going down, it starts going up; if it’s headed South, then the direction changes to North, etc).

          In most countries, music revenues are falling, in some cases quite severely (ie, not ‘reversing’). In certain countries like Spain (and perhaps Italy), severe declines have bottomed out, but not ‘reversed’. In Sweden and Norway, long regarded as exemplars of streaming ‘reversals,’ what we’re actually seeing is a bottoming, a plateauing at some far lower level (not a bounce-back). In 2014, both Sweden and Norway experienced small declines.

          Essentially, what Spotify and other streaming services have done is (a) reduce piracy levels, and (b) reduce the free-fall, revenue bleeding in recorded music. They have not increased other forms of music consumption, or at the very least, there is no evidence that they have. And they have drastically reduced earnings for songwriters.

          Sadly, this ‘reversal’ has mostly funneled royalties into the coffers a very small number of companies, executives, and investors. Not to the broader industry population of artists, smaller labels, etc.

          • Remi Swierczek

            All inclusive, on demand streaming regardless of ad or subscription monetization model is PREVENTING normal monetization of MUSIC.
            Unless they can charge $29.99 a month and force half a billion humans to do so they are WORTHLESS.

            As is global income limit of TURBO-NAPSTERS is at just $25B in 2025 w/ one condition:
            Apple’s dead-Beats cranking a miracle. 100M x 6.99 x 12 = $8.4B or 1/3 of the global plateau above.

            MIRACLE WILL NOT HAPPEN. Can someone talk to me? Larry Page is my first choice.

            It is not to difficult to contain the music, make it a merchandise again, convert all of Radio and all of streaming to simple discovery based music store. $100B industry by 2020 with potential to cruise to mid $250B

          • Remi Swierczek

            As a reminder: inflation adjusted 1999=$56B (FIFTY SIX BILLION) & we are still waiting for IFPI 2014 decline to $13B something.

            UMG is behind current acid induced cruise to the cliff.

            I would hope for some honor and self-respect. It’s time for productive action before Apple deadBeats will shrink forever and freeze for your business at $20B

            Dear Mr. Grainge & Mr. Keeling PLEASE DO NOT KILL MUSIC INDUSTRY!

          • Jamie Armstrong


            Streaming is growing to scale. From 2010-2013, Pandora’s cost of revenue (royalties paid) increased by 431%. They are projected to hit $1 billion this year, if so, royalty payments will grow proportionally. It’s about scale and time.

            How could the music industry become a $100 billion dollar industry when it only accounted for $16 billion in its prime?

          • Remi Swierczek

            1999 CDs generated $40B dollars and that number after inflation adjustment would be $56B today.
            In next few week IFPI will publish 2014 decline to $13B something.
            Pandora can be a $5B US or $10B+ global music store. Today Pandora just like YouTube with hideous VEVO and Spotify are turbocharged music goodwill PULVERIZERS.

            You billion from Pandora still keeps global total under $25B in 2025.

            There is so much to gain from conversion of music to merchandise that I am confused why labels are still in the stampede to all inclusive streaming swamp. There is no money there. The behave like stupid sheep!

          • Jamie Armstrong

            In 1999, the IFPI revealed that revenue was $27.8 billion adjusted to the 2012 exchange rate. What are your numbers based on?

            Pandora has to be global to make a global difference. It’s only in Australia and New Zealand. The digital millennium copyright act limits it from becoming global.

            How can Pandora be a superstore when consumers hardly buy music from the largest music retailer – iTunes?

            I agree music is a product, however consumers want the access based model (streaming) not a physical or digital product.

            Still confused by your claim.

          • Remi Swierczek

            Radio or streaming display will not show the name of the artist or the name of the tune unless it is part of your legal “certified” playlist. Then you force Shazams and lyrics id services to purchase only mode.

            You car radio became “music store” elevator became a music store, all Starbacks became a music stores also Pandora without help of Shazam you could press thumbs up or down or just “add to the playlist” @ 39¢ to make it simple music store.

            Nature of digital media calls for instant criminalization of Shazam, Soundhound, Google Voice Search and just few more music and lyric ID services. In current mode they are just philanthropists giving away someones property to FREELOADING public.

            I prefer: unpaid PIMPS of free music pleasure! Go and learn from prostitution – both PIMP and sex provider gets compensation!

            Here is $38B for 1999

          • bizguy

            The music industry has been leveraging the government for years. Maybe every soul that can hear sound would pay a yearly “Music License” tax – They could model it after this cute thing called a “TV License” that’s used in the United Kingdom. Every year you give the government £145 / $224 and they you the BBC

          • jaqbly

            At least spotify pays them money, because i will just download it if i cant hear it for free ( paid for by sponser) on spotify. By the taylor swift i have all your albums now and i didnt pay a dime for them. thank for pulling your music off spotify, see you could of got paid for it.

    • Musician Who Understands

      Paul Resnicoff

      “We’ve reversed a music industry…

      It’s not an accurate statement. If something is reversed, it heads in the opposite direction (so if it’s going down, it starts going up; if it’s headed South, then the direction changes to North, etc)…..

      They have not increased other forms of music consumption, or at the very least, there is no evidence that they have. And they have drastically reduced earnings for songwriters.”

      You might want to learn to read your OWN articles and graphs, Paul.

      In your own article, which you titled: “After Years of Recovery, Music Sales Are Now Declining In Sweden… ” posted on February 3rd, even YOU noted that Sweden’s record business had seen years of recovery (that’s another synonym for “reversal,” FYI…) since Spotify’s introduction there.

      The graph you provided even showed a full reversal of the declining trend, with record sales actually INCREASING in Sweden between 2011 and 2013.

      • lol apples and poop

        … all fifteen of the artist that together make up Sweden’s “music industry”…

  1. dave chappelle

    It blows my mind how even this blog fails to grasp the very basics of the music industry. Spotify doesn’t make deals with artists. They make deals with labels. If you’re an artist and you don’t think you’re getting enough money from Spotify, then you need to sit down with your label. That’s who pays you. That’s who gets the money. That’s who you signed a contract with. This isn’t complicated; the chairman is totally right.

    • Bandit

      I wouldn’t go so far as to say “the chairman is totally right.”

      True spotify pays the labels and the labels screw the artists but when he says “We reversed a music industry in freefall…” it makes me wonder what economics theory he is using to base that statement on

      • jaqbly

        spotify paid 2 billion in revenue, i would say they reversed the decline. Its simple math

    • Myles

      Both the interviewer and Lorentzon talk about “artists” and “rights holders” as if they are the same thing. Which as you point out they are most often not the same thing.

      Of course Lorentzon can’t tell artists to go complain to your record label.

    • Faza (TCM)

      In a word: bull.

      For starters, Spotify only makes deals with labels if there’s a label involved – it’s perfectly possible (and quite commonplace, nowadays) for an unsigned artist to have music on Spotify, usually through a rights aggregator. The percentage of revenue taken by the aggregator as payment is known in advance and tends to be around 10% or less (as little as 0% in the case of Tunecore).

      Regardless of individual arrangements, the bare-bones facts on the ground is that Spotify pays fractions of a penny per play. It cannot pay out any more because its business model is rubbish. You might think those tenths of a penny will add up to something substantial if you get enough plays, but you’re only kidding yourself. There’s a fixed amount of money to go around and getting more plays just means one of two things:
      a. someone else is getting less money (because people are playing your songs instead of theirs and you can count on a role-reversal in the near future),
      b. each play is worth less, meaning you get the same amount of money for more plays.

      Spotify may think they’re paying out lots of money, but that money is going towards damn nearly the whole product of global recording industry (several decades worth of it). Considering what Spotify is getting in return, it is peanuts.

      Lorentzon may yet regret the line about reversing music industry freefall, because it’s likely that Spotify will become a key contributor to a new round of freefall in the future. Already we’re seeing declines in digital revenues and my predicition is that they will accelerate over the next couple of years, all things being equal (quite simply, because once you have Spotify, you don’t need to buy any music that is on the service).

      It’s telling that he trots out the “but, piracy” line. Make no mistake, it’s the ol’ “you need exposure” in a new guise. If piracy is the only reason Spotify can be seen as a viable model, it should die quickly and put itself out of our misery.

      • Sarah

        Nice explanation of the problems with Spotify’s business model.

        I don’t think streaming itself is a problem at all – it’s simply a different form of delivery. The problem is the “all-you-can-eat consumption for a fixed subscription price and/or merely ad revenue” business model for streaming services – it just cannot pay well for artists, so it’s a bad model. Heck, it can’t even pay well for the service – Spotify is not profitable, it’s running on investor money.

      • HeyZeus

        If you don’t like what you get from Spotify, do not make your music available on Spotify. Simple really unless, you didn’t negotiate well with your label.

        • Anonymous

          “If you don’t like what you get from Spotify, do not make your music available on Spotify”

          Best comment yet.

          Not that it was necessary — people are leaving already…

          • R.S.

            It’s not our decision as artists. It’s our label’s decision . They are the rights holders.

      • Sam

        Ha! The “but piracy” thing is hilarious. Spotify pays ALMOST the same as some dude stealing my music pays me. I’d rather have the dude steal my shit. At least THAT isn’t shoving money into the pockets of a bunch of tech shitheads who know as much about music as I know about being a tech shithead.

        I’m not anti-streaming. I AM anti- tech shitheads making money from giving my shit away for free to entitled punks who “demand” it instead of requiring a god damn subscription.

        Just quit being dicks. That goes for the tech shitheads AND you little fucks who defend consuming all the music you want for free by parotting back whatever your friends told you to say on facebook.

        Anyone who won’t pay for a subscription – fuck ’em. They’re the same douchebags who sneak into the back door of the venue, sit their freeloading ass in one bar stool while putting their feet up on another, talk someone into buying them a drink, steal a t-shirt on the way out, then going home and post about what a super-fan they are. THAT is what we get exposed to with all this great exposure. I have zero concern for those people’s “right” to whatever they want.

        • Bandit

          VC mantra “tech shitheads making money from giving my shit away for free”

    • Anonymous

      Could it be the case that BOTH labels and Spotify are pushing practices that are bad for the actual artists?

      The artists could have bad deals with their labels AND the amounts spotify pays out for songs could be too low because of the sheer number of people those payments get spread amongst. This isn’t as simple as saying “Spotify sucks” or “Spotify pays out enough” – there are a number of players here and they each bring their own potential problems.

      For instance, part of the compensation major labels get from spotify is equity in Spotify. So they make their music available, and in exchange labels get both royalties from streams AND equity; the artists only get the royalties though, not any interest in the equity, right? And of course, because equity is a form of compensation, the fact that they received it was absolutely a factor in the labels agreeing to accept the particular terms for streaming royalties. So in this case both Spotify and the labels could be considered as acting to the detriment of individual artists – saying one of them does something questionable doesn’t necessarily let the other off the hook.

    • Anonymous

      It blows my mind how even this blog fails to grasp the very basics of the music industry. Spotify doesn’t make deals with artists. They make deals with labels. If you’re an artist and you don’t think you’re getting enough money from Spotify, then you need to sit down with your label. That’s who pays you. That’s who gets the money. That’s who you signed a contract with. This isn’t complicated; the chairman is totally right.

      They dont need to sit down with there label, they need to look in their contract to see where between 0%-15% of the masters their percentage falls, see how much they are giving to their producer, and then look to see if they have an audit clause where they can open the books and look at the figures, then they can see if they are being paid their 5% or whatever it is, and actually, if they even have the wording in the contract that gives them a percentage of master licenses to streaming companies, so it might actually be their lawyer they need to talk to who screwed the deal for them, otherwise its suck it up and deal with it…

  2. AG

    You can complain all you want but if, Spotify and other similar services fight piracy with something accessible to the masses. I understand your anger, but without Spotify or RDIO, nobody would pay a dime. It is most probable that how little or much you receive from these services is more than you were getting from CD sales or downloads; do not lie to yourself with dreams of grandiosity.

  3. jot

    artists should hit up their record labels to inquire about the lack of payments.

    • Versus

      I run the record label. I know how low the pay-outs are for Spotify to our artists.

      • Anonymous

        Then why the fuck are you on Spotify? it’s like complaining about McDonalds being bad for you while snarfing down a fucking Big Mac. Don’t be a dumbshit hypocrite.

  4. GGG

    Honestly, as much as I defend Spotify you shouldn’t be heading a company if you don’t understand a huge chunk of your user base. It’s one thing to say “here’s why they shouldn’t be complaining” and/or “here are some ways we will improve the service.” It’s another to just lack insight or, more likely the case, just dismiss it.

    • Big Swifty

      I agree.

      His “let them eat cake” attitude is a hard sell for any marketing firm

    • GGG

      Well no shit, doesn’t change the fact it’s a stupid thing to say. At least lie and say you’re “exploring options” or whatever bullshit CEOs and people say.

      • Sarah

        Gotta agree. Most companies have the common sense to present a better image, at the least. This is a very interesting approach he’s chosen to take.

      • GGG

        Just so it doesn’t look like I’m talking to myself, someone deleted a comment saying they only care about the biggest artists.

        • GGG

          Well that was your own fault for going off on endless dumb rants for like 3 months.

          Also, me and jw are “in” with Paul? Hahah, you need to pay attention more…

  5. Central Scrutinizer

    I like the photo collage subliminal messaging. It looks like he has green devil horns

  6. JTVDigital

    I too have “zero understanding” why (signed) artists don’t complain to their record label for keeping the money they make from streaming.

    • Paul Resnikoff

      According to my sources, the largest superstar artists get paid from streaming by their major labels, but not in the manner you’d imagine. Instead of getting percentage of a percentage as dictated by a contract, the superstar manager simply demands a pound of flesh for playing nice with streaming platforms. This is a demand based on what they think they should receive and not what the percentage calculation technically dictates.

      So, it’s F–K You, Pay Me this amount, which I’ve determined is good enough, or I’m going to create problems for you. And you need me because I am a superstar.

      Now, if you’re not a superstar, or the label doesn’t need you to make more music and cooperate, then you are not in a position to do this.

      And that, boys and girls, is how you get your major label to pay you.

      • JTVDigital

        It’s exactly how it (unofficially) works.

        However, some of these services have enough leverage / market share for taking the risk to tell them to f_k off.
        Which sometimes results in bad publicity and all the stories that can be read around “streaming is bad”, “streaming doesn’t pay artists fairly”…blablabla.

        But 99% of artists are not superstars and are getting paid as per their contracts (with a % of a % after the advance has been recouped).

        • Remi Swierczek

          Supper stars also LIVE out of LIFE!
          So they are relatively happy and are not ready to fight with slave driver team in our MUSIC HUNGER GAMES.

      • Name2

        How to make money as a music artist:

        1. Become a Zeppelin, Floyd, or Beatles.
        2. ??
        3. Profit!

  7. Anonymous

    Notice he says “we’re handing money back to the record industry”…that does not necessarily translate to artists getting their fair share.

    • smg77

      But that’s not Spotify’s fault. As usual, it’s the greed of the labels that is actually screwing over artists.

      • JTVDigital

        Exactly. And believe it or not (probably not since we are on a blog trolled by streaming haters) there are more and more artists, even indie artists, who make way more money from streams than downloads nowadays.

      • Owner

        It’s the greed of the label’s that is the real problem here. If you want to blame someone, blame the music distributors who take their cut before the label gets paid, oh gets even worse than that, not all but several music distributors out there in the world ‘skim’ from the what is paid to them from the music streaming companies. So the labels don’t even get what they are owed.!!

  8. Willis

    Nobody is forcing artists to have their music on Spotify. If you don’t like the wage you get at a job, you quit and find a new one. Artists need to either take action and remove their music from this and other services like it, or suck it up and stop whining.

    • Paul Resnikoff

      The only problem with that idea is that a pullout only makes sense — or, can be survived — by the largest artists, like Taylor Swift. Any other artist risks banishing themselves into obscurity.

      • Willis

        So, it becomes a pretty easy decision then – either take the path to obscurity or accept what Spotify is offering. I suppose there is a third option – spend millions to build your own site/service that has amassed a similar user base.

  9. DNog

    This guy has been sipping too much of the Kool-Aid he’s been making.

  10. Versus

    This is a fallacious argument. Let’s translate it.

    Premise 1. We exploit your labor, and pay you a fraction of the value of your work.
    Premise 2. The others just steal your labor.
    Conclusion. We are your heroes and saviors.

    • JTVDigital

      A less biased translation could be:
      “We exploit a license that has been granted to us by your employer, and pay out 70% of our revenues to him”

  11. FarePlay

    The sad reality is that Spotify, and so many tech companies like them, decided to get into the content business with very little or no experience in the music business. I knew Mr Ek had no background and before commenting did an online search for Mr. Lorentzon and discovered the same thing. Plus they’re from a foreign country, not known as a music power.

    I do find it interesting that so many hang their hat on Spotify’s impact on piracy, which is still very healthy BTW. Spotify is really built on the Napster Model, only they, Spotify, were able to cut very favorable licensing deals with the major labels, yet are still and may always be struggling for profitability.

    Even their understanding of curation is built on software, distancing themselves even further from the human creative process.

    I Don’t know where Apple/Beats/iTunes is going to end up, but at least they’re bringing seasoned music people into their business and taking some time to try and sort their way through this mess.

    With the exception of SeriousXM, who were serious about getting paid from the beginning, streaming and interactive music streaming in particular has done little more than severly devalue the industry. The number of musicians and songwriters who could earn enough money to live a modest life style are almost gone and the ones who succeed are often better social media marketers than gifted musicians.

  12. LOLcopter

    I think it’s really time to stop assuming all successful artists are on a label. There are plenty of people making money from music that aren’t signed that Spotify does not compensate fairly. Maybe people think that only artists that are successful enough to make money from music have a problem with Spotify because they must be signed, which just isn’t true at all. How can I go to my record label and demand more money when I don’t have one? Do I call UMG to request my fair share of Spotify money when Spotify sends them most of the profits when UMG and I don’t have a contract together? Read the title folks: Why ARTISTS Are Complaining.” We know the labels are keeping most of it but, by that logic, anyone not under a label should get the same cut a label makes and that just simply isn’t what’s happening. The ARTISTS are still getting screwed here regardless of how much money the NOT ARTISTS are making. The problem with Spotify’s compensation is that they focus too much on keeping labels happy and not enough to keep artists happy. That’s not the label’s decision, that’s Spotify’s and apparently the Chairman doesn’t see a problem with his “f*ck-the-little-guy-as-long-as-we-don’t-get-sued-by-the-big-guy” business model. THAT’S why ARTISTS are complaining.

    • JTVDigital

      The only successful artist I’ve heard of who’s not signed on a major record label is Macklemore.
      Artists who don’t want to get tied up by a major shall take some inspiration from his journey.

      Then on the endless Spotify debate…streaming services like Spotify, Deezer…etc are NOT MAKING MONEY, they operate at loss and give the biggest share of their revenue to right holders.
      How are they supposed to increase the payouts?
      The only companies still making very small profits (in %) are major record labels, and not even regularly.

  13. Short Pandora

    I am astounded (well, not really given how easily people’s opinions are manipulated these days) at how many people totally ignorant of the issue make the argument that the problem is with the labels and they should share revenue with artists and songwriters. Here’s the facts. I put out a downloadable CD in 2014 with another musician. We wrote all the songs. We played all the songs. We recorded, mixed and mastered all the songs. we set up the aggregation and distribution ourselves. It cost us $700. Subtract a bit of promo and it cost $500. This includes NOTHING for time spent, recording gear, instruments, etc. Nothing. In short, it simply CANNOT be done for less than we spent. Most indie efforts cost 10 times that much. We do not have a label. All revenues accrue to us and us only.

    Here are the facts:

    At the streaming royalty rate of $0.0008, it would require 625,000 streams to make the $500 back, 875,000 streams to make back the full $700. And that is sharing NOTHING with a label, and receiving zero compensation for our time.

    I know you guys like free music. Who wouldn’t? The problem is simple. The streaming business model is flawed. They are selling goods they do not pay for. The pittance they pay in royalties is worse than nothing. It is an insult. Just enough to let you know you being screwed – legally screwed. It should be obvious to anyone that if they pay out 70% of revenues in royalties, and that does not even come close to covering the cost of the goods they selling (and making huge profits on), then they need to either charge more (WAY more) for advertising, or charge subscriptions and pass every bit of that revenue along to their suppliers (read musicians and songwriters and labels when that applies). Even then, it’s hard to imagine a workable business model. Their only hope, it seems, is to drive a wedge between artists and fans, by propagating lies that brand artists working for free as unreasonable.

    If you don’t give a shit about the fact that artists aren’t being paid, then may I suggest you go into work tomorrow and announce to your boss that you are cool with a 90+% pay cut, and that you can make it up by selling T-shirts.

    Give it time, and the only music you will hear beyond painfully mainstream, lowest-common-denominator songs will be poorly produced garage-band first takes. Sure, you will moan about the loss of quality music like you used to get for free. I assume you will blame the musicians who have no time or resources to write and make the music for you, and of course their “labels” too if any remain. In any case, surely it’s not your fault. You were told what to think by Google, Spotify and Pandora and you dutifully fell in line.

    Stop letting corporate entities shape your opinions. Rely on facts and stop outsourcing your critical thinking. You are being used.


      Thanx for the intelligent response. I am experiencing the same situation as you. There is a B-esser out there stating he’s made more than $27k in a year off of Spotify. If my math is correct ($27,000 / 0.0008) that would equate to more than 33,750,000 hits in one year. Really?! At my age (62), I’m aghast at the blatant deception that some of you younger one’s are purporting as well as the pure corruption. Who on earth do you think you’re fooling? Greed has really done a number.

    • FarePlay

      Short Pandora. A big yes to you. The only thing I would add is that Tech Crunch was the one to revive this “blame all this on the labels” which is partially true, but the reason for their timing isn’t quite so apparent. Google doesn’t like the way things are going with the Congressional Subcommittee looking into copyright reform and they’d just as soon have musicians and songwriters up in arms over the labels,

      Amazingly, the members of this subcommittee get what’s happening and how bad things are out there for individual artists. And there is bi-partisan agreement!! But Google, Spotify, Pandora and the NAB are going to throw everything they have in opposition, Pandora just hired a new lobbying firm, natch, and Google Spends $17 million on lobbyists or so they claim and are major campaign spenders.

      I’m confident that Paul will continue keeping you informed on the bills and petitions you should be aware of, but I suggest you also follow either the Trichordist or Music Technology Policy as well.

      There is a time and a place for everything and now is the time to make the best of a bad situation and maximize whatever revenue that’s up for negotiation with the congress. Now is the time to be aware of the issues that are on the table and seek out opportunities to sign petitions in support of artists. You can start with #IRespectMusic and take it from there.

  14. Jamie Armstrong


    You have lost me. Are you saying the radio or streaming displays do not show the name of the artist or the name of the tune? What is a legal certified playlist?

    Are you also saying users have to use Shazam to find out what music they are listening to on Pandora? Are you also saying that you can’t purchase music on Pandora?

    Thank you for clarifying your 38B.