Over the past year, a growing number of artists have decided to withhold their music from Spotify. But is it working?
Boycotting Spotify isn’t a new thing, though the arrival of premium-only streaming services Apple Music and Tidal is making the decision easier. These new streaming platforms gave artists choice, and more importantly, greater certainty of a guaranteed, higher per-stream royalty rate.
Spotify, by contrast, has two different base royalty rates: an ad-supported payout (which is low) and a premium payout (which is better). The arrival of Apple Music and Tidal ushered in something different: a single, higher rate from paying fans. As a result, it’s unsurprising that artists are favoring these streaming sites over Spotify.
But, does excluding an album from Spotify have any impact on the success of the album or the revenue that it earns?
The Premium Factor.
On one hand, limiting an album’s availability limits potential streams, which in turn theoretically results in lower revenue. But on the other hand, excluding a free tier forces music fans to pay for what they listen to. That math is really simple: the artist generally earns more on Apple Music and Tidal, as these services offer a far higher per royalty rate than Spotify’s ad-supported version. And, typically beat Spotify’s ‘blended rate’.
So why not push fans to greener, better-paying pastures?
The Album Factor.
There’s also the negative impact on album sales to consider, especially as the metrics for recognizing an album’s success have changed. Last month, the RIAA announced that streams would count towards Gold and Platinum album status, making the number of streams a determining factor in the success of an album. Skipping Spotify could mean fewer streams, which means it could be more difficult to get a Gold or Platinum status.
But the RIAA isn’t king, and not everyone is following the decree. After the RIAA announcement, Kendrick Lamar’s To Pimp a Butterfly album instantaneously became platinum, and Anthony Tiffith, CEO of Lamar’s label, said
”We don’t stand behind this [RIAA] bs. Ole skool [sic] rules apply, 1 million albums sold is platinum.”
All of which begs the question: does getting a ‘platinum’ status mean anything to the artist anymore? The victory means less, the trophy itself is less respected. And the money is almost always smaller. Streaming has definitely dampened the glory of the ol’ album.
The Chart Factor.
Chart placement is also affected by the sum of streaming numbers. Could boycotting Spotify lessen the chances of getting a number one? Apparently not: artists are still gaining massive success without Spotify. Gwen Stefani withheld her latest album from Spotify and is set for a number 1 charting album. A few weeks back, The 1975 skipped Spotify and bagged themselves a number one album across several countries.
And that doesn’t even include Adele and Taylor Swift, both of whom boycotted Spotify entirely on multiple number one albums.
But, there’s no real way to know whether excluding an album from Spotify affects revenue or success, because you can’t directly compare the results of both scenarios. There’s no A|B testing, only your gut instinct.
The Piracy Factor.
Then, there’s this: by limiting an album’s distribution to paid services, fans are forced to pay for music. That also forces them into the direction of pirating sites. Take Kanye for example: he limited the release of his The Life Of Pablo album to Tidal, which resulted in half a million illegal downloads on the first day.
The Size Factor: does boycotting Spotify work for smaller, unsigned artists?
Probably not, simply because smaller artists don’t have the global fan base enjoyed by superstars. Most smaller, unsigned artists rely upon platforms like Spotify to showcase their work. Also, it’s a way for listeners to discover their music. That’s a critical first step for developing artists, and there’s little reason for an up-and-coming artist to limit the availability of their music.
It’s also another revenue stream, however insignificant the streaming royalty payout is. Something is better than nothing in the initial stages, just like some awareness is better than obscurity.
(Image by free stocks.org, Creative Commons, Public Domain Dedication, cc0 1.0 Universal)
Good article. It should be clarified that Kanye’s TLOP was only available for streaming via TIDAL (no downloads). If it had been available exclusively for streaming AND downloading, the pirating might’ve been less.
” If it had been available exclusively for streaming AND downloading, the pirating might’ve been less.”
Agreed.
If you have something special that has all the elements of a Super Hit then you will benefit from being available on everything and being everywhere..
Paid Streaming, Free Streaming, Paid Downloads, Radio/Broadcast Airplay and
Public Space Play (shopping malls, railway stations, airports etc…).
One super hit song can make you over three million dollars and it can change your life..
For the Super Hit Maker – these are the new golden years of the recorded music business.
If you’re not making hit singles then you’re not going to reap anywhere near the same financial rewards.
I still think iTunes is the number one music store in the world and is the best
music royalty payout partner available to labels, producers and artists.
But the Super Hit maker will benefit by being on Spotify and YouTube as well.. even CDs still make money in some territories..
Of course the tricky bit to all this is knowing whether you have a Super Hit or not..
No one knows until the pubic tell us through their consumption of the song…
“fans are forced to pay for music”? No, fans buy music, that’s why they are called fans.
Does giving away your music work if you’re trying to make a living from music?
No.
Duhh.
I think even the labels are starting to understand this now. If it doesn’t pay, there’s no incentive to do it. Aka F%^& Y&* pay me. The services will drive the bus over a cliff faster than you can say quarterly, and speaking as a producer, they really shouldn’t be entrusted with our music. No one asked them in the first place. And they sure as s%^& didn’t ask us.
It’s interesting to consider who’s really in control of this industry: streaming services, or content owners like labels? (Notice artists didn’t even make it as a choice). Sure, Spotify et. al. will pay the handsome upfront payments, percentage guarantees, and discounted advertising privileges that come with major catalog licensing, but who’s winning the long game here? Fast-forward five years, ten years, and you have a well-entrenched, perhaps dominant category-killer in the streaming market, and you’re calling the shots (and the value of music). That’s a big prize.
And labels, for all of the ‘they aren’t dead!’ rhetoric, aren’t stronger than they used to be, they’re weaker. I’m not one to predict the future in such a foggy war, but I can say how some of the generals are strategizing here.
I agree, very hard to see the future. Always a moving target, though I also agree there are strategic attempts to lock it down. Who will it be? I suppose the saving grace is the three year deal, then it’s back to renegotiate. Classic “content vs distribution”. But muddy with label equity on both sides, and there are those preferential Ad/Equity/Advance deals, that at least some labels recently stated will be shared with artists.
The internet used to feel more exciting. Five years used to be several generations of platforms, but this may be slowing with trends toward monopoly. But even the online plumbing must “adapt” or perish. So there’s still a hope (for some) that something will come and shake things up, like a platform getting into content production (and succeeding), or a label co-op/distribution service. Perhaps some unforseen breakthrough with streaming methods. My half snide guess in ten years, Alphabet will own it all, or at least all of the ads.
I see Remi on here, and while I can’t speak to his model, I agree that the current purveyors of recorded music are throwing away BILLIONS. If this year’s numbers are true.. piracy is up, streaming revenues are down and now even less than vinyl, catalog is outselling new music and so forth, we can only call the status quo one big FAIL because NONE of the promises of a “digital renaissance” were met by the players. I wonder if shareholders feel the same.
With major-label equity stakes of around 17 percent in Spotify, it’s not an either-or situation. The problem is one bus, two steering wheels.
Armless, I suspect it’s a case of yes & no. For a non super hit I think it’s best to focus on iTunes because they are the best music royalty payout partner for independent labels, producers & artists.
If your track goes stratospheric then make sure it’s available everywhere…
How will you really know since you cannot run parallel paths without affecting each path?
“If it had been available exclusively for streaming AND downloading, the pirating might’ve been less.”
That’s blaming the victim. More to the point:
“If intellectual property laws were actually enforced, the pirating might’ve been less.”
The whole “put the music everywhere” theme sounds so 2006. Good for the streaming platforms and THEIR users, but not necessarily good for everyone else, in fact from certain perspectives it’s disastrous to the systemic bottom line.
But hey, if Spotify can’t get EVERY song EVER made, for FREE? Well then the internet might break… or at least Spotify might break.
And this is a problem because?
In making these observations I think its important to use a cross section of artist examples, not just mega artists like Kanye or Gwen.
And, let’s not forget, the DSPs account to the labels NOT the artists, especially when it comes to sharing ad revenue…and, believe me, ALL the DSPs who have an ad-supported model pay a % to the labels. So, especially in the case of a Major-distributed artist, make sure you’re being properly accounted to (odds are, you’re not!).