Spotify Says They ‘Created a Marketplace’ for Musicians. An Artist With 1.1 Million Spotify Followers Responds.

Gareth Emery

Gareth Emery

In a Friday investor presentation, Spotify executive Troy Carter declared that “most of the artists’ reservations [about Spotify] have been addressed.”  CEO Daniel Ek pointed to a thriving marketplace between artists and fans.  But is any of that really true?

The following comes from Gareth Emery, a UK-based DJ with more than 1.1 million Spotify followers.  He regularly receives millions of streams a month, yet he told DMN he receives a check of a few thousand pounds monthly — sometimes paid more than a year later.  In total, the artist says Spotify accounts for less than 1% of his total earnings.  Here, Emery reacts to Spotify’s bold claims that the platform has created a viable, sustainable marketplace for musicians.

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“At Spotify’s Investor Day, CEO Daniel Ek says he has created a two-sided marketplace for both fans and artists. However, talking from the point of view of an artist with over a million monthly listeners on the platform, this hasn’t turned out to be the case.”

When Spotify starts trading on the New York Stock Exchange, I’m sure it will be hugely profitable for the venture capitalists, Spotify shareholders, and major record labels that have backed it over the years. However, you won’t find much celebration from artists themselves, who once again find themselves at the back of the line for payment of their work after the music industry monopolies have cashed in. It’s madness.

Spotify has always been run for the benefit of the major record labels – all of which are shareholders – whilst artists get crumbs from the table.

The whole system is cloaked in secrecy, nobody knows how much they’re going to get paid or when.  It can take over a year to get paid for a stream, and up to two years. Even with over a million listeners, and tens of millions of streams, I couldn’t rely on Spotify for an income — so it blows my mind how smaller artists are supposed to manage?

“I have a million monthly listeners on Spotify and I couldn’t rely on it for an income, it probably makes up less than one percent of my income. Touring is the only reliable way an artist can make money these days.”

The problem with the music industry is that it never really adapted to the internet. Twenty years ago, when Napster came along, the music business was completely disrupted by the online world. We very quickly went from CDs to various iterations of digital downloads, and now onto streaming. However, while the way fans consumed music has changed, artists’ compensation is stuck in the dark ages.

We have a system set up in the days of jukeboxes and sheet music, and it takes a year or more before an artist gets paid for a stream of their music. This isn’t just an issue with Spotify, all the major streaming sites have the same problem. Not only this, the amount paid is tiny – and nobody can tell me how much one stream of one of my tracks is worth. Very little is the answer. I have a million monthly listeners on Spotify and I couldn’t rely on it for an income, it probably makes up less than one percent of my income. Touring is the only reliable way an artist can make money these days.

“The real people benefiting are the shareholders, and these shareholders include all the major record labels.”

But there’s no lack of money in the system. Spotify yesterday said it enjoyed €4.09 billion in revenues last year. It even boasted that gross margins increased by 14% to 21% thanks to “new licensing deals with music rights holders” – i.e. paying the artists even less than before. The real people benefiting are the shareholders, and these shareholders include all the major record labels.

The whole system is an unsustainable mess. You’ve got companies like Spotify, who are selling an intangible product with virtually no delivery costs, yet still lose more and more money each year. That in alone is madness. Then, when you factor that the people that actually create the product (artists) get almost nothing, you realize the current music streaming industry is an elaborate smoke & mirrors system where all the money conveniently ends up with intermediaries and middleman: the world’s major record labels.

We need to smash the old system, disrupt the hell out of it, and build a new music industry from the ground up: and that is exactly what we’re doing to do.

 


Gareth Emery is also the founder of an Ethereum-based streaming music platform called Choon.  More on that here

35 Responses

  1. Anonymous

    What’s his royalty rate with his label(s)? Why’s he get paid late? Distro or Spotify?

    I’m not defending Spotify here necessarily but it’s getting really obnoxious how a supposed music industry site repeatedly takes quotes at face value and/or leaves out pertinent information to feed their bias.

    Probably why this site is the laughing stock of the industry.

    Reply
    • Anon

      Exactly. Thank you for pointing this out.

      With independent artists distributed through TuneCore, we see more than “a couple thousand” come in on a monthly basis who have less than half the amount of followers (which doesn’t imply streams) as he does.

      The payouts come within 3 months – not a year like he’s suggesting. My guess is his label is dropping the ball and then blaming Spotify.

      It’s hard to read these articles – seems like a joke.

      Reply
      • Caleb Ely

        Tunecore stole 9000.00 of my money. Excuse “ oh the password was changed “ who in the hell changed it ????? Was not me , they also conveniently did not have access to new password. Tunecore is nothing but a rip off.

        Reply
  2. Jane

    It would great if DMN could get a direct interview with someone at Spotify & Universal, Sony, etc to ask why they pay writers so little & when are they going to address this issue, the other issues & so on & so on & so on.

    Reply
    • Remi Swierczek

      UMG is leading the the band. Only Warner exhibits some signs of own creativity.
      All of them are bunch of golf playing old farts eating old goodwill and cleaning bow ties for next Grammys!

      Reply
  3. Anubis Grey

    “We need to smash the old system, disrupt the hell out of it, and build a new music industry from the ground up: and that is exactly what we’re doing to do.”

    How, and when? Where do I sign up!!

    Reply
    • Owen

      The problem is that the ‘ground-up’ approach always ends up being a top-down one: build a massive software platform, chase user growth, make deals with labels, figure it out later. We are taking the ground up approach at Lowground Records; make music, get it to fans, treat them well.

      Then again, I have no interest in disrupting a whole industry, just making part of it better.

      Reply
  4. Alex

    “Gareth Emery is also the founder of an Ethereum-based streaming music platform called Choon. ” – hmm. No bias here.

    Reply
  5. Roger Scott Craig

    My “Come together” campaign almost ten years ago suggested Artists and songwriters come together and build their own platform, eliminating all the middle men. Having the support of people in the Beatles, Beach Boys and many other bands as well as the largest Union for musicians in the world was a good start. But when I asked the musicians to provide funds for this new platform I got little support. Musicians have only themselves to blame for this new music industry -they sat around and did nothing to create a better platform and help fix our business and now their is little point in recording new music. Go get a real job if you want to feed your family!

    Reply
    • Blobbo

      I don’t understand why the deep pockets stars don’t do this. They’ll; see more of their own money. On top of that, there are tons of developers who would do this site, and they can always just take a percentage off the top for creating the site. It could even be a sliding scale downward over five years etc.

      You’re not telling the whole picture. Irving Azoff is trying to create an alternate universe for musicians. Everyone wants it. It should be happening.

      Reply
      • Anonymous

        Yeah what if like Jay Z, Madonna, Kanye, White Stripes dude, Rihanna and a bunch of other artists came together to launch a music service, it would totally definitely work

        Reply
        • Remi

          I agree! …but they are the well fed by live and ad deals BLIND (and/or cocky/stupid) DRIVERS of music hunger games!
          …and because of that old farts at labels will continue to play golf, flirt with upcoming new stars and wait for next Grammy event.
          In the meantime Google, Amazon, Spoofy and few more will use music as a FERTILIZER on their ad, retail and streaming FARMS for FREE.

          Reply
  6. 1982

    Founder – Choon is deluded. Does he think the 160 million people will go from Spotify to Choon?

    Reply
    • Anonymous

      They can go and take a hike! Spotify in current mode and their 160M active users RAPE music business and musicians.

      Reply
      • t wilson

        Yeah, you’re right Anon, with the help of the major labels&goldman sachs…

        Reply
  7. Versus

    “a viable, sustainable marketplace for musicians”

    You mean that musicians are for sale there, like slaves?

    Reply
  8. Greg

    1.1 million monthly listeners…not 1.1 million followers, right? BIG difference in the Spotify world.

    Reply
  9. Art

    Is there any group or forum that is driving a constructive conversation around how to make is possible for some musicians to make a living creating music? I mean my 26 year old son makes a 6 figured salary playing video games that are steamed over youtube (yeah, I think it’s bizarre too). After being educated by him I read about a “video game championship” event that sold out Madison Square Garden.

    My point of this is this video game thing started with the Internet, it didn’t carry any pre-internet baggage. There must be some way we can re-image the music industry so people can make a living from it.

    Reply
  10. Joseph K

    I’d love to see Gareth Emery’s contracts with his record labels.

    I bet the labels are paying out a paltry 15% of what Spotify sends them monthly. Then the labels have to figure out percentages for the other artists involved with the production. Emery’s not getting the full 15%. Emery might be getting 5% or 3% or less. The labels hold on to the money for a year, just like in the old days. It’s in the contract, I bet.

    Say that Emery receives $4000 a month (“a few thousand”) on one of these contracts. The record labels get nearly $120,000 a month. This is common practice for people who sign lousy contracts.

    But somehow this is all Spotify’s fault.

    Right?

    Reply
  11. curious

    for years I have read artist moaning about ‘how little’ they are paid per stream. I’ve never seen anyone profer what they think they SHOULD be paid. Come on Andy, you obviously know all about this – what do you think you should be paid for one complete stream of one of your tracks?

    Reply
    • Daft

      How about 1 cent? What is so hard about seeing that the majors have successfully co-oped this platform to the point where even simple, completely rational requests are lambasted by internet trolls?

      Reply
        • Blobbo

          He answered your question ahole. My guess is you’re a secretary or peon at a lable, and NOT a creator. We don’t need middlemen like you and your bosses running around changing the focus of the debate.

          Reply
          • um

            no, no he didn’t.
            &
            thanks for the baseless speculation as to my identity & name calling. it all helps contribute to the healthy debate and move the industry forward.

      • Joseph K

        There’s a number of services that pay more than a penny per stream. You’d know that if you actually had music out there.

        Reply
        • Blobbo

          Oh puhlease. Name which ones. None of the ones I can think of do. More lies again from the employees of the overlords.

          Reply
          • Joseph K

            December 2017 data:

            Amazon Music Unlimited paid almost a penny and a half a stream for plays in the US.

            Apple Music paid over a penny and a half a stream for plays in the UK.

            Deezer paid over a penny a stream for plays in Serbia.

            Google Play paid over a penny a stream for plays in Denmark.

            Microsoft Groove paid over 5 cents a stream for plays in the US.

            That’s just a quick look through my Excel sheets. Far from comprehensive.

            Lots of other country-specific payouts were very close to a penny a stream.

            You don’t know what you’re talking about, so shut the fuck up.

  12. Shlomo

    Hidden agendas from both Troy and Gareth. Troy is a slime ball for sure. Gareth doesn’t have a clue about blockchain but is doing an ICO. Time will tell

    Article doesn’t exactly mention how Spotify is a 2 sided marketplace. Their acquisition of Soundtrap was never mentioned.

    DMN is a real shit show

    Reply
  13. Anonamouse

    This is a Bull*** article btw. Gareth Emery has not got “…more than 1.1 million Spotify followers”

    Check his Spotify profile he only has 133,000 Followers on Spotify, so yeah him getting a few thousand pounds a month sounds about right especially as hes signed to a label (Armada) and it will depend on his deal with them, and like a poster said hes launching his own Ethereum powered project ….

    The side of this is how much do Superstar DJs like him pay for performance of other peoples music during their sets at Festivals to 10k or 20K people @ $100 a ticket … i bet that rate would make Spotify’s £0.003 ave rate per person per stream look very generous … just saying

    Reply
  14. Daniel Everyman

    Spotify accounts for less than 1% of his income?
    He’s earning “a few thousand pounds a month”
    Let’s say £3,000 a month from Spotify. This is 1%? So he’s making £300,000 per month? £3,600,000 per year?

    Oh…

    Reply
  15. MaDrone

    corporational feudalism
    nothing ever changes
    stop selling your music
    lol

    Reply

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