Spotify has revolutionized the music industry - it's a fact, not an opinion. I couldn't help falling in love with it at the very first glance. It brings tens of millions of instantaneously available songs, personalized recommendations, dedicated apps for every platform I use, a variety of cheap subscription options. Sounds almost too good to be true.

But ... Over time, it's becoming more and more apparent that ... while being a fulfillment of my wildest audio-maniacal dreams, at the same time, it's crippling the music industry somehow. The intention to treat all the music creators in the very same way appeared very fair, democratic, and just - but surprisingly, it has significant adverse (& potentially permanent) effects.

That is what this blog post is all about.

It's all about money (surprise, surprise)

I like the concept of a free market (supposedly able to "regulate itself"). How the imbalance of demand and supply drives the prices. How the "invisible hand" forces making economically-justified decisions. How objectively good products that fit market demand are more likely to survive and succeed, etc. That's why Spotify's model for compensating artists appeals to me in all its simplicity (link):

  1. first, they calculate the portion of their income (based on paying users, but also ads presented to non-paying users) earmarked for payouts to artists
  2. next, they split it proportionally to the popularity of each artist's tracks (how extensively it was streamed within a period of time); if you were streamed twice as much as X, you should get twice as many dead American presidents as X, capisci paisan?

It seems fair - doesn't it?

The access to content is (supposedly) equal, regardless of the author, origin, or genre. These are the enthusiastic listeners' reactions that drive the popularity of creations. So, the good content gets recommended (via word of mouth, sharing, putting it in playlists) & climbs in the popularity rankings, attracting even more listeners and consequently increasing artist's earnings. At the other end of the spectrum: well, no one wants to waste time on consuming dull and uninspired stuff, so no payouts for its creators. Better luck next time.

Popularity as a measure of quality

However, music is a form of expression that belongs to the category we call 'art'. And this b*tch is so hard to qualify and quantify.

Its 'consumption' is a very personal matter, and it differs from individual to individual. Various feelings and sentiments are involved. Frequently it's nearly impossible to clarify why we like or dislike a particular artist or even a single song. Bah, music tends to play very different roles in our lives. For some, it's an ever-present sonic background of their existence, while others do not pay much attention as long as the genre is about right.

That's why the fundamental laws of economics simply do not apply here unconditionally.

Let's clarify where's the actual catch:

  • mainstream music reaches crazy-sick audiences, so from the perspective of its creators (at least the ones at the top), everything is pretty much okay
  • but niche music genres have a significantly smaller reach (literally by levels of magnitude); it doesn't mean they are 'bad' (/worse), less inspiring, or cannot have a significant impact on culture and society in the future - they just fit the tastes of smaller groups of people, with specific preferences and interests

The disproportions between the popularity of mainstream and niche music (on streaming services like Spotify) are so significant that these days it's pretty much impossible to make a living as a creator who belongs to the latter group (w/o other sources of income). The issue was partially visible even in pre-COVID times, but it's the pandemic and the general ban on people's gatherings (and music events in particular) that has made it much more urgent and impactful.

Why so? The disproportions between gig audiences for mainstream and niche artists are far smaller than the disproportions in music streaming volumes. A respected niche artist with a dedicated pool of fans was easily able to fill the concert venues (and collect decent money due to ticket sales). Obviously not as big as Wembley Stadium, but:

  1. only 10-100 times smaller
  2. (s)he could compensate with the frequency of events and the length of tours

Side-note: The funny thing is that even if the most popular mainstream artists collect the lion's share of the streaming music money pool, ... their popularity helps them gain other, much more profitable revenue streams: ad campaigns for biggest concerns, their own (fashion/media/...) brands, even record labels. Basically, the smartest ones (of the most popular ones) can multiply their income because of the sheer influence gained by making popular music.

(sorry, too many off-topics)

Common pool as an issue

So (clearly) the proportional, democratic model doesn't work (well) - at least for this particular branch of entertainment. But hopefully, there are some possible adjustments possible that could fix this situation, right?

Well, unless you're okay with sacrificing the diversity (by letting the mainstream starve the niches) ... This status quo will obviously result in undermining the progressive, explorative trends that in the longer term enrich the mainstream (e.g., by inspiring more popular artists or spawning even more creative mix-ins of genres). Because economic reasoning favors safe choices targeted at increasing the reach and appealing to massive audience (yes, it's not trivial either, I know) over the experimentation and following the purely artistic inspiration.

Some would say - in such case why don't we replicate the mechanisms used in progressive tax systems? For instance: the income pool share could still be proportional to the popularity but flattened by applying the logarithmic (instead of linear) scale (with some constant multiplier). Well, this is not realistic for one simple reason - the moguls of the market have a too strong position to let it happen. A group of powerful "top league" artists could exit and create a musical service pretty much by themselves (that has happened once already ... ref: Tidal). I believe that many listeners would follow.

A different ... product?

But there's a better option: to treat niche music as - well, a completely separate product. With a different consumption (& pricing) model, for a different customer who is pickier, more opinionated, probably more demanding - and (what may be even more crucial), is willing to pay for those privileges.

Looking from my personal perspective - I'm keen on such 'exotic' music genres as:

  • new age
  • progressive black metal
  • instrumental post-black metal
  • acoustic dark/neo-folk
  • dark ambient/synth

No Beyonce, Lady Gaga, or another Taylor Swift could substitute those for me. So I'm far more interested in direct compensation (paying for particular albums/songs) to the creators within that (very specific, I agree) niche, than in subsidizing the general pool and hoping that my stream consumption activity will improve the standing of my favorite artists.

Yes, it may appear as a step back in digital media evolution (we were paying for individual songs/albums when iTunes was a thing), but from my perspective this model is simply more practical - because it's more coherent with my intentions (as a paying client). I'd like to pay for what I consume EXACTLY, not for a service subscription that covers all the sh*t I don't care (but the overwhelming majority does).

Fortunately, I'm not the first one to notice this need. The good news is that such services do exist already - one of them (my favorite one) is called Bandcamp. So the next time you learn about the premiere of an album recorded by one of your favorite bands, consider whether it's better (for BOTH you and the band)

  • to look for it in the general streaming service
  • or maybe it's worth an additional pay that would go (in much bigger part) directly to the band

This way of thinking is ... hard. Because why would one even consider paying (additionally, and more!) for something you may already have in your subscription. However, it makes much more sense if you re-consider all the implications I've mentioned above.

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