Spotify has announced a new pay transparency initiative, Loud & Clear, which is certainly one of those two things. This comes just days after the “Justice at Spotify” campaign organized worldwide protests outside of the streamer’s offices demanding one cent per stream, transparent contracts, a user-centric payment model, an end to payola, a switch to crediting all labor in recordings, and an end to lawsuits against artists.
Let’s start with the good news: the Loud & Clear website provides a high-level overview of how payments are distributed. While the Big Green Circle declines to get specific, it does include some ballpark numbers, such as that it pays out about 2/3 of its earnings to ‘rights holders’ (more on them later.) There are also some statistics designed to put streaming numbers in context. For example, in 2020 about 13,400 artist catalogues generated at least $50,000 in royalties. Of those, approximately 7,800 catalogues earned more than $100,000, and 870 topped $1 million. Spotify also includes graphs that show these numbers increasing over time. Try not to “ooh” and “ah” too loudly.
Spend more than a few minutes using the Loud & Clear tools, however, and it’s clear that there’s less than meets the eye. To state the obvious, there’s a huge difference between an artist earning $50,000 and an artist’s catalogue garnering the same amount. And that brings us back to those pesky “rights holders,” — the labels, distributors, and aggregators that Spotify pays directly. There’s even a handy-dandy video called “How the Money Flows” which uses elevator music, a relaxing voice, and powerpoint-quality visuals to make the case that artists signed a contract and are getting exactly what they deserve.
“Artists and songwriters choose their rights holders and make agreements on their music,” the video intones, “including giving them permission to deliver it to Spotify.” This is both obviously true and missing the point. The “Justice at Spotify” campaign is demanding a bigger share of the profits, and Spotify is telling them not to worry because their record labels already received a living wage. Of course Spotify isn’t legally obligated to give away more money, which is why the UMAW is organizing protests to create public pressure. With the Loud & Clear initiative, Spotify wants to look like they’re meeting the demands of “Justice at Spotify” without actually doing it.
If Loud & Clear is a half-assed attempt to increase address pay transparency, than their behavior towards the other “Justice at Spotify” demands is utterly ass-free. For example, on the question of one cent per stream (Spotify currently pays some artists as little as $0.0038 per stream, among the lowest rates of any platform), the website says, “In the streaming era, fans do not pay per song so we don’t believe a “per stream” rate is a meaningful number to analyze.” Instead, the company points to the $5 billion it paid out to rights holders in 2020 as evidence that “Spotify generates more money for rights holders than any other streaming service.” As for the other “Justice in Spotify” demands, Loud & Clear is silently opaque. Check out their propaganda explainer on payment below.
Since “Justice at Spotify” launched last fall, Spotify has run quickly in the other direction, and even unveiled a new kind of payola in November by offering to boost artists’ algorithm placement in exchange for reduced royalties. The Big Green Circle also secured a horrifying patent to monitor users’ speech, and announced a new high-fidelity tier and expansion into 80 new markets. Meanwhile, Spotify’s competitors are raising the bar for ethical music consumption. Earlier this month, SoundCloud announced a “fan-powered” royalty payment model, which was designed to meet the needs of independent artists.
