Text by Trichordist
The single biggest problem with Spotify (and other services like it) is that they have completely removed the relationship between the artists and the fan. The labels have leveraged their catalogs as an asset in exchange for equity shares in a tech start up that is subsidized by the artists. And to be clear, that is equity that the labels are not “sharing” with the artists who are making the equity possible. We’re not even sure how this could be legal, but we’ll leave that to the lawyers to figure out.
The second problem is that the money the consumer pays, does not pay the artists the consumer is supporting. The model for Spotify and others is to divide the total pool of revenue by the total number of streams and pay out the revenue on a per stream basis. But that is not the same as a directing each consumers payments only to the artists that consumer is streaming.
So in two very important ways the relationship between the fan and the artist has been broken by completely disconnecting compensation from consumption.
There’s a very simple fix, per stream retail pricing. We are NOT supporting the notion that 150 streams should equal one song download. However for the purposes of this writing that’s where we’re going to start. We feel that Billboard has grossly undervalued the cost of a stream, but we’ll get to that later…
