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Table of Contents
Music/Music Industry/
Spotify
Ahh, do you remember when music was special? When the survey question “how many discs of music have you bought in the last year?” was actually still a thing? Well, I don't. I grew up in a transitional period where everyone had discs, but music storage shifted more and more towards USB drives. So for anything that already existed, you would turn towards your trusty disc rack that had way too many disc cases in it than you could count, but for anything new you would download the digital album, move it onto a 2GB or 4GB USB stick, then plug that into your car. Then in the car you hoped the radio would actually pick up the correct order of the files on the stick, else you'd have to keep skipping around to find the song you wanted. It was a hassle because those radios only had one line of screen and it was used pretty much only to display the name of the current song (and the volume if you changed it). Good times.
But there was a problem - Corporations were bleeding money to piracy, and there is nothing corporations hate more than bleeding money. So, a solution was needed. Pirating is illegal, but how can corporation get people to actually care about this? Turns out, the answer was simple: Cater to people's laziness. For just a small fee every month you can listen to music legally, wherever you go! No more of that “actually having the music on your device” crap, that only takes up storage space and as an iPhone user you'd have to buy a more expensive phone to fit all your files (or you have a phone from any competitor that just lets you insert a multi-terabyte SD card, but even that would still involve getting an SD card). Instead, to listen to your music you now only have to press the “On” button on your mobile data toggle. Or you download the music anyway (which again takes up space in your storage) and you get to listen to that music as long as you keep paying the monthly small Spotify fee. Just amazing.
And… people fell for it! Now, Spotify is ubiquitous and it would be weird not to use it to listen to your music through Spotify. It's just amazing. Honestly, for as much shit as I give to Spotify - I seriously have to express my respect for how you've been able to completely conquer and monopolize/monolithize an industry and getting users so apathetic about anything that isn't immediately their problem. I mean, surely there couldn't be anything wrong with Spotify, right?
I <3 Capitalism
So, back in the day you would have bought a disc, a digital album, a cassette or even a record. This could have been a ~10€ purchase and then you'd stick that into the playback device of your choice and you'd be good to go. So imagine now, you pay 13€ bucks and listen to Artist A exactly one time. Then you log off and don't use Spotify for the rest of the month. Then it's payout time: First things first, Spotify takes a 30% cut for the amazing service they provide you with, and then the remaining 70% should go Artist A, right? That's the fair thing to do, but Spotify is smarter than that.
So.. about Spotify and paying fair royalties. When you listen to music from Artist A, your “listen” is thrown into the pool of all listens out there. This means that if you listen to Artist A once, and you are Artist A's only listener, Artist A will get paid the same as every other Artist on Spotify that had only one listen. Even though you paid the price of what could have been a full CD from Artist A, they now get 0,004€1) and the remaining 2).
The way this works is that the total amount of money collected from end users is, at the end of the month, distributed to all artists equally, proportional to their share in plays. This isn't about how many plays they got in absolute terms, it's about how many plays they got in comparison to everyone else. Example: If 30% of all plays in a month go to Taylor Swift (completely made up number), she will get 30% of the available money. So, regardless of how much you play Artist A, 30% of your money put into the platform will go to Taylor Swift - unless you try to play music from Artist A so many times that Artist A's share of plays begins to eat into other people's shares, which is mathematically impossible to do. That's cool, isn't it? Spotify has - totally non-accidentally - created a zero-sum game that will make everyone pay the big ones while small artists are fighting over the scraps. And the cool thing about not being one of the big artists is that it is essentially impossible to become one, because to do that you would have to the percentage of plays of other artists. If Artist A does somehow win, then that by design means that other artists will get proportionally less plays3).
You can imagine this as trying to sell books from your garage, but you only get 0,004€ per book sale because Amazon is selling the other 99,999999999% of books that are being sold, overall. So even if you are something of a local legend and hold concerts in your hometown with a few thousand listeners from your community, that still only puts you ahead of 0,00000245% of artists on that platform, and therefore you get paid like a 0,00000245%.
Making Spotify a zero-sum game means that it is - by design of the structure - impossible to win, and upward mobility is limited, regardless of the loyalty of a niche community.
Spotify is in the convenient position of who the bigger ones are and, even more importantly, of who the small ones are
Walled garden - Spotify in the convenient position of controlling your entire music library, can take it away from you at any moment; what happens if you stop paying
Doesn't actually defeat piracy