What Happened With Spotify? Bringing the Facts Together

As a music fan of a certain age in a profession that discourages use of social media, I have been spared the anxiety and pressure of living my life in public through Twitter, Instagram, Facebook, and everything else. I am privileged to be able to limit my social media consumption to a little bit of news, a little bit of sports, and a whole lot of music journalism and commentary. I often think about the opening of Our Band Could Be Your Life, in which Michael Azerrad describes the scarcity of information we had about our favorite bands in the 1980s and how that meant an issue of Maximum Rock n Roll or a flyer for a Sunday matinee held totemic magic. That was a beautiful thing, but today, I am grateful for being able to know when shows are happening, to learn about records I would not encounter otherwise, and to dial up archival performances from the comfort of my couch. In many ways, we live in a golden age for the passionate music fan.

My bubble burst last week, however, amidst the hurricane of opinion unleashed by Neil Young’s decision to remove his music from Spotify. Young pulled his tunes because the streaming behemoth refused to take action against anti-vaccine comments made by comedian and podcaster Joe Rogan. In 2020, Spotify paid Rogan $100 million to be the exclusive provider of his podcast. Young’s action led to observations about the state of the music industry in general, the relative merits of the major music streaming services, the importance of dropping one’s Spotify subscription, congratulating oneself for dropping one’s Spotify subscription, and on and on. In short, Shakey’s act of political resistance against the world’s most dominant music streaming company gave a bullhorn to the full spectrum of grievances against Spotify for which observers have tried for years to get traction. These communities saw their chance, and they did not miss it.

The volume of information dropped in tiny bites caused me to experience the sort of social media whiplash from which I thought I had insulated myself. I questioned whether I had a responsibility to say or do something, what the response would be to anything I did (assuredly meager, to be sure), to whom in the debate I should listen, and to what this was all going to lead. One solution I settled on was to try to gather the facts about the big questions that found a flashpoint this week. Here are the results of my effort, which is intended to share information from which the reader can form an opinion and act as they see fit.

Did Spotify really pay Joe Rogan $100 million?

Yes. This happened in May 2020 and made Spotify the only streaming service to offer Rogan’s podcast. Ironically, Rogan’s podcast was unavailable through Spotify before the deal was made because Rogan believed Spotify paid content creators too little.

How much do musicians make from streaming services?

This is a matter of some debate and a bit of a moving target. According to a March 2021 article in Forbes, “for 1 million plays of a song, artists receive roughly the following payout from these streaming services: Amazon Music $5,000; Apple Music $5,000-$5,500; Google Play $12,000; Pandora $1,400; YouTube $1,700. At Spotify, which holds upward of 36% of market share and counted 286 million monthly active users in Q1 2020, 1 million streams will net an artist in the $3,000-$6,000 range.”

In June 2021, Free Your Music, a service that lets users share playlists across sharing services, provided some widely circulated figures.

Streaming ServiceAvg. Pay per StreamStreams to Earn $1
Napster$0.01953
Tidal$0.0128480
Apple Music$0.00783136
Deezer$0.0064156
Spotify$0.00437229
Amazon Music$0.00402249
YouTube$0.002570
Pandora$0.00133751

Multiplied by one million, some of Free Your Music’s per-play figures comport neatly with the figures in Forbes, but some are less consistent. At around the same time, an artist whose music is provided by the platforms did some math on his payouts that generally supports the conclusion that of the major streaming services, Tidal and Apple Music are more friendly to artists than is Spotify. Finally, the Union of Musicians and Allied Workers estimates that the average payout per Spotify stream is $0.0038.

How Many Streams Do the Services Deliver?

A lot, according to Statista.com, which reported that Americans alone accounted for over 872 billion streams in 2020. Globally, MRC Data and Billboard report that the total number of song streams in 2021 was 2.74 trillion, which represented a 26.3% increase over 2020. For a sense of scale, about 41.7 million vinyl LPs were sold in the United States in 2021, which was more than double the number in 2020, but that’s .0015% of the song streams of the same year. One caveat for the heads is that the vinyl sales figures here certainly undercount, and may not count at all, the amount of used vinyl sold. Even if we double the vinyl sales figures, they still pale in comparison to the streams.

 Are CDs Making a Comeback?

 One small rabbit hole of the discussion about streaming is about the future of musical as a physical product: whether the vinyl revolution is here to stay, if CDs are poised for a comeback, and if cassettes really are viable. Two charts from the Recording Industry Association of America answer these questions relatively clearly, at least for the near future in the United States. I opted to start both of these charts in 2008, as this appears to be the year in which the volume of music sales peaked in the United States (revenue form those sales was highest in 1999).

The first chart shows total sales of all music by their format. In this chart, CDs are represented by the orange section of the bar. The purple sections are different types of downloads that consumers actually purchased rather than streamed.

The second chart shows revenues from various music formats. The orange section of the bars again represents CDs, and the green areas are different formats of streaming (and cassettes only show up as a tiny sliver of blue in 2008 and 2009, then disappear altogether from the chart). The visible line of dark blue represents vinyl sales.

Tellingly, while the amount of music sold reached a high point in 2008 as a result of consumers purchasing downloads, the money made from the distribution of recorded music is only beginning to creep back toward the amounts made in the glory days of the 1990s. The not-very-secret driver of this economic success is streaming.

Are Other Artists Following Neil Young’s Example?

A few high-profile artists, most notably Joni Mitchell, have followed Neil’s lead by removing their music from Spotify. Additional classic rockers Graham Nash and Nils Lofgren and neo-soul icon India Arie did too, but the list of musicians who have made the plunge stops there as of this writing. Music-loving podcaster Tom Scharpling, whose 2021 autobiography was a national bestseller, pulled his shows from the platform. Academic, author, and podcaster Brene Brown, who recently signed an exclusive contract with Spotify, announced she would stop recording new podcast episodes, then provided a lengthy explanation of her decision. In a different form of protest, the Tanya Donnelly-led Belly changed their Spotify background banner to a graphic of the words DELETE SPOTIFY. On the other hand, some artists have said that they cannot afford to sacrifice even the small amount of income they receive from Spotify streams.

Has This Issue Hurt Spotify?

Judging by its stock price, no. Spotify’s stock took a dive immediately after Young’s announcement on January 24, but share prices had been declining throughout the month. By January 31, Spotify stock had more than made up for the previous week’s losses.

Spotify Stock Value, January 2022

Whether the number of subscribers leaving Spotify makes a dent in the company’s growth remains to be seen. The drumbeat of public concern amplified by media attention and the trickle of artist departures from the platform for a range of reasons, however, suggests that this moment is not over.

What Should I Make of All of This?

The point of this discussion is to provide readers with some facts and pathways for forming their own perspectives on the issues. A few conclusions that can be safely drawn, though, include:

  • The controversy has morphed from being about anti-vax propaganda to more entrenched arguments about the value of music.
  • Artists make much less than one penny per stream from any of the streaming services.
  • The revenues made from consumption of music in the United States is nearing previous highs.
  • The prevalence of music streaming has fundamentally changed the economics of the music industry.
  • Neil Young’s departure opened the floodgates of debate but has not resulted in a tidal wave of artists leaving Spotify.

 

Armed with these facts, we as listeners need to make our own decisions. For Young’s part, his music is still available on Apple Music, and SiriusXM streaming radio brought back its Neil-only channel last week. Tidal rolled out a new set of artist-friendlier policies. Like so much else in this new world, making the right choice for ourselves depends on sifting through the opinion, bluster, and outright deception. In the case of music, While having so many choices is an embarrassment of riches, we must indeed remember to share our good fortune with the artists who make it all possible. Whether by switching streaming services, buying tickets to shows and live streams, or purchasing records, CDs, and merch, we all have a responsibility to ensure that our music dollars find their way into the pockets of the musicians themselves.

Guest written by friend, colleague and fellow music lover, Kevin DeBell.

Kevin is based in Baltimore. Having come of age in the 1980s, he is passionate about the post-punk revolution but has developed an omnivorous musical appetite. His writing tends to explore trends and new directions in modern music.

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