Indie labels quitting Spotify. Trouble in paradise?

28 thoughts on “Indie labels quitting Spotify. Trouble in paradise?”

    1. As an indie musician, I have to say I think that’s short-sighted. I feel that the benefit is essentially promotional. Make it easy for people to find your music. If people find it easily through Spotify, great. Getting paid is just a bonus. Whether that’s good or bad, it’s simply the way it is, and that will only grow more true in the future.

  1. I love Spotify for its convenience, but I want to support small and up-and-coming bands, not to mention the tiny record labels that do such a great job of nurturing talent.

    The only way I can see of doing that is to keep on buying CDs and keep on going to gigs.

    Perhaps the Spotify model works for giant artists who have more power in the relationship. But I can completely understand that indie labels and tiny bands have little choice but to go elsewhere.

  2. Music people still not getting it, the only time when you get screwed over by spotify is when you dont put your music on it. Compare it to radio not cd sales dolts. CD sales is a thing of the past anyway.

    1. Yeah sure…it’s “promotion” and “exposure” right. While everyone else (ie labels/Spotify) gets paid, why worry about the artists/bands everyone is listening too. After all, I’m sure they can all live off of $0.0041 per play. Yeah…we’re the ones that don’t “get it”.

  3. No band has ever gotten rich from getting played on radio, and Spotify won’t be any different. If a band (or label) thought that was going to happen, I’m confused. In an industry getting disintermediated by digital faster than any other, why on earth would anyone pull their music and prevent people from discovering it?

    A good percentage of us here at GigaOM are huge music fans, and subscribe to more than one service. Unlike Om, I only use the $5 Spotify service. It’s a try-before-you-buy, and I still use my iTunes account regularly, but that’s mainly because I am subscribed to podcasts like NPR’s World Cafe and Tiny Desk Concerts and KEXP’s Song of the Day. But when it comes to finding out what my friends are listening to and discovering, that’s all Spotify. So if a band’s music isn’t there? I won’t know about it, and they’ll have to hope it pops up on NPR, etc.

    The more services music is on, the more chance there is for listeners to find it and share it with friends via these services and then go and pay for it and go to a show and buy merch, which is where the only real money is now unless you are Lady Gaga anyway. With radio increasingly controlled by conglomerates and satellite, 4 cents an album play on Spotify in hopes of people sharing with friends sounds a lot better than no one hearing it at all.

  4. It seems to me there is a bigger issue at work here. Comparing the streaming service to Radio for the promotion of a band or its song would make sense to me if people still bought whole albums instead what seems to be the trend today. It seems that there is a large shift in how people access music today.

    If you like a song you buy just that song and not the entire album which is great for the consumer but leads to less money for the artist in the end. They might be getting a larger payout per song but the overall income will be lower due to the much lower total song purchased count. This should be a good thing for the quality of the songs released as making fluff songs to fill out an album are not worth the effort now.

    The biggest challenge to the income of the artist is the accessibility and easy of the streaming services. I have to admit I am one that gets the vast majority of my music from a streaming service that helps me find new songs and avoid those I dislike. The effect of this is that I buy considerably less music than I used to. This is not the case for everyone but between my phone, tablet, laptop and computer and the abundance of hots spots there is very few places that having bought the song instead of access the stream is even needed.

    Someone needs to come up with a model that keeps the artists paid for there work at a level that encourages the creation of music, keeps the ease of access and choices and ease of access technology is providing to the consumer and yet does not discourage the consumption of said music. To be honest I do listen to more music now than I used to as I can get a larger variety of music for less money today from the streams but if asked if I would pay more if it payed the artists better the answer would be yes. Would I go back to the cost of buying all the songs that come across the stream, probably not at the level of listening or songs that I do today. Someone smarter than me will hopefully figure this question out.

  5. As a consumer, Spotify has single handedly changed the way I consume music, it has modernised my methodology. It’s interface has enabled, nay empowered me the opportunity to listen to infinitely more music than ever before. The change is that it’s on my terms, I can try anything and everything that is on the service.

    In the last 12 months, since having a Spotify account I have spent more money than ever, even more than when I was buying DJing vinyl on a weekly basis. It’s because of this that I think the removal of such services would be naive, it’s not just promotion to likes of myself, it monetises against the grain of free downloads… This should not be sniffed at.

    It’s important to state that two things have slowed me recently, inflation (less disposable income) and the infuriating monthly 10 hour limit to my account… Test me through increased advertising, not restriction.

    A very interesting question can be raised from another fact dropped within this article. How did Spotify climb to be the second biggest digital revenue generator in the market so quickly? The answer, serious lack of competition. iTunes have an 85% market share, therefore becoming second largest was easy… This is before they even launched their US service. iTunes are a good service to the consumer (I know, I am one), iTunes are (on most occasions) a good customer to their suppliers (I know, I am one)… However, 85% of a market in the hands of one outlet is unhealthy.

  6. Spotify doesn’t have enough ‘back-catalog’ music for my tastes. That might change if the service was attractive to smaller labels or a money-maker for larger ones, but from reading this article it looks like it’s headed in the opposite direction.

  7. Couple of things. First, the Spotify UI is really, really weak.

    There is a LOT of really good music on Spotify but 90% of it will never see the light of day because the UI does not show you anything you haven’t already been deliberately seeking. This is mostly because the UI really only allows you to search, and the downside of well-executed search features (and Spotify’s is indeed very well-executed) is that people typically only listen to the song they searched for and rarely go any deeper into the library beyond their search result. It’s a question of the “task completion” use case vs. the “browse & discover” use case (a very, very important distinction in digital content-land), and users who belong to the former group are rarely profitable.

    If I were to guess, the top 100 or so artists probably account for 90%+ of all listening because most listening is prompted by searches for the most popular, most recent songs. If they are carefully analyzing their listening data without understanding the broader UX context here, they will conclude, perhaps incorrectly, that users are only interested in major label content and so Spotify may therefore decide to not renew with indie labels or otherwise give them short shrift.

    Regrettably, Spotify seems to assume that discovery will take place through the user’s connected social graph, which is quite a leap of faith. It would probably be both cheaper and more effective to showcase a moderately deep editorially-curated iTunes-like microsite within the app to promote songs and artists, particularly from indie artists who few Spotify users are aware of.

    Absent a better UI, I suspect that most listening will correlate very closely with offline because search volume (whether in Google or site search) tends to directly reflect what’s popular offline.

    As an aggregator of content, they don’t really have a sustainable competitive advantage because
    1) the business is at the even greater mercy of the inherent popularity and shelf life of the content that the labels have given them and
    2) the primary value proposition for users is the deep *library* alone–which, again, Spotify doesn’t own–and not the product (whereas Pandora’s product is central to its value proposition)
    3) More hypothetically, the labels could simply license exactly the same content to a competing property with a better UX on the same terms, and siphon away Spotify’s user base.

    1. In markets where Spotify has had a presence for years, there have popped up a number of independent playlist based social music discovery sites for Spotify. Some good, some bad. Expect more and better in the future. Do not assume the people at Spotify are unaware of this.

  8. At Radical, we’ve taken a different approach. While other internet radio services make a symbolic nod toward independent artists by including a few tracks, Radical Indie provides a free, worldwide, full-featured, internet radio service dedicated fully to unsigned musicians and bands to showcase their music, without limitations. Radical Indie is now open for musicians to upload their music in advance of a launch later this year. http://www.radicalindie.com

  9. I buy a lot of music based on what I hear on Spotify. Where bands can make money is by having some stuff on Spotify, and leave the rest for purchase only. Of course, I would rather have ALL their music on spotify so I didn’t have to buy it…

  10. How is 4 cents per album play any different then me buying your CD for $10 bucks on iTunes and then playing it 200 times? Actually in the end, you make more money when I play your music on Spotify then if I had bought your album and played it hundreds of times, so why the whining and complaining? You just want to make all that money up front selling cd’s that people will probably only listen to a few times, that’s all… Sorry I don’t have any sympathy, and after all the money isn’t in selling music any more any way, the money is in live performances, some of the most famous musicians like Lady Gaga have even come out and admitted that… So get your music out there, get a huge following and start making that money selling concert tickets and booking gigs.

  11. Let’s be honest. Spotify is great for consumers. Not so great for artitsts or indie labels. Don’t try and rationalize it as “promotion” or “like radio” because it isn’t. I will bet that most use of the service is not new music/artists (or about turning people on to new acts via direct promotion or quick sampling). And why should I buy the music if I can pay $10 for Spotify and gorge on all the music I want at any time and place?

    Just because we like it as consumers doesn’t make it smart business for artists or labels. Empathize with content creators and you’ll understand their gripes. Not saying they’re on the right side of history but no need to justify our upside by falsely claiming there’s an upside for them.

    Just another nail in the coffin of the traditional music business model.

  12. Because record sales are the ONLY way for artists to make money. And I love how labels are spinning the whole “theres no income for artists.” What a crock of s**t. ARTISTS: CDBaby/Tunecore is your friend. And the whole thing about music not being recorded the way it should be… has anybody heard how awesome and cheat DIY recordings can be?

  13. As a heavy use of Spotify can I ask do acts get paid more by the premium users per play than the free ones? I pay £10 a month so I can synch stuff offline and listen to music on the go. Also I’m starting to think that for the average user this model is a bit of a rip off as they probably won’t add more music a year than they could buy for the £120 sub, especially after they have used the service for a few years.

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