What artists need to know about Spotify and the major labels
Trying to “win” as an artist on Spotify is akin to trying to win a rigged game.
In this article I am going to show you some interesting facts that solidify this opinion – starting with the obvious stake the labels have in Spotify and how the former hold all the leverage in this business.
In the process of writing this, I have also dug up some very interesting articles that go into further detail on each of these points. All of which are linked and listed at the end of this post.
Spotify’s relationship with the major labels
Did you know that Spotify paid the majors yearly advances to keep their music on the platform?
Pretty much every digital streaming service’s deal with labels (including indies) will contain a combination of a per-stream royalty rate, plus revenue sharing, an advance and minimum guaranteed revenue.
Source: https://www.musicbusinessworldwide.com/sony-we-share-spotify-advances-with-our-artists/
Did you know that the major labels also have an equity stake in Spotify?
The ownership stake the labels have in Spotify has been documented quite heavily.
It’s important for artists to remember this because it should remind them that they don’t have a seat at that table. That’s not an arrangement that was built in their interest.
Here is an article from Music Business Worldside which goes into some detail about those deals.
The majors and their playlists
Below are the names of some of the biggest “independent” playlist brands on Spotify.
Each of which are owned by a major label.
I have linked to their sites so you can scroll to the bottom of them and see for yourself.
The relationship between Spotify and the majors goes even deeper.
The majority of the so-called “editorial” content is shaped by Spotify’s relationships with the major labels and if not directly, then indirectly, a way in which they uphold the marketing agreements within their deals.
Source: https://www.hypebot.com/hypebot/2017/06/secret-lives-of-playlists.html
The fact that the majors own these brands, control what makes it onto those playlists, have ownership, and receive guarantees from Spotify, all goes to show how rigged the Spotify game really is.
And then on top of that, independent artists promote Spotify whenever asked to do so.
Case in point: Spotify Wrapped.
Spotify Wrapped
Every year Spotify sends out social media ready graphics designed to show off the artist’s latest streaming figures to their followers.
All this content is heavily Spotify branded and probably garners them a big boost in brand awareness.
Spotify emails marketing materials to the artists on its platform, then the artist posts those Spotify-branded graphics on their social media channels.
Basically, Spotify taps its artists to do free marketing for them.
A rigged game
My motivation for writing this piece is just to help artists understand that these entities weren’t necessarily designed in their interest, they were designed to take their work and exploit it.
Sources
The Verge — This was Sony Music’s contract with Spotify: https://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract
Hypebot — Not All Spotify Playlists Are Created Equal: An Unedited Look Behind The Green Curtain: https://www.hypebot.com/hypebot/2017/06/secret-lives-of-playlists.html
MBW — Here’s exactly how many shares the major labels and Merlin bought in Spotify – and what those stakes are worth now: https://www.musicbusinessworldwide.com/heres-exactly-how-many-shares-the-major-labels-and-merlin-bought-in-spotify-and-what-we-think-those-stakes-are-worth-now/
The Fader — This Contract Between Sony and Spotify Sheds Light On How Streaming Actually Works https://www.thefader.com/2015/05/19/sony-spotify-contract#:~:text=The%20contract%20between%20Sony%20and,negotiates%20a%20bigger%20advance%20from
Further reading:
