Why don't indie labels quit Spotify?
If the lowest paying, biggest streamer is so bad for independent music, is there a world where it can be boycotted by the labels?
The story of Spotify – soundtracked by ‘The Imperial March’, with $0.003 of every stream shared between John Williams and his publishers – received 30 new chapters it didn’t want this year in the form of Liz Pelly’s book Mood Machine: The Rise of Spotify and the Costs of the Perfect Playlist. It’s a grisly read as Pelly investigates the platform’s practices, burrowing deep beneath what we already know (that they don’t pay artists properly) into how its algorithms and their own cynically commissioned music, bought on the cheap and prioritised in your next aggressively peddled Supermarket Wave playlist, are reshaping our listening habits and encouraging artists to produce their own music that’s equally as vapid in order to compete. “Our only competition is silence,” Spotify founder and CEO Daniel Ek once said. It doesn’t matter what you’re listening to as long as you’re listening, although Spotify would much rather it be a playlist so bland you forgot it was on, made of musak they paid a flat fee for, rather than Adele or Taylor Swift or anyone else. Better still, make it a podcast, the company’s other great pivot: shows not produced by Spotify receive no income from the platform whatsoever, and instead compete with one another in the external scrum of audio advertising and coveted show-host read-ins.
Ek has known all about digital advertising for a long time, and Mood Machine talks of his original plan for Spotify to be a movie streaming platform that would serve as a place to sell online ads. The size of the files soon proved to be too large, and so Daniel Ek the Music Fan was born. Sometimes it takes a story like that to realise the nothingness of a name – indeed, ‘Spotify’ scans just as well for an app that’s going to revolutionise movie streaming or dog grooming as much as it does music.
But now that Liz Pelly’s extensive report is out there, an electric question of ‘what now?’ hangs in the air. With all that muck raked, has the question of ‘what will it take for labels to boycott Spotify’ been answered? Independent labels, in particular.
For obvious reasons, the narrative has always been that the scourge of streaming has decimated indies whilst lining the pockets of the majors. Mainstream artists are traditionally favoured by platforms and their major record labels received huge amounts of money to sign up to Ek’s crazy new idea in 2008 – lump sums that didn’t need to be shared with the rosters they were about to start licensing. It stands to reason that at the other end of the spectrum are smaller labels and smaller artists, a majority of them unable to support themselves on Spotify’s ‘stack ‘em high, sell ‘em cheap’ rates, where earning $50k (£38k) isn’t out of the question, as long as you receive around 25 million streams. Or that number multiplied by everyone in the band if they all want to get paid. It’s clearly not working for the vast majority, so why don’t indie labels boycott the platform until it agrees fairer rates and practices?
Questions like this have a habit of appearing overly simplistic and more than a little naive. Underneath it all the answer is almost always simple too, but as catch-all as ‘late-stage capitalism’ has become for everything that’s shitty in the world, it’s also used as a response to shut down any discussion, thought and action to implement change.
When I asked the question to Christof Ellinghaus, founder and owner of Berlin-based independent label City Slang since 1990, he slowly repeated it back to me. “Good question,” he then said. “Because for some of us it’s making loads of money. It’s introduced the long tail. Your record was dead and now people are streaming it after 20 years.” He pointed to Franz Ferdinand as an example of a band whose new songs don’t need to stream in the millions because their old ones do. “Or look at Arctic Monkeys,” he said. “They’ve got 54 million monthly listeners. That’s a LOT of money. I mean, Laurence [Bell, Domino Recordings’ founding owner, who releases both bands] keeps coming up with good stuff, so that’s a bad example, but City Slang is a good example. We have released loads of records that didn’t go anywhere in the last 18 months, just fell flat.”
Ellinghaus’ point is that catalogue is king in the world of streaming, and also that not all labels – indie or otherwise – have catalogues that are equal in size or monetary value. Naturally, labels of different sizes will feel differently about what’s on offer from Spotify, and when we’re talking about “indie labels”, those sizes range from the biggest of them all, Beggars Group (home to XL, Rough Trade, 4AD, Matador and Young, and therefore big streaming records by Adele, Radiohead and Bon Iver), through well established large-to-midsize labels like Sub Pop, Heavenly and Ninja Tune, on to your favourite DIY labels operating from home.
Clearly, not all indies are fighting the same fight, but it’s alarming that a company like City Slang, with a catalogue that’s 35 years deep, has been so negatively affected by Spotify, who Ellinghaus calls “uniquely evil”. Half of the company’s income now comes from streaming, and Ellinghaus estimates that of the 3400 songs currently on all platforms, 75% of City Slang’s digital income is generated by 400-500 of them. “82% of our digital income is older than 18 months,” he added, “so that means that anything we do in the frontline business makes a teenager contribution to our bottom line. And it now takes 5 years if you want to break a band. And that’s if everything aligns. Some big indie labels are doing great – are they having fun with their new bands? No, not at all.”
It sounds like a familiar story for the MD of an established independent label based in London that I also spoke to. “Spotify is not there to help us break artists,” they said. “Especially artists that require more of a ‘lean-in’, conscious mindset from someone trying to understand where they’re coming from. I mean, Spotify have said that – I’ve been in many a room with them where they’ve said, ‘you need to prove to us that your artist already has an existing audience for us to support them, because we’re a data company. We’re not going to build that audience for you.’” Spotify has always done irony well.
“But I think there’s a misconception that majors are inside the room with Spotify and independents are outside banging on the door,” noted the MD. “Because really I don’t think the majors are in either. The only thing that Spotify is interested in serving is Spotify. I don’t think they’re interested in serving any artist, to be honest.”
At first, Ellinghaus rejected licensing his artists to the platform. “And then in 2012, I budged,” he said with an air of deep regret. “We fucked up. I think we all fucked up. It was a grave mistake to give these people our music. They’re not partners. They dominate us, they control us.
“What do I do?” he asked. “I’m sat here with all of this frustration and there’s nothing I can do. I can’t turn to my bands and say I’m going to remove all of your music from Apple and Spotify. And my bands go, ‘you had one job, and that’s not it!’”
He’s right of course. Every label has artists who make more through streaming than others – removing your entire catalogue to renegotiate terms would be more financially destructive to some, albeit in an attempt to get a better deal for all. Besides, even if every independent record label boycotted Spotify in unison, Ellinghaus isn’t convinced that it would put enough pressure on the platform to act: “There’d still be 70% of the world’s music left, or 65%. Maybe people wouldn’t even notice anymore because they are used to staring at their phones and getting whatever is coming out of their phones anyway.”
Much smaller labels, like Glasgow’s Night School, catch a perverse break when it comes to artists consenting to their music not being served to streamers. As founder Michael Kasparis said, after I asked if he’d find it harder to sign bands if Night School refused to release its artists on streaming platforms, “The type of music and artists we generally work with have an antagonistic attitude towards the whole of streaming culture. Honestly I’ve had more conversations with artists where I’ve said, ‘happy to not put it on streaming, but it might mean we never break even.’”
The typical thinking of artists who don’t make a living off their work is that streaming services’ paltry fees won’t be hugely missed, although Kasparis gave me a reluctant response when I asked if Spotify has worked for him in any meaningful way. “Yes, I have to somewhat sadly answer. There are some releases where we don’t sell out the vinyl release that end up doing well on streaming and it means the project ends up breaking even or in some small profit. It’s also important to acknowledge that physical media is expensive and getting worse, so there’s an economic argument that if you’re poor, paying £10 a month for a streaming site means you have access to this culture that would be gate kept by your own lack of funds. I think it still has a negative, corrosive effect on music in general, though.”
The London-based MD believes the answer isn’t to replace Spotify, but to offer an alternative, built by independent labels coming together: “I think it’s better to focus energy on building something new rather than destroy something that ultimately doesn’t give a shit about you.” If I was Daniel Ek, this would be my biggest fear; for labels and artists to refocus their anger and stop fighting a battle he knows they can’t win yet distracts from a real solution.
“I think we have to assume that Spotify is not going away,” said the MD, “and so therefore there is more urgency for an alternative. You can keep delivering music to Spotify because it’s there if people discover it by some fluke algorithm, but we need to not rely on it as the sole platform to market your music. Just having new independent music on Spotify is not working right now.”
An alternative platform would need to “support discoverability, have a curatorial aspect to it, and a community aspect as well,” they said. “As an independent label we would need to go back to how it started, with niche communities, and scenes, and club nights, and fanzines. The ethos that surrounds those more old school, real life scene-building things, how can that be transferred onto a platform? Like, what if a streaming platform was embedded into Pitchfork or Loud And Quiet? People are screaming out for curation. Maybe that’s the utopian dream, but it shouldn’t be too crazy.”
It’s early days for a new platform called Nina Protocol, but music fans and artists have been getting increasingly excited about what it could offer – a streaming service and online record store where artists keep 100% of their sales, where listeners’ data can’t be sold or exploited without their consent, due to the site being built on decentralised Web3 and blockchain technology. Nina also makes use of staff picks and community interaction, and isn’t a million miles away from Bandcamp, which has become the preferred post-pandemic platform for a majority of independent artists, including New Yorker Caroline Rose, who this year chose to keep their new album Year of the Slug off of all streamers apart from Bandcamp. “Even if Spotify and other streaming services paid decent wages, or any wages that aren't a complete slap in the face, I still would have put it out on Bandcamp,” Rose told me via email. “It's the closest modern version, albeit digital, we have of sifting through a random record bin or buying tapes from a thrift store. I miss musical discoveries.” She says the experience has been “hands down a financial success”, although notes that it might not have been if she hadn’t made Year of the Slug for free on the GarageBand app. It recalls last year’s runaway success of Cindy Lee’s album Diamond Jubilee – an anti-streaming record that was originally released via a geocities site and Youtube, and has since been added to Bandcamp but no other platform. Both records prove that artists can find success without playing the Spotify lottery, but it would be disingenuous to suggest that everyone can pull a Cindy Lee and become Pitchfork’s Album of the Year simply by rejecting today’s most common means of music distribution – as excellent as that record is, the off-trend novelty of its release played its part in the buzz too, not to mention Cindy Lee’s previous expertise in world-building.
Unlike Christof Ellinghaus, I think collective action from independent labels would have a huge impact on Spotify, causing even casual music fans to realise just how much of their favourite music has been made outside of major labels, if it were suddenly to be unavailable. But it’s not something we’re likely to see put to the test anytime soon. Probably ever.
The suggestion of a replacement feels more plausible and like a better use of everyone’s time. Like how users don’t bank on Twitter anymore but feel there’s no harm in dropping a link on there in case by some miracle it takes off on a slow news day for conspiracy theories. “I think it won’t be long before even the majors start to think about what they do as an alternative,” the independent MD also told me. “I don’t feel like the music industry is bright for any label at Spotify.”
Ek might get his movie streaming experience after all – the part where studios realised that instead of licensing their films to Netflix they could build their own Disney Plus, Paramount Plus, BritBox and so on. If Ellinghaus is right and there’s plenty of major label music to keep Spotify users happy without the need for indies – and if those majors are no more in the room with Spotify than the independents are – how long before they launch their own platform(s) too?
You have to wonder if Ek would very much like that. A man who seems increasingly intent on not paying anyone anything.
Great article. It certainly underlined for me the reasons why I never use Spotify. I think it would be interesting to see what effect a boycott by indie labels would have, but I fear not much good would come of it and, like you, I don't see it happening. An alternative platform would be something I could get behind, however, even if I prefer downloading whole albums from Bandcamp to streaming. If it helped support more independent artists I might be willing to give it a try. Talking of Bandcamp, I always struggle to understand why many indie artists seem to prefer releasing their music for download through Amazon Music rather than Bandcamp, and I stopped using Amazon nearly 10 years ago.
It would be interesting also to consider this question from the point of view of bands, as well as from labels. For a lot of smaller bands - say, those receiving <100k average plays per track - the streaming revenue will always be terrible, but (and I say this cautiously) Spotify's easy access means it can potentially be a good marketing tool, particularly helping sell tickets to gigs and merch?