Spotify has been having a very bad 2022, and a growing group of musicians are happy about that.
The music streaming platform’s stock plunged 10% on Wednesday evening after its guidance for the current quarter fell just short of expectations. But the earnings miss was just another blow to the company that has found itself mired in drama and bad press over the broadcast of COVID-19 misinformation by podcaster Joe Rogan, who has a $100 million contract with Spotify.
Major musical artists like Neil Young, Joni Mitchell, Graham Nash, and India Arie have successfully demanded the removal of their music from Spotify to protest the company’s support of Rogan, who has also made controversial statements about race. Spotify lost more than $2 billion in market value after it removed Neil Young’s catalog from its platform.
Now a group of artists, largely represented by the Union of Musicians and Allied Workers, are hoping that they can catapult the public energy around Rogan into a larger campaign about Spotify’s treatment of artists in general.
They’re asking that users who want to support musicians listen to them on platforms like Apple Music or TIDAL, which pay more to artists per stream.
“We’re grateful that Neil Young was able to cause this critical mass and get all of this attention on Spotify. That’s making our boycott effort possible,” Max Collins of the band Eve 6 told Fortune. “It’s making people more receptive to our message, but at the same time it obscures the more interesting and devastating story, which is Spotify’s predatory business practices.”
It also brings attention to Spotify’s massive payouts to big-name podcasters like Rogan; Prince Harry and wife Meghan, the Duchess of Sussex; and Barack and Michelle Obama compared to stagnant pay for musicians, he said.
Collins’ band is joining a growing movement of artists calling foul on what they call the streaming service’s secretive deals with large record labels to work around paying artists.
In Britain, more than 150 artists, including stars like Paul McCartney, Kate Bush and Sting, signed a letter asking Prime Minister Boris Johnson for reforms in the streaming economy.
“I think it’s harder for artists now, unfortunately. It’s such a small percentage,” McCartney said during a recent episode of the BBC Radio 4 program, The Price of Song.
Spotify, which now has 356 million global users and around the 158 million paying subscribers, paid more than $5 billion to music rights holders in 2020. But artists argue that the money isn’t fairly distributed and that playlist features and algorithmic recommendations lead to an echo chamber for popular artists while leaving niche artists at a financial disadvantage.
One of Spotify’s core goals is to give “a million creative artists the opportunity to live off their art.” But the musician’s union says that Spotify pays artists an average of $.0038 per stream. Therefore, for a musician to earn $15 an hour over a month, Spotify users would need to stream his or her music nearly 658,000 times (and multiples of that amount for a band).
As COVID-19 enters its third year, working musicians, who made much of their income through live shows, are still struggling. In response to that struggle, the musician’s union asked Spotify to temporarily increase payout per stream to one penny and to be transparent about their dealings with record labels that often own the rights to artists’ music and negotiate their own contracts with the streaming platform.
In 2020, overall music revenue increased 9.2% over 2019 to $12.2 billion, according to the latest available Recording Industry Association of America data. Streaming is now the primary mode of music consumption in the U.S., accounting for 83% of recorded music revenues. Artists say they deserve to see more money from that growth.
The Union of Musicians and Allied Workers says its looking “to tackle the inequality of corporate power in the streaming environment and seek to build solidarity with other workers engaged in this struggle.”
Spotify responded with the launch of a new website, “Loud and Clear,” which offered information on artist revenue generation and gave an overview of music streaming.
“Fans will ultimately decide who thrives,” Spotify CEO Daniel Ek in a Twitter thread. “We know we have more work to do, but we’re confident in what we’ve built and the innovations we continue to deliver for artists & fans.”
Spotify did not raise payout rates or meet any of musician union’s demands. The website also revealed that of Spotify’s millions of artists, noted the union, just 13,400 made more than $50,000 in royalties in 2020.
“The company consistently deflects blame onto others for systems it has itself built, and from which it has created its nearly $70 billion valuation,” the union wrote on Twitter.
And while Apple has increased its streaming payout to one cent per song, Spotify refuses to budge.
Collins of Eve 6 told Fortune that his band generates about 1.3 million streams each month, but most of the money from those streams goes to Sony–the label that owns the rights to his band’s masters. Collins and his bandmates earn under $5,000 each month in total.
Artists like Eve 6 are also unable to control whether their music streams on Spotify, but they can control the images on their display page. The Eve 6 banner image now says “delete Spotify” in bold lettering.
