A New Musicians' Union Wants Spotify To Pay UpPlay
Back in 2015, the Massachusetts rock band Speedy Ortiz was flying high — at least, for an indie band. They were written up in the New York Times and on NPR. The lead single from their new album “Foil Deer” was racking up streams on Spotify.
The song “Raising the Skate” eventually topped two million streams. Devin McKnight, who was then a guitarist in the band, remembers watching the number tick upwards.
“I was like, ‘Oh, wow, that's that's crazy’,” he recalls. But when he started receiving royalty checks from streaming services like Spotify and Apple, he was disappointed.
“I remember a few times a year, you know, it was like $300 to $400,” McKnight says.
Just a few hundred bucks for millions of streams. Of course, the label had taken a cut, and the money was split between band members. But even before that, McKnight says, the streaming royalties didn’t add up to much.
“I reran the numbers a bunch of times to be like, ‘I wonder what it would be if I got this much of a cut or this much’ — it still just didn't make any difference,” he says. “It's not livable.”
McKnight is one of more than 19,000 music workers who signed a petition demanding that Spotify increase its royalty payments. The Swedish streaming giant has been hailed as a savior of the music industry, helping bring an end to illegal digital downloads by offering paid streaming subscriptions. But musicians have long complained that it’s virtually impossible to earn any meaningful income through streams on Spotify or anywhere else. The company did not return our requests for comment.
In October, the Union of Musicians and Allied Workers launched the petition as part of a campaign called Justice At Spotify. The UMAW is a new group, and not yet an official union, that formed in response to the dire situation many musicians found themselves in when the pandemic hit.
“All live music has ground to a halt,” says Damon Krukowski, a musician and UMAW organizer from Cambridge. “So it’s just thrown into relief the injustice involved in the streaming platform with regard to how it pays musicians.”
The union decided to target Spotify because of its massive reach: more than 300 million monthly users, and offices all over the world, including here in Boston. Their demand? Pay musicians one cent per stream.
It doesn’t sound like much, but “it’s about triple what they pay now, on average,” Krukowski says. “It still wouldn’t be easy to make a living on a penny per stream, but it’s more within reach.”
The group is also advocating for a user-centric model, which would send a person’s subscription payments only to the artists they listen to.
Either scenario would be different than the way Spotify does things now: the company dumps all subscription revenue into one big pot, takes a portion for itself, and ladles out the rest based on each artist’s share of total streams. Most of the money ends up going to the biggest names — the Drakes and Ariana Grandes of the world.
UMAW is also calling for Spotify to be transparent about this payment model, as well as the deals it cuts with labels. The company could not operate without cooperation from the “Big Three” — Sony, Universal and Warner — and there is not much public information about what their contracts entail. And artists say they learn frustratingly little about the math behind their royalty payments.
“It only makes sense if you look at it from the lens of Spotify: ‘How can we pay the least amount possible?’ I mean, there's no other way to interpret such a formula like that,” says George Howard, a professor of music business management at Berklee College of Music.
Howard says that, like many tech companies, Spotify is focused on growing as large as possible, hoping to reward its investors in the future. In the world of venture capital, that means you can have a multibillion-dollar stock market value and still operate at a loss.
“They view artists ... as just a cog, just an input that goes into their systems,” Howard says. “And so there's casualties along the way. And I think people that are in the arts are learning that art and venture capital is an uneasy marriage because they just have two different priorities.”
Spotify has never reported an annual profit, so it’s unlikely to raise payouts to musicians and labels. It may even be looking for ways to cut costs.
Earlier this month, the company debuted a new feature that gives artists a little boost in its playlist algorithm — if they agree to a lower royalty rate. The company says the feature is designed to be accessible to everyone, since it doesn’t require cash up front. And it may indeed end up sending more listeners to smaller artists. But many musicians felt it was just another scheme to pay them less.
The organizers behind Justice at Spotify know they’re up against a powerful adversary. “I would like Spotify to change their business model entirely,” Krukowski says. “Obviously, I doubt they will do that for our sake.”
But he believes the fight is worth it. “We're saying we need a place at [the] table because we don't have one right now,” Krukowski says. “And that alone would be a victory.”
An earlier version of this article incorrectly identified Devin McKnight as Speedy Ortiz's bassist. He was a guitarist. We regret the error.
This article was originally published on November 23, 2020.
This segment aired on November 23, 2020.