The Spotify Debate: Six Essential Truths

The Spotify Debate: Six Essential Truths

We’re not going back to hard copies. Voguish as vinyl and cassettes currently are, the streaming genie is not going back in the lamp. Any criticism of Spotify that doesn’t involve consideration of how streaming content will work fairly in the future is dead on arrival.

As go recordings, so will go all other media. Right now, each industry is having its own growing pains with digital distribution, but ultimately, distinctions among industries are going to diminish. On the Internet, a “book” is just a collection of information that you read differently than an “album.” All content is moving into the cloud, and it’s going to become more and more difficult to discuss streaming music without also discussing streaming television and streaming text.

Case in point: the universal upfront-cost problem. A major objection being raised by Spotify’s discontents is that because Spotify’s current terms generate higher payouts (both per-play and total) for established artists, it’s hard for developing artists to fund recordings. This objection is a little disingenuous, because it’s not like up-and-coming bands were ever routinely getting fat advances to fund fancy studio shenanigans—but it does speak to the larger truth that in the online era, production companies are a weaker link in the creative cycle, so their profit margins have dropped and they are less able to serve their traditional function of fronting royalties to fund the costs of creating new work. It’s unclear where those funds will come from in the future of music, and that’s also an issue being faced by authors and filmmakers. Will Kickstarter be the future? Will the costs of creation drop so dramatically due to digital technology that artists can fund their own productions? Who knows?

Overall, the online era has vastly widened the gateway for new artists. Yes, new artists were better off in the old system…if they landed record contracts. If they didn’t, they were pretty much S.O.L. There’s a reason why the number of records released each year continues to increase, and the reason is that artists no longer require record contracts to record and distribute their music. That means there are a lot of new artists who are making jack squat, but lower barriers to entry mean that many, many more artists can make their music widely available and have meaningful—if not particularly remunerative—careers.

A pay-for-play differential could work, and will probably happen. Remember when the iTunes store first opened, and Apple swore all songs would always be the same price? Eventually they caved and allowed variable song-by-song pricing, and everybody basically went on about their business. I buy a $9.99 premium membership on Spotify, which means I pay roughly a penny per song-stream. It’s not hard to imagine Spotify getting away with charging twice that (look at what people are paying now for cable TV packages, for God’s sake), with Jay-Z tracks costing, say, three cents a play, and songs by indie artists costing, say, a penny a play. Artists could set their own prices, as they now do when selling their music through their own sites.

There needs to be centralization of some sort, or everyone loses. As more people get on Spotify, it becomes easier for artists and audiences to connect. Whether I want to listen to Pink Floyd or Peter Wolf Crier, I can do so using the same app. New bands can just say from the stage, “Hey, we’re [band name]. You can hear our record on Spotify.” Boom: a hundred people can add the band’s music to their playlists right there on the spot. If online streaming moves in the direction of a fragmented system rather than a consolidated system, it makes it harder to listen to music—and fewer people will. Is Spotify the best possible way to do that right now? Absolutely not, but it’s sure not the worst. If artists and streaming services can come to some reasonable agreements about technology and compensation, life can continue to get better for both bands and fans.

Jay Gabler