Words by Anthony Thomas
Sweden is the undisputed innovation capital of the world. Sure, just about anyone is capable of inventing something, but the Swedes seem to have a knack for not only inventing cool shit (think the world’s first ice hotel), but also those infinitely handy life-altering things (think the telescope, pacemaker, ultrasound technology, dynamite, IKEA, Skype…the list goes on). So it was only a matter of time, then, before Sweden’s attention turned its gaze to the music industry. The result? One word: Spotify.
It’s no secret that the Internet has revolutionised the way we consume music. With the “Digital Age” now in full swing, traditional mediums (you know…CDs, vinyls, frequenting the opera etc.) are sadly becoming redundant at a rate that shows no sign of slowing. ARIA, optimistically, reports that at least a quarter of those connected to the Internet “access unauthorised material”. It is a figure that has had damning implications on the music industry. Reluctance to fork out increasingly large amounts of cash for CDs paired with the boom in Internet access has pushed music piracy to the forefront of industry issues. Sure, the industry has won some battles in the war on peer-peer file sharing (think Limewire) but for every site shut down, a dozen more pop up.
Daniel Ek noticed this and wasn’t happy with the state of things. He saw an opportunity to really make a difference in a suffering industry and at twenty-three years of age, he, alongside partner Martin Lorentzon, launched Spotify in 2006. What is Spotify, you might ask? In a nutshell, it is the way of the future for music consumption. Its mission?
“Millions of tracks, any time you like. Just search for it in Spotify, then play it. Just help yourself to whatever you want, whenever you want it.”
And what exactly does that mean? Access to sixteen million songs, that’s what! And depending on your subscription option, that could be sixteen million songs literally in the palm of your hand (i.e. on your mobile). It is more music than you could ever listen to, all in one convenient location…without an obscene price tag attached. Electronic artist and Pigeon front man, Danny Harley, more or less sums the situation up, “Streaming is the way of the future.”
As with any game changing product or service though, you’re never going to please everybody and Spotify is no different. Despite its many virtues and avid support from a large portion of the industry, Spotify has still succeeded in polarising those who can’t fathom its benefits. To categorise their arguments quite simplistically, they are heavily focused on the $$$. Artists earn money on a per stream basis on streaming services like Spotify. That means that every time somebody plays your song, you make money. Seems legit, right? Correct.
The issue becomes contentious, however, when a dollar value is placed on the per stream amount. When I asked Spotify’s Australian/New Zealand label relations manager, Rene Chambers about the issue, I was surprised at how it actually works. How much do artists earn per stream? This isn’t something Spotify can answer, since we don’t pay artists directly. Oh? The truth is, we really don’t know what deals the labels have struck with each individual artist.
You can see where this is going, right? Yeah. Everybody’s favourite stakeholder, the record label, resumes their (now old) role as the greedy villain. As it happens, Spotify simply pays the label and/or distributor a lump sum for the rights to the artist’s songs. From there, the label has free reign to divvy up the spoils to their trusting clients as they please. I was interested to talk to some labels to get their side of the story (right now the picture is looking bleak), and surprisingly all my efforts were wasted; no one wanted to have a chat.
When I was doing some initial reading on the whole Spotify debate, I came across an interesting article on the Bloomsberg website. In it, Coldplay’s manager expressed deep concern for the impact Spotify is having on music sales. The basic jist of things is that Spotify is in direct competition with other distribution channels (i.e. iTunes), and that the revenues it generates are subpar in comparison. Don’t get me wrong, I understand where he is coming from, but I find that to be quite a superficial view. See, it just so happens that I read a piece by Nick O’Byrne (AIR general manager) on music distribution and he contended that, “[You have to] understand that streaming services pay diddly-squat but will expose you to unprecedented audiences.” Now that, to me, sums it up. The audiences you reach through Spotify are unrivalled. Naysayers need to view Spotify as a long-term asset, with the potential to really stimulate a more sustainable environment for the industry to operate and thrive in.
As Rene put it, “We wanted to create something that was a better alternative to piracy and in doing so, drive important revenues back [to the industry].” If the numbers are anything to go by, then the company is certainly doing something right. In Sweden alone, where over half the population use Spotify, piracy levels have reportedly dropped by 25%. Imagine that on a globalised scale. It should be a thought getting all those sceptical music execs giddy with joy. When I asked Rene what Spotify hoped for the industry in the future, her response was simple. “We want the industry to see a new golden era.”
It’s that simple. Spotify isn’t here to exploit. It’s here to help rebuild a suffering industry. Danny said candidly to me, “It is one more place for your music to be heard. It makes complete sense to me, so I say get on it.” And frankly, there isn’t a whole lot more to say about the issue. Long live Spotify.