When Spotify first launched it was hailed as the saviour of
the music industry. Music fans could now listen to whatever music they
liked, as often as they liked and it was all completely legal. The
recording artists would be paid each time their track was played. This
money would come from visual and radio-style advertising along with
subscription fees from premium users. The fans get what they want, the
musicians get what they want, the advertisers get what they want and the
pirates get nothing. Simple.Well not quite. The thing is, this triangular business model is more isosceles than equilateral. The fans and advertisers do indeed get what they want but the reason they are both connected to Spotify is because of the music, and the makers of this music give a lot more than they get.
Granted, Spotify does introduce fans to new music which they may (or may not) go out and pay for, but with over 3 million members paying $5-10 a month you have to wonder why the people providing the product are getting such a tiny percentage of the profits.
Have a look at the infographic below to see how Spotify compares to other forms of revenue for artists.
This is what an artist’s Spotify statement looks like.
