Recently, a handful of notable musicians have staged what they admit is a “small, meaningless” rebellion against the music-streaming service Spotify. The argument, as explained by indie music icons Thom Yorke and Nigel Godrich, is pretty simple and nothing new: Thus far, Spotify hasn’t reimbursed musicians enough for their music, which is what attracts revenue for Spotify. There’s probably a “change the record” pun there, but I’ll spare you.
Subsequently, music nerds everywhere have jumped behind Atoms for Peace and their defiance, partially because they really like Radiohead and partially because they feel passionately that the members of Radiohead (and, therefore, Atoms for Peace) should be paid handsomely for the music they make.
And I don’t disagree. I’m not here to criticize Atoms for Peace or The Black Keys for publicly denouncing a financial imbalance that affects them. In their shoes, I would do the exact same thing. Fundamentally, it’s not that different than teachers striking to prevent budget cuts or Hostess bakery workers sacrificing their jobs for their pensions. There used to be a standard for the amount of money that they make, and suddenly they’re not making as much. So, they are upset and trying to earn that money once again.
What I don’t get is why any music fan is actually opposed to using Spotify.
At any given moment, we can turn to Twitter and within a few seconds find a few hundred people who passionately oppose Spotify for the very reason of artist reimbursement. Hypothetically, let’s imagine that they succeed and convince all other music fans to abstain from Spotify. Then, Spotify comes crumbling down and the internet streaming market at large begins to fall apart, as investors stop sinking money into a technology that has been entirely boycotted by the very audience for which it stands to benefit.
In that alternate reality, two options will be left for digital access to music: buying digital albums on services like iTunes, or good-old piracy. The small base of music nerds will likely continue buying albums on iTunes because they want to support artists, but the vast majority of the market will turn back to piracy. The last time these were the only two options for access to music, the music industry claimed to have lost $75 trillion.
This, a boycott of Spotify or Pandora or any other music-streaming service, is where music fans have gotten it wrong. Yorke and Godrich, along with the Black Keys and all the other musicians, who have called out Spotify for a lack of reimbursement are doing the right thing – instead of calling for the end of Spotify, they’re calling for Spotify to pay them more money for the content they provide to their service. And if musicians stand to make more money, then more talented musicians will be able to put more time into their music. As Godrich said on Twitter recently, “If people had been listening to Spotify instead of buying records in 1973… I doubt very much if [Dark Side of the Moon] would have been made.”
But if, instead of boycotting Spotify, their fans inform Spotify that they will only pay for the utility if specific albums are available on the service, then Spotify may be forced to pay what it needs to make these albums available.
Let’s say, hypothetically again, that 500,000 non-Spotify members sign a petition promising that they will join the service if it will stream the Black Keys’s latest album. The company will therefore see the business value of adding the Black Keys’s latest album to their supply.
On the other end, it’s a benefit to Black Keys fans, who will pay the $10 monthly fee for unlimited access to the Black Keys’ entire catalog, in addition to Spotify’s library at large, rather than pay $12 to download just one Black Keys album.
Upon first entering the U.S. market, Spotify was pretty strapped for cash. Most of this is because, in order to gain any traction in the market, the service was made available for free to users, who didn’t mind listening to ads in between songs. After its first year in the U.S., the company actually reported a loss of $40 million in 2010, even after seeing its revenue grow 458 percent. Since then, it has grown pretty steadily, with revenues doubling in 2012. If people were to continue boycotting Spotify, then Spotify’s profits will remain low, and so will its budget for reimbursing artists.
So how can music fans expect Spotify to pay artists more money when they won’t give them any direct cash for their albums in the first place?
It is still early, and, as some have pointed out, we shouldn’t be so quick to trust a company that says it wants to be “100% committed” to making itself “artist-friendly,” especially when it means that the company will have to pay a lot of money to do so. But, fortunately for the music industry, nobody has to trust Spotify to stick to that promise, because the artists will force them to.
When Yorke called the Atoms for Peace boycott “meaningless,” he wasn’t wrong. But if a few years from now Spotify doesn’t appease artists, they’re likely to hear about it. Not only can jilted artists convince a lot of people to abandon Spotify, but they can offer their music on their own websites. Hell, why not make an event out of it, and offer a discounted download of a new album to every fan who can confirm that he or she unsubscribed from Spotify?
It may not be perfect yet, but online streaming is the best solution we have to piracy so far. Compared to how it was a decade ago, the piracy situation looks a lot more hopeful now. Just as musicians became accustomed to earning a certain amount of money from record sales, consumers in the past decade got used to unfettered access to free albums on Napster and LimeWire. But, the market is never going to make a U-turn to the antiquated music ownership model just because a musician says it should.