Running head: THE OTHER SIDE OF SPOTIFY

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The Other Side of Spotify

Ronnie Duriske

Messiah College
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Without a doubt, we live in a world that is dominated by various media platforms.

Everywhere we go, we can almost guarantee that there will be some form of media exposing a

message for us to latch onto. In our modern day society, new media outlets are constantly being

produced for consumers, including advancements in social media, digital video, and even audio

technology. With this being said, there are just a few media platforms that have survived the

ultimate test of time as they were leading pioneers in the media industry. One of these long-lived

media platforms would be the listening experience of recorded music, but what exactly is the

future of this industry? Approaching the end of 2016, the music industry is now interconnected

with what we call streaming technology and one of the world’s leading services, ​Spotify​.

American society revolved around the concept of consumers buying physical releases of

records, cassette tapes, and CDs not long ago, but now the music industry is controlled by

streaming services such as Spotify in an attempt to keep artists relevant and accessible. On the

surface, Spotify is making it easier than ever to get music in the ears of consumers, but it

provides unfavorable conditions for musicians and the music industry as a whole. Each time we

press play and stream, there is a musician suffering at the hands of a subscription. Through the

means of defining Spotify, taking a look at the music industry, analyzing the financial aspects of

the service, closing in on competition, and conveying my own experiences with streaming music,

I will express how Spotify is responsible for the financial failure of musical artists today.

Even though the concept of recording sound and playing it back has been around since

the late 1800s, new and improved innovations in this field influence the ways in which we listen

to our favorite songs and albums today. With the introduction of streaming services in the
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twenty-first century, the music industry is facing a movement that has completely taken over our

devices and everyday lives.

When looking at streaming technology, it is impossible to ignore the fundamentals and

developments of one of the world’s leading music streaming services, Spotify. For those who

have never used the service, Spotify is an application that allows users to pay a monthly fee for

unlimited playback of music from artists who choose to put their songs on the server. As of right

now, Spotify is offered in two forms. Users can download the application for free and enjoy the

capability of listening to shuffled playlists of their favorite artists with audio advertisements in

between songs. Or, individuals can pay $9.99 per month for unlimited access to the music on the

server. Students enrolled in college receive a discounted price of $4.99 per month. Those who

choose to upgrade to ​Spotify Premium ​do not have to listen to advertisements, can scan through

any song or album they want, and can even save music to their devices as long as their

subscription is maintained.

As described in ​Digital Media Reviews​, Spotify’s main goal is “to help people listen to

whatever music they want, whenever they want, wherever they want” ​(Haupt & Shelley, 2012, p.

132).​ The article goes onto say that Spotify was developed in 2006, but finally came to the

United States in 2011. Since its debut in the country, Spotify has recreated the definition of a

music library.

Generally, it could be argued that one of the main assets that separates Spotify from other

outlets is the fact that there is no requirement to pay to listen to individual songs. Users who pay

to use Spotify essentially have a music library that consists of millions of songs using a simple

search. The streaming service operates similarly to most music players in that there are basic
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controls that allow listeners to shuffle music, skip songs, and even replay them ​(Haupt &

Shelley, 2012, p. 132).​ There is no limit to how many times individuals can stream a song or

album, so this leaves options open to those interested. Perhaps this is why more than 24 million

users have gravitated to Spotify. Now, with a vast library of over 20 million songs portrayed in a

familiar fashion, users can adapt to capabilities rather quickly.

People who download and use Spotify can figure out the controls of the service in a way

that is second nature. The program is easy for people to use, and it has various options for those

who need help troubleshooting (Richardson, 2014, p. 50). As long as one has an internet

connection, the entire Spotify catalog is available in the palm of one’s hand.

When one considers the music industry, it is important to recognize how this market has

adapted to technological times and the wants of consumers. The way in which musicians and

record labels distribute music has changed over the past several decades. Through the years, the

music industry saw a drastic departure from vinyl records as the introduction of new

technologies came about including cassette tapes and CDs. However, our society now lives in a

world where these physical releases of music are far less popular.

As the class textbook explains, the introduction of the MP3 file transformed the way in

which people interact with their music libraries. Fastforwarding through the era of digital

downloads, our present day society is growing more toward streaming services like Spotify. In

fact, the textbook states that, “In 2013, the fastest-growing slice of the industry’s revenue pile

was made up of music subscription and streaming services like Pandora, Spotify, Grooveshark,

and Last.fm” (Campbell, Martin, Fabos, & Harmsen, 2016, p. 152). As a result of this trend, it

must be noted that the switch to streaming services including Spotify have caused a great deal of
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controversy among musicians and music labels. The division of profits between Spotify and

competitors alike is simply not fair for the ones creating the art.

Moving forward with this idea that Spotify is not exactly a profitable mechanism for

musicians, it was reported that streaming services make up about 21 percent of the total revenue

in the United States music industry today. While this might sound like a positive statistic on the

surface, the way in which Spotify operates financially is not making the music industry a stable

business model. The majority of those who use Spotify probably do not think about what

happens each time they stream a song or an album on the service. In fact, when a subscriber pays

their monthly fee to use Spotify Premium, virtually none of that money trickles its way to the

artists that are on the server. Musicians, artists, and bands have to pay distribution services to get

their songs on Spotify. Because of this practice, the streaming service is standing strong in terms

of its overall profits while musicians are having a hard time making any money off of their art

(Campbell, Martin, Fabos, & Harmsen, 2016, p. 174).

Truly, there is a difficult relationship between the entrepreneurs behind Spotify and the

artists that participate. There is a huge struggle over who receives the money each time someone

streams a song or an album. When Spotify first came to the United States, there seemed to be a

sense of skepticism from artists fearing to upload their songs to the server. After all, streaming

ultimately has the power to take money away from an artist because it is money lost from a

digital download.

Media Essentials​ addresses the fact that seventy percent of Spotify’s revenue goes to the

music-rights holders, thirty percent is kept by Spotify as a business, and about 0.0007 cents from

each stream goes to the artists. As one can imagine, the payout behind individual streams is
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significantly low regardless of an artist’s popularity via the streaming service. Thousands of

streams definitely does not equate to thousands of dollars earned for the artists ​(Campbell,

Martin, Fabos, & Harmsen, 2016, p. 176).

Continuing with the financial properties of Spotify, experts commonly express the fact

that consumers never truly know what they will get through their subscriptions. While Spotify

has millions of songs to stream currently, there is no guarantee that these songs will remain on

the server forever. There may be a time coming soon where artists revoke their material from

these programs if they can find a way to make money elsewhere. This concept is becoming more

widely viewed as the article addresses that, “the service could lose its license for a particular

sound recording or the underlying musical work at any time. In sum, the possibility of losing

access to the whole service, or to a particular sound recording, works against the prospect of

unlimited quantity of listens” (Dicola, 2013, p. 1868).

Spotify proposes an issue that would relate directly to those who pay for this service.

What happens if one’s favorite band or artist removes their music from Spotify or refuses to

upload their creations altogether? Listeners make a conscious decision when they sign up for

music streaming services. Those who choose to do so must be accepting of the fact that they will

never truly own the content they have within the application.

Believe it or not, many famous artists in the music industry have opened up and

expressed their feelings about Spotify and its economic structure. It is no secret that the

developers of Spotify are the ones making the majority of the money from users, and the artists

on it do not get nearly as much for contributing content to the server. When Spotify started to

gain massive popularity in the United States, drummer Patrick Carney of ​The Black Keys
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explained that, “For unknown bands and smaller bands, it’s a really good thing to get yourself

out there. But for a band that makes a living selling music, streaming royalties are not at a point

yet to be feasible for us” ​(Resnikoff, 2013).

The Black Keys are just one of dozens of mainstream music artists that refuse to see eye

to eye with Spotify. To this day, the band has strayed away from uploading all of their music to

the Spotify server. Users can find some of their older albums on the application, but all of their

new releases are only available via physical copy or through digital downloads in which people

have to pay a set price.

When considering the battle between streaming services and the music industry, it is a

multidimensional war between the wants of users, the economics of how the services work, and

the payments that go toward the artists. However, the controversy of these programs goes deeper

than just the issues previously addressed. The music industry is in a strange place as it is, but

problems behind people using music streaming services gets even more complicated when

multiple applications exist.

When one thinks of streaming services, the mind typically thinks of Spotify or its main

competitor, ​Apple Music​. Although these two services may be some of the leaders in this specific

market, Spotify is not the only streaming service taking money away from musicians that

rightfully deserve payment for their art. To be more specific, ​Rhapsody ​is a music streaming

service that debuted back in 2001. Today, it charges identical rates as Spotify and Apple Music

and offers the majority of the same music as these two programs. In fact, “As of May 2015,

Rhapsody advertises a catalog of more than 32 million tracks, which is comparable to other

streaming services. New albums are often released the same day they go on sale, and Rhapsody’s
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back catalog continues to expand” (Testa, 2015, p. 403). With streaming technology taking off,

this sounds like a fantastic way to get new music in the ears of listeners, but this comes at a

consequence.

Traditionally, competition occurs in almost every industry, and the music industry

definitely shows this practice. Spotify currently stands as the most popular music streaming

service in the United States at the moment, but as discussed previously, this is taking money

away from artists. The problem persists when a service like Spotify is not only thriving, but it is

creating room for other corporations to act in a similar manner. Music streaming services make

their money from subscriptions, and with them all trying to come out on top, this takes revenue

away from the music industry as a whole.

Spotify is practically a sub-business to the music industry. The music industry used to

handle music distribution through various record labels, but now these labels are forced to go

through Spotify as a secondary source to get music in the ears of listeners. Our current society

appears to want to get the largest music library it can without spending very much money. This is

essentially the goal of Spotify, and this delivers a handful of components to consider.

With the research I gathered for this assignment, I realize now that I actually have a

problem with the way in which Spotify functions in relation to consumers. When it came time

for me to research the concept of music streaming services, I had no prior experience with using

them on my own. As a result of this, I decided to sign up for Spotify Premium and try it out for a

month before formulating an opinion on it. After using the service, I am blown away by the

massive library of music that it possesses. At first, I thought this was a great tool seeing as I am

an active musician that plays in a band, but my vision slightly changed as I started to stream over
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the course of a few weeks. For me, I found myself quickly growing uninterested in certain artists

that I was curious about but never heard before streaming. With so much music at hand, I almost

felt like I was underappreciating the art for what it truly was.

Throughout my entire life, I have purchased physical copies of CDs and even new vinyl

as a way to really grow attached to the art in which I was listening to. Somehow, using Spotify

took that value away from me as I did not feel inclined to listen to entire albums because I did

not pay for them all individually. Having that much music in the palm of my hand was slightly

overwhelming because I did not feel like I was giving the individual artists the credit they

deserve.

As a whole, streaming services like Spotify are reinventing the ways in which we can

listen to our music. With a small subscription fee, we can all have the power to search for

millions of songs in a matter of seconds. I do not find this ability necessarily ethical from the

standpoint of a musician. I feel that Spotify is an excellent application in that it appears to be

well-developed and highly successful financially, but I cannot help but to feel frustration that it is

not geared to help musicians. If music streaming services continue to progress in terms of

increasing their number of subscriptions, I do not see how musicians will ever be able to make a

living doing what they love.

Scholars agree in this matter, explaining, “As Spotify’s market share becomes more

established, and revenue streams are proven, larger content owners will possess increasing

amounts of leverage over digital distributors” ​(Richardson, 2014, p. 51).​ In other words, music

streaming services gain more control over labels, independent stores, and other online mediums

the more content they have. By supporting and paying for Spotify, users are slowly creating a
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hazardous environment for music labels and independent musicians. As a result of my research, I

am considering cancelling my subscription to Spotify Premium, since it does not help others like

myself who are trying to get people to purchase original work for what it is worth.

Overall, the music industry is directly affected by the decline in physical record sales and

the increase in subscriptions to Spotify. As technologies develop and change, the music industry

is forced to adapt in order to meet the needs of consumers. While Spotify and other music

streaming applications make listening to music easier, they are actively making the lives of

musicians quite difficult. On the surface, having an unlimited music library for only $9.99 each

month or even just $4.99 each month for students sounds great, but consumers might want to

reconsider.

Universally, communication is entirely made up of messages for humans to decode, and

music spreads messages in a way like no other media platform can. We would not have our

favorite songs and albums if it were not for the musicians responsible. As an individual who

regularly records music and performs at shows, I hope to see some sort of change in how Spotify

operates so that the musicians on it come out on top. Until this occurs, I do not know if I will

continue to use Spotify Premium as it violates much of what I believe in.

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Works Cited

Campbell, R., Martin, C. R., Fabos, B., & Harmsen, S. (2016). ​Media essentials: A brief

introduction​ (3rd ed.). Boston, MA: Bedford/St. Martin’s.

Dicola, P. (2013). Copyright equality: Free speech, efficiency, and regulatory parity in

distribution. ​Boston University Law​, ​93​(6), 1837-1903. Retrieved from Academic Search

Complete database.

Haupt, J., & Shelley, A. (2012). Digital media reviews: Spotify. ​Notes​, ​69​(1), 132-138. Retrieved

from Academic Search Complete database.

Resnikoff, P. (2013, December 2). 16 artists that are now speaking out against streaming.

Retrieved October 22, 2016, from Digital Music News website:

http://www.digitalmusicnews.com/2013/12/02/artistspiracy/

Richardson, J. H. (2014). The Spotify paradox: How the creation of a compulsory license scheme

for streaming on-demand music platforms can save the music industry. ​UCLA

Entertainment Law​, ​22​(1), 45-74. Retrieved from Academic Search Complete database.

Testa, M. (2015). Digital media reviews: Rhapsody. ​Notes​, ​72​(2), 403-406. Retrieved from

Academic Search Complete database.