Wednesday, November 22, 2023

The Major Labels, Major Artists, and Major Streaming Services Plan to Steal from Indie Artists

After 25 years of flailing, the record companies have finally gotten back to their core competency: screwing small artists.

Spotify (which is partially owned by the major labels) has indicated it plans to roll out a new system in which the rich and successful blatantly steal from the poor and emerging. If your music generates fewer than 1000 plays from 500 unique listeners in a given year, you will no longer accrue royalties or get paid for that time period. The same is true if Spotify decides what you are offering is "not real music".

That money will go to the major labels. To Taylor Swift and Ed Sheeran and David Byrne and Thom Yorke and the estates of Michael Jackson and Marvin Gaye.

It's a kind of reverse Robin Hood, or a perverse re-imagining of Superman 3/Office Space financial trickery. The amount of money for any individual indie artist is tiny, fractions of dollars. But collectively, it adds up to an estimated additional billion dollars over five years for people who don't need it and didn't earn it.

To be clear, it is not about the cash in and of itself -- the money for each indie artist is too small to have any real financial impact. But it is very much about the principle.

I wish I could say that all the old, successful artists who have been so vocal about streaming service economics in the past were standing up to fight against this, but they are all silent on this issue so far. I wonder why.

Meet the new boss, same as the old boss

Spotify and other streaming services are about to start taking money from struggling independent artists and put it in their own pockets and those of their biggest and most-successful acts. This new policy is disgusting, grotesque, and exactly the kind of thing streaming services were created to fight.

The hubris and cluelessness of the major labels is again on full display, with them arguing that "someone just putting up white noise" should be worth less than "an artist that had spent a year in the studio...with all kinds of instruments and people involved."

Uh, no. That's not how art works, and it is not how copyright law for sound recordings works, either. Effort and expense don't count, or make a work more or less valid. Records have been priced more or less "the same" at record stores since time immemorial, whether it was a bloated pop creation that cost millions and took years, Bruce Springsteen's "Nebraska" (recorded in a bedroom on a 4-track), Nirvana's "Bleach" ($800!), or nature sounds.

Ed Sheeran, celebrating being able to steal from
Marvin Gaye AND indie artists
[Timothy A. Clary / AFP/Getty Images]
The major labels continue: "It can't be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof." Well, some might argue the rain has more value, and is more pleasant than whatever Ed Sheeran is bleating this week. 

But the bigger issue is that the label or owner of one piece of content doesn't get to decide the value of other people's content. (And Ed Sheeran is doing just fine, by the way.) 

"Obviously white noise is very different from 'Bohemian Rhapsody,' but paid the same." Yes, it is. Because the listener doesn't care, and the service charges them the same. Subscription services and hosting companies will charge you the same amount of money to put your audio content up, whether it is famous, unknown, or "noise" (and I would note there are plenty of records that cover 2 or more of those categories). 

Even the idea that the major labels get to draw a line between "functional noise" and "music"...Have none of these people ever read an (art) history book? "Functional noise" is how a lot of now-popular music genres would have been described years ago. 

It is also worth noting this is a problem wholly of Spotify (and other services') making. They wring their hands about "bad actors" gaming the system. Who lets those "bad actors" upload whatever they want, without any editorial control or review? Oh yeah, it's Spotify. 

Services like Spotify could simply stop taking anything and everything they are offered. They could exercise the barest minimum of curation or editorial discretion. For years, they have largely gone the opposite direction, desperately hoovering up whatever audio files they can find, without bothering to listen to them or screen them for merit or offensiveness or anything. 

Except for that brief period when they were thinking about kicking "bad people" off the platform. Well, not kicking them off, but maybe just not promoting them. Or something. Hmm. Why not take their money and give it to indie artists?

Let's call this what it is: Major label (and big artist) greed. 


Prior to the 21st century, being a small, independent artist was extremely difficult. Recording studios were expensive, and making even a cheap record could cost quite a bit. CD, vinyl, and cassette duplication cost thousands of dollars and took months. Once you finally had your records, actually getting record stores to take them, sell them, and pay you was nigh-impossible.

The digital music revolution of the late 1990s and early 2000s promised to give up and comers a chance. Computer-based recording dramatically reduced costs of making a record while simultaneously making recording easier -- you no longer had to spend a year in the studio making an album with all kinds of instruments and people involved. You could do it yourself in your bedroom or garage. 

Digital distribution meant that not only was a costly investment in physical media not required, but musicians could sell globally, with transparent accounting, effortlessly.

When my colleagues and I started building what became Rhapsody, the world's first music streaming service, we had a utopian vision: all music would be treated equally. It didn't matter if you were The Beatles or Lady Gaga or Sid Luscious and The Pants. 

We did it, and that model of equality became the standard, which every other service adopted (or copied) more or less without question. Partially because they had no ideas of their own, and partially because they were too lazy to innovate and were content to catch a ride on the work we had done. 

And as we had thought, people started listening to more music and audio from a wide range of sources. The major label's "share" of people's listening began to decline.

One could also reasonably hypothesize that the major label's share of listening also declined because the labels weren't developing long-lasting, quality artists, and because there was a massive influx of independent musicians which provided many real alternatives and allowed people to hear things other than the few dozen songs the majors jammed into people's ears by methods legal and illegal.

It also turns out people want to listen to all kinds of things, not just major label albums. They wanted to hear weather sounds, white noise, and podcasts. And the music services were eager to provide this alternative content. Ironically a big driver here was the major labels' own insistence on eye-watering terms for streaming the music they control -- the major labels incentivized streaming services to look for other things for people to enjoy. And another driver was the music services responding to customer requests.

Ultimately, this is another re-statement of the content cartel's position: Only their music is real art, and the rest of us amateurs should just shut up and pay them and be grateful for their amazing artistry.

This kind of thing is another reason I left the business in the first place.

I Will Follow

Spotify can't help it -- they're beholden to the majors, and too craven to take a real stand. And given the way the industry works, I will not be surprised to see every other music service fall in line and do the same thing. Their precious major label deals will probably require it, either explicitly, or by careful legal construction that ensures the services can't survive unless they do something effectively the same. This is how the biz works.

I am not sure if I will leave my music up on these services or not. These services are still good for listeners, even if like so much else in our 21st century world, the rich get richer by stealing from the poor. And we don't have too many alternatives left. 

But I don't have to like it, even if Spotify cravenly tries to spin this as a "pro-artist" endeavor.

One reason we started these services was to build something more equitable, fair, just, and accessible for all artists. Even back in 2000, Queen and other established artists didn't need more money. The biggest artists didn't even want to be on the services. We had to bribe them all, with fat cash payments for the privilege of paying them more royalties later. And now, for the privilege of looting the pockets of the next Yo La Tengo. I guess in that respect, we won for a while, but eventually, Big Content came roaring back, and we lost.

But another reason I was motivated to do all that work was because Napster -- an illegal, unlicensed service predicated on blatant infringement and violation of the rights of artists and labels -- was decimating the music industry. I, we, all wanted to help save the music business from Napster (and from the music businesses' own cluelessness and ineptitude).  Ironically, Rhapsody bought the Napster brand some years ago and re-branded. I used to think that was a kind of loss or victory in and of itself. But now?

We should have let Napster destroy the music business.

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