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🔵 New/Rising Artists: Spotify doesn't want you in your growth phase... and that's OK.
Why splitting the world of music out might not be a bad thing
Hi there -
After some speculation last week, Spotify has today confirmed that from next year, it will not pay royalties on any songs receiving less than 1,000 streams per annum.
Much is made of the minimal impact this will have. Spotify stated that this is “designed to [demonetize] a population of tracks that today, on average, earn less than five cents per month”.
Of course the self-defeating aspect of this is that if this amount is so trifling, why is it a victory to move that money to larger artists? Either this is meaningful or it isn’t - hedging it as both is a little disingenuous.
I have wondered if someone would do the leg work to find an artist who might have been affected by this new rule, and sure enough, MBW has delivered. Iñigo Quintero has more than 180 million streams on Spotify, but twelve months ago, he was managing just 220 streams - across all DSPs combined.
I will repeat the point I’ve made that before, that in my view judging this on what the affected artists will earn (or not) from Spotify is a fool’s errand. The simple reality is indeed that the amount being paid out was as close to nothing anyway, and that cutting it will mean nothing to them, because none of this meant anything in a material sense anyway.
The real impact, as I have also pointed out a few times now, is that this essentially sends a message to new and emerging artists - yes, one of which could have been Iñigo Quintero over a year ago: focus your time elsewhere. DSPs simply aren’t worth bothering with now.
And you know what? I am totally fine with that - because DSPs were never worth bothering with in that context. No doubt you’re in the clover if you hit Ed Sheeran levels of streams, but for more artists than not, the revenues here just aren’t even worth looking at. How excited would you feel about getting, say, £/$/€3.50 paid out each month? What can that buy - a can of soda and a chocolate bar? It’s absurd to even look at it in the context of a profession, a means to make a sustainable living.
I’ve talked a lot recently about Bandcamp and how losing control of a narrative can cause plenty of damage to something. I would argue Spotify has missed the same thing happening here. No doubt this news is welcome to certain rights holders, but look online and a lot of artists are fuming. The message is essentially a variant of “Spotify doesn’t give a fuck about you”.
And again, I am fine with this, for all the reasons stated. This whole space needs to accept that one model simply cannot work for everyone. Right now the balance on the scales is tipping again - for now, in favour of larger artists. However in time that might well shift back the other way, via other platforms that are not streaming services.
As Mark Mulligan notes below, it is time for artists to consider other means to generate revenue, such as subscription services. I will dig into that more in tomorrow’s Network Notes, but for now, I simply welcome an acceleration of a situation whereby artists move to engage more fully with the platforms that generate solid income for them. And in time I sincerely hope we’ll see even more alternatives and opportunities pop up - god knows the time is now right for them.
Have a great evening,
🤖 playing with ‘feedback loops’ in Chat GPT. Try this: download an image, and then upload it to GPT asking it to describe that image in immense detail. Then copy that text, open a new chat and feed in the description it just gave you. What you get back will be a fresh take on the original image. It’s pretty crazy, albeit depending on how distinct the original image is. I can see this working for sound soon too: feed it music for a description, then take that description and feed it into something like Musicfy to generate a fresh “sample” to use in your music. Incredible.
📺 watching “How Money Laundering W/ Spotify Works” by Benn Jordan. A superb explainer on exactly how money laundering is executed on the Spotify platform. Essential viewing.
An irony I see around me now is that music is everywhere, and yet the storytelling around music - those personal tales about why an album means so much to someone, or how it affected them, or otherwise why it just warrants anything from 30 to 90 minutes of your time - seems to be getting harder and harder to find.
So, I have started a second publication,, which will highlight albums considered by the author to be a slept-on classic; a real gem worthy of your time.
I also won’t be writing this one alone. No, I have asked all manner of friends and colleagues across the music industry to also get involved.
Stories from the Music Industry:
MIDiA’s data shows strong willingness among fans to pay, up to $5 an artist. But, if a long-tail artist was to price their subscription at just fifty cents, it would only take five fans to subscribe to generate the same amount of income a thousand streams would. Get that to ten fans (surely eminently achievable for many long-tail artists) and they would be earning double the minimum stream threshold of the two-tier system.
👆🏻Hot take: this is an excellent point, and I find myself wondering if the models that Substack provides for writers might in time see themselves replicated in the music space. More on this tomorrow.
Talking ‘garbage’: How can Spotify and co sort the dregs of the music business from the hidden treasures?
Take Iñigo Quintero, as a prime example. His big Spanish-language hit currently has more than 180 million streams on Spotify, and another 48 million on YouTube. Yet according to Luminate data seen by MBW, this time last year – in the chart week ending November 3, 2022 – Quintero’s entire catalog was streamed… wait for it… 220 times. Across the whole of the United States. On every on-demand streaming service available. A month before that? It wasn’t even streaming enough to register with Luminate.
👆🏻Hot take: MBW raise the perfect point here. All artists have to start somewhere, and what remains to be seen is just how much artists even care for Spotify as they continue to grow.
Anthropic explains in its recent USCO filing, which you can read here (and which we must stress is not connected to last month’s lawsuit), that its Claude chatbot “is trained using data from publicly available information on the Internet as of December 2022, non-public datasets that we commercially obtain from third parties, data that our users or companies hired to provide data labeling and creation services voluntarily create and provide, and data we generate internally”.
👆🏻Hot take: whilst some of the arguments here might have substance, others feel like they really do not. Curious to see how this plays out.
BMG has announced the latest change to the way it pays royalties out, with songwriters set to benefit. Well, a specific group of songwriters, anyway, in a specific country. The company is going to “speed the payment of mechanical royalties to its US publishing clients when their songs are used on recordings released by BMG’s US artists”. Speed up by how much? BMG said it will pay these mechanicals in the same quarter, rather than 3-6 months later as in the past. The company added that this is the result of bringing its publishing and recordings data into the same cloud-based royalties system.
👆🏻Hot take: am I the only person who doesn’t view this as a positive? It just feels exclusive (in the negative sense), though I’m sure for some songwriters it might well prove a huge bonus. Faster payouts is a win for anyone, but even so…
The UK-listed company, which trades on the London Stock Exchange, has appointed Rob Naylor as its new Chairman of the board and as a non-executive director. Naylor succeeds Andrew Sutch as HSF’s Chair. In addition, Francis Keeling has been named a non-executive director at HSF. Both appointments are effective immediately. Naylor and Keeling each bring with them experience from Round Hill Music Royalty Fund Ltd (RHM).
👆🏻Hot take: a smart move here, given the excellent exit Round Hill just had in its sale to Concord. Certainly in terms of the narrative to shareholders etc this is about as good a move as could be made IMO.
Stories from the Broader World of Tech:
Now, the company is releasing a platform for making custom versions of ChatGPT for specific use cases — no coding required. In the coming weeks, these AI agents, which OpenAI is calling GPTs, will be accessible through the GPT Store. Details about how the store will look and work are scarce for now, though OpenAI is promising to eventually pay creators an unspecified amount based on how much their GPTs are used.
👆🏻Hot take: some incredible features being announced here. I’ve said for ages that for me AI will really become ultra-valuable when we can focus it into our own private data, and it looks like we’re taking another step in that direction with that’s been announced.
With this in mind, the games industry needs a new growth driver if it is to thrive once again. The saving grace could come in form of in-game spending (especially the cosmetic part thereof). As consumers spend increasingly larger portions of their lives in digital environments, their need to define their image, personality and identity in digital grows too.
👆🏻Hot take: curious to see how the world of gaming now evolves as it faces more and more challenges.
Need something else to read? Here you go:
From Copy.ai to ChatGPT, these services will help reduce the friction we face when staring at a blank page.
👆🏻Hot take: a great rundown of genuinely (well, in some cases anyway) useful tools for writers. So, if like me you’re putting a fair bit of time to this, you might well find something to help.
You actually want your communication to stand out from the white noise. You want it to be different, because otherwise it won’t get noticed.
👆🏻Hot take: one might argue the point Dave Trott makes here regarding advertising is an obvious one, but I feel his starting point is correct. Too often we are dumbing down ads on the basis one person might not “get it”, but the end result is simply mediocre ads.
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