The Union of Musicians and Allied Workers (UMAW) has launched a new campaign called “Justice at Spotify”, with the hope of securing a more equitable financial arrangement from the world’s most popular music streamer.
Spotify has long been criticized for its paltry payout rates. One recent report found that a mid-sized indie label earned $0.00348 per stream, which means that you could listen to a record more than one hundred times and the artist still wouldn’t receive a single cent. Some artists found that arrangement to be less than ideal — Thom Yorke called Spotify “the last desperate fart of a dying corpse” — but Spotify CEO Daniel Ek has defended the arrangement. In a recent interview, Ek laid the blame on artists, saying, “you can’t record music once every three to four years and think that’s going to be enough.”
That might be true as long as the Swedish streamer is doling out $0.00348 per song. But the UMAW is focused on reducing the middle-man’s cut and increasing the share paid to artists. To that end, the “Justice at Spotify” campaign has laid out three chief goals, which have been given the labels “Pay Us,” “Be Transparent,” and “Stop Fighting Artists.”
The campaign is headlined by a demand of at least one cent per stream, which would represent up to a 130x increase in current payout rates. Spotify is cagey about some of its usage, but a bit of back-of-the-napkin calculations suggest that this could put a significant strain on the streamer. The company made $7.3 billion in revenue in 2019, but the gross profit was only $1.8 billion, with most of the $5.5 billion difference going to labels and artists. If the payouts so much as double, Spotify is in serious trouble. There’s no way the platform can support its current model and pay a cent per song; at even half-a-cent, the company would quickly end up in bankruptcy even if they underwent a total restructuring requiring much higher monthly fees and less free-with-advertising streaming. One cent per song should be viewed as an anchor point for negotiations; Spotify can’t say “yes” or it will quickly come to an end.
That’s fine by UMAW organizers. According to Damon Krukowski, “These demands are what Spotify needs to do to become a platform that works for artists. If Spotify’s business model can’t pay artists fairly, and can’t operate openly, then it shouldn’t exist.”
Editors’ Picks
Spotify has more room to agree to the union’s other demands around transparency and artist kindness. The UMAW wants Spotify to credit everyone who worked on songs, to stop making closed-door deals with major labels which are subsidized by indie artists without negotiating power, and to end the practice of payola, which allows deep-pocketed gatekeepers to pay money to boost certain tracks. Finally, the union demands that Spotify end lawsuits against music workers.
So far, the UMAW’s petition for equitable treatment has been signed nearly 900 times, including by Ted Leo, Alex Somers, Zola Jesus, Deerhoof, Jay Som, Lady Lamb, Illuminati Hotties, Eve 6, WHY?, Sad13, Tanya Donelly, Fugazi’s Guy Picciotto, Sheer Mag, Ezra Furman, Downtown Boys, and more. If the union’s demands aren’t met, they plan to escalate tactics. As organizer Cody Figerald said in a statement, “There is money being made in the music industry during the pandemic, it’s just not going to artists. We need to stand together to demand our fair share.”
Editor’s Note: During the pandemic, Consequence of Sound is supporting independent musicians by donating a portion of all proceeds from our webstore to MusiCares’ COVID-19 Artist Relief. Safe by picking up one of our custom face masks or T-shirts.