Fix the Spotify Economy Before Worrying About AI: Lionel Laurent
Unallocated royalties highlight the music industry’s data issues.
Daniel Ek, founder and CEO of Spotify.
Photographer: Dia Dipasupil/Getty Images
Spotify Technology SA has more listeners than ever before, yet it remains unprofitable. This is a feature, not a bug, of the streaming boom. All-you-can-eat platforms have to pay record labels to access tunes by their artists from ABBA to ZZ Top; they have to splurge on their own content, such as podcasts, to stand out; and they have to tread carefully on pricing to compete. Hence why monthly subscriptions have cost $9.99 for years.
Lost in the noise of Spotify’s need to stem its losses are the artists themselves, more of whom are struggling in a winner-takes-all music ecosystem running on half-penny streams. Some 95% of streaming royalty payouts are generated by the top 15%, or 200,000 artists. Lower down, while a fair number of do-it-yourself artists are earning $10,000 a year or more on Spotify, their ranks thinned to 14,700 in 2022 from 15,140 in 2021.