I have never liked streaming services. I believe the best option has always been to own what you like because, at any moment, companies can take it all away from you. This is something I touched on in my video called "Tempest In A Teapot." I always wanted to do a follow-up to it which gets more in-depth on how streaming has damaged the ways we consume music, so I began writing in 2023. As I wrote and kept finding new things, the project kept growing. What was once a "takedown" of Spotify became a reflection of the music industry and a demonstration of how we got to the current landscape. As I wrote this, the AI bubble was starting to grow and Spotify's then-CEO Daniel Ek was heavy into it. I also do not like AI, and given how it was affecting musicians, I started writing a massive video on that as well. I call these "the sisters" because both cover similar topics and reflect on the current world in ways my retrospective essays don't. I really tried to get these out there but I could never get them to a complete state, partially because the topics kept expanding.
With Spotify now airing advertisements for ICE as they terrorize and kill people, Daniel Ek putting even more money into AI-powered weapons than before, and a growing boycott from artists and fans alike, I feel compelled to share this script. However, because it's so long, I'm going to split it into parts. This is the introduction and background context needed to understand how we got to where we are. Disclaimer: it is not finished and there are some missing elements, so please do not take this as a source. Instead, use it as a jumping off point.
Intro
Okay, so there’s a saying that goes like this. “There is no ethical consumption under capitalism.” I dislike this phrase but not because I believe it’s wrong. If anything, it’s because it’s too true. In a capitalist society, one consumes and utilizes things that were sourced unethically and/or gives money to awful people. The Starbucks you had this morning could have been made from coffee beans harvested by child workers as young as eight years old in Guatamala. Your iPhone could have been made in a Chinese sweatshop town owned by Foxconn. The money you spent on chicken from Chick-Fil-A went straight to anti-LGBTQIA+ religious groups. The $70 you plopped down for a Harry Potter game had a large portion of the revenue go to someone who believes trans people do not deserve rights. The arts and crafts supplies you bought at Hobby Lobby went to a company who literally smuggled ancient artifacts for a religious museum. They’re also anti-abortion and LGBTQIA+, yadda yadda yadda. Under capitalism where the bottom line is lower manufacturing costs and higher revenue, and where the winners of the races are not guaranteed to have morals or recourse to decency, there’s a tendency to dive into the unethical, to put it lightly. This phrase encapsulates that, but it also unintentionally argues for something different. When it is said, it is often used as an excuse. A way for someone to explain their own refusal to act and boycott something that funds people, groups and companies that actively harm other people and the world we live in. In a way, capitalism has become a scapegoat for one’s own selfishness. If everything is unethical, then why even bother? By the logic of those saying it, you might as well indulge in vileness. Fill your stomach with Starbucks and Chick-Fil-A, be the first in line for each iPhone and buy multiple copies of a video game that makes you feel nostalgic. However, that's not the purpose of the phrase. It’s meant to be an acknowledgement that capitalism is exploitative but also a reminder that we need to try to consume ethically. We can’t be gluttonous about it nor can we waive it all away as a non-issue, we need to act on it. It takes some level of sacrifice but if that leads us to even a fraction of a better world, it’s worth it. “There is no ethical consumption under capitalism” is good as an explanation of our current reality, but it has the unintended flaw of being an excuse. Why do I bring this up? Well, because I feel that it would be the common response if I said “you should probably ditch Spotify and music streaming altogether.”
As strange as it might sound, Spotify is a hard thing to explain. It is, of course, a music streaming platform, if not THE music streaming platform. According to their metrics they host over one hundred million songs and five million podcasts. Each day, 100,000 songs are uploaded to the site. They have four hundred eighty nine million users, two hundred five million of which are paying subscribers. Spotify holds the largest share of the streaming market, it makes the rounds at the end of every year due to Spotify Wrapped, it is the dominant streaming service. Even its creators are given a title fitting for a king. Frankly my explanation of what it is might not have even been needed, I’m going to guess many of you watching are Spotify users and I don’t blame you. It’s fast, cheap and widely accessible. It gives us an opportunity that previous generations never had, the history of music at your fingertips ready to go at any time. On this alone, my suggestion to drop Spotify and rethink streaming is childish. I acknowledge that, how can I not? Yet to me, something has always been off. Free or cheap music anywhere you go? That sounds too good to be true and a few button clicks and article readings later, I found out that my thought process was actually quite sound. Spotify is not perfect and has a history of shady dealings and weird blowups - a revelation that I don’t think is surprising because of course there is. However, I think it’s often ignored how deep this goes. Beyond certain major topics is a rabbit hole of questions that paint an ugly picture. It’s also a rabbit hole that digs itself into other rabbit holes of the music world - making previously dug environments into bigger hazards. It’s a topic that can’t be described in a five minute video. It’s a topic that requires decades of context and a whole lot of technical jargon - and I think I should give it a go. Today I want to talk about Spotify. What it is, what it is believed to be, what it could have been and who it works for. I want to cover as much as I can and reach not just an idea of what we can do about it but also recognize a long bleeding cut. At the core of this story is not the success of entrepreneurs as some have written it. I think the core is a tragedy for the arts. Let’s start one hundred years ago. Why? Because Spotify sucks, but so does everything.
Sin-dustry
If we want to understand why things suck the way they do now, we have to start a hundred years ago to point out how it sucked back then because there’s important context. I’m going to try to breeze through this but if you look at the time code you know that’s not how it’ll go. The invention of the Edison cylinder and the phonograph were exciting new developments but it needs to be understood that they didn't take off until later. Music before recorded sound was communal - oftentimes people playing by themselves based on sheet music. Concerts existed but weren’t the same as what we have today and live bands often catered to a wide audience and would shift tone depending on what the audience wanted to dance to. Recorded music filled a new place - though one that was still finding its footing and not without criticism. In fact John Philip Sousa was notably against recorded music, he had even written an article about his concerns with the technology. That’s like Taylor Swift coming out against recorded music, it’s nuts but that's not my point. At the time recorded music was in its infancy and artists were primarily making money off of sheet music and live shows. For those on the records, royalties were an unusual practice as the labels opted for flat fees. It was under this system that the works of someone like Sousa would have been used without compensation. Tons of cylinders and records were made and none of the revenue would go back to those who wrote the songs. In the early 1900s it was determined that royalties had to be paid to composers and songwriters but left out of these decisions were the performers - who continued making money doing live gigs. Simply put, if they didn’t have a songwriting credit, they weren’t getting royalties from the labels. The idea of paying royalties - payment to rights holders - was an issue for labels in some form even in these early days. It doesn’t tank a label’s viability but it’s money that could be in the hands of Columbia or Decca and as capitalism dictates, the more money the better. This gouging of revenue as recorded music grew had a lot of effects but it was especially felt by artists of color - notably Black musicians. The major labels of the time did invest in their music releasing them as “race records.” These were 78 rpm discs typically marketed towards non-white audiences, though they’d eventually find that wider market. Most if not all of the major labels, owned by white businessmen, participated in the practice and they often used their position of power to cheat their artists, something that would become standard practice in the following decades. For example, Bessie Smith, the Empress of the Blues, was signed to Columbia and didn’t get a cent in royalties, meaning she had to make her living as a touring musician. Why was this deal struck if it was so one sided? Partially because she couldn’t read the contracts. She was illiterate. She got a flat rate of around $200 dollars per song, or about $3000 dollars today. That's it. Columbia sold millions of her albums, she outsold her white labelmates, yet $200 per song was all she got. Sadly, she was the highest paid Black musicain of her era. Around the same time, labels sent scouts down South to record Black musicians in a sort of “one time only” deal. The artist would be recorded and paid, the travel scout would return back, then release the recording, and the artist had no further communication. This practice saw the artists get completely erased from the equation as the labels could always create a pseudonim, essentially blocking the person on the recording from any chance of discovery. Worth remembering that this was at a time when Black artists couldn’t join the ASCAP, or the American Society of Composers, Artists and Performers, meaning that they had little power over what happened. The labels had control, not the artist and that’s not a bug. That’s a feature and as time went on that feature of dominance continued to show itself. In fact the birth of rock and roll is defined by that exploitation. Big Mama Thornton, who you might know as the talented woman who originally recorded the song “Hound Dog” got virtually nothing from her recording other than a payment of $500 dollars, which would be about $5,600 today. In fact the song’s producer Johnny Otis would get sued out of his rights later on. Little Richard, one of the most iconic and influential musicians of all time, who’s work inspired The Beatles, Elvis Presley and countless others was paid half a cent per record at his peak. He would later fall out of his contract, meaning that he wouldn’t even get future royalties from his most famous work that moved millions of records. After Chuck Berry released the single for Maybellene on Chess Records, he realized that people who never worked on the song got songwriting credits. One of these people was Alan Freed, a Cleveland radio DJ who heavily promoted the song which ended up being a part of a whole scandal, though we’ll get to that eventually. This isn’t to say however that only Black artists were given bad record deals and stiffed on the money because while they got the worst of it, white artists were also trapped especially in the ‘60s.
John Fogerty of Creedence Clearwater Revival had some notorious issues. When CCR signed to Fantasy Records in the ‘60s, a label owned by one Saul Zaentz, theyl took not just the distribution rights but the publishing as well, meaning that the band did not own the music at all. Fogerty, who wrote the songs, didn’t have any control and was not getting the pay that he truly deserved. CCR were huge, we’re taking multiple top selling albums over three years, and they got screwed. Zaentz had so much control of CCR’s music that he sued John Fogerty, the guy who wrote the songs, for a track that sounded like a CCR song. There would be a lot of legal battles afterwards and Fogerty thankfully ended up getting his songs in 2023 but it goes to show you how bad these deals can be. Fogerty wasn’t the only one in a bad relationship either. Tommy James, the artist behind songs like “Crimson and Clover” and “Mony Mony” had a, let's say, interesting dynamic with the label Roulette Records, which served both as a label and as a front for the Genovese crime family. The label was run by one Morris Levy and this guy was a real character. He was someone who just didn’t believe in the concept of royalties. James would state “You took your life into (your) hands when you asked Morris for royalties.” “I didn’t get any beatings, but plenty of threats and intimidation. You didn’t talk about what you knew. Roulette was a social club for the Mob; they used it to organise illegal bank accounts and drug deals. Trailers were parked up all day unloading who knew what. I’m trying to have a pop career with this terribly dark and sinister story going on which could never be discussed.” While James would get paid for touring, TV appearances and the like, he didn’t get mechanical royalties for the distribution of his music. Like CCR, Tommy James and the Shondells were a pretty big deal and to not receive royalties off of the music had to be absolutely frustrating especially when they were selling millions. Even the king of rock and roll himself Elvis Presley was screwed out of a lot of money by his manager Colonel Tom Parker. At the start of their working relationship, Parker took a 25% commission on all of Elvis’ projects. By 1967, he was taking half, which is way more than usual. There's a lot more to the Elvis story but I think I got my point across. So many artists went to make it big and signed predatory deals that would cause them pain ever since. Managers, but especially music labels like any capitalist thought leaders, want the most money possible, and by god are they gonna get it. That isn’t just an off color thing that happened to a few, like I said earlier it’s systemic. The music industry was designed to go against the artist to maximize profit and it’s been that way since the very start. This has some interesting intricacies when we compare the music industry to - let’s say, the book industry. Unlike the book industry where writers keep their work and distribute their books to publishers, artists are under contract by the label who retain the masters and distribute the music. The artist isn’t the one pushing out the records and placing copyright restrictions, they’re just the ones you hear and see live. There are exceptions to this - some artists such as Prince do own their masters - but it’s more likely that the label owns all that regardless of size.
Now you might say that if you were in this spot you’d be smarter. You wouldn’t sign a bad record deal with a major label, you’d show them who’s boss and negotiate a great deal. That’s a good joke, I appreciate how forward it is. In reality, you’re fucked not from the day you release a record, not from the day you sign a record contact, but from the day you meet an A&R rep. Producer and founding member of Big Black Steve Albini wrote a great article called The Problem with Music, which I highly suggest you read, but I’m going to paraphrase what he said because it speaks volumes to why these record deals are made even by people who are generally smart or savvy. An A&R rep finds a band and if they deem them good enough for the label, they’ll start talking. From there the band signs a “deal memo” - an outline of terms and conditions that essentially state that a deal with the label will be made. Importantly, this is not the deal in and of itself but it serves as a binding document so that you WILL eventually sign to their terms, or else. Just from signing this alone, the band puts the label in a position of power and glues themselves in place. They can’t go to another label or refuse as they’d be destroyed legally, they’re in for the long haul and it’s from this point on that they can be further exploited. The band signs the deal, the label pays an advance for the creation of an album, all that money goes into it costing thousands and thousands of dollars and potentially leads to a band in debt, maybe making less than a minimum wage worker while the label makes thousands if not millions. There’s way more detail to it which Albini describes perfectly, but that’s the rundown. Artists are put in a bad position from the start. They’re excited to sign these deals, they’re going to live out their dreams of being rock stars or entertainers - or they see the step up as beneficial to them in some way. They meet this A&R rep who might not seem like the normal industry guy, they might even be a veteran. From there they willingly sign that memo, then the contract, act like they’re on top of the world and from there they're lucky if they survive a few years. That’s the music industry, baby. That’s Hollywood. Or New York. Or Chicago. Have fun living out your dreams as the next Keith Richards, they’ll end before they begin. The system of the music industry is rigged against those entering and is antagonistic to those who actually make it in some form or another. So much so that I’d even argue if you got ten different diehard music historians and fans in a room and asked them what their favorite bad record deal was, they’d all have different answers. I might bring up that time Frank Zappa was told by Warner to give them four albums and then when he did they refused to pay him the $60,000 per album that was negotiated. Someone else might point to the various legal issues of Badfinger. There’s no shortage of music industry sleazery when it comes to contracts, masters and rights.
Not to insinuate that the music industry sleazery ends at masters however. Some of its biggest scandals took place outside of the usual “sign away rights” deal. In fact, the 1930s to 1950s saw the rise of one of its biggest issues - payola. Simply put, payola is when a label or artist bribes a DJ to promote music without disclosing that a deal was made - essentially hiding an advertisement. This act was a prominent arm of the music industry in that time, making its biggest splash in 1959 when many radio DJs including previously mentioned DJ Alan Freed and host of American Bandstand Dick Clark were caught up in hearings about the practice - which would ultimately tank Freed’s career entirely. And as you might begin to expect at this point, Morris Levy was involved but whatever. In 1960 the Federal Communications Act was amended to tackle under the table agreements but through a legal loophole and a less than caring industry, the practice continued. Payola still happens by the way, they never stopped. In fact some of the biggest hits of the last fifty years were the result of undisclosed agreements or were at least potential deals. Albums and bands you love were helped out by that practice - not that the bands necessarily knew. And then we get into the obscure exploitation such as the tax scam record labels of the 70s where an established label would create a subsidiary label that they would control, buy a bunch of unknown demo tapes and manufacture them to some unknown extent. From there they’d release some as promotional material but leave many sitting in warehouses while the label would write off the entire endevaor as a failed business and get a tax credit. The most well known of these labels was Tiger Lily which was run by… Roulette. That’s Morris Levy again. I told you he was a character. Of course, this practice did not pay the artists on the records, most didn’t even know that their demos or unreleased material saw a release of any sort. Makes for a cool vinyl collector oddity but not great for the artists like Stonewall who found themselves on a label they never even knew about.
Anyways, at the same time the rock generation was making these poor record deals and as the labels utilized their power to gain more and more weatlh, music piracy was beginning to bloom. At the time, sound recordings weren’t protected by federal copyright laws here in the US, but by state laws, they wouldn’t be protected federally until early 1972. That said even with these laws in place it was relatively common. In a lot of cases, these things were archival recordings of live shows and demos that artists either didn’t have or never released. The quality of bootlegs weren’t typically great but they served a purpose in archiving a lot of things while also giving an audience wanting more something to look for, though they were of course illegal. A lot of artists and labels were (and are) anti-piracy. Some more than others. Peter Grant, manager of Led Zeppelin for instance was notorious for his anit-piracy measures. To give you a sense of how wild this was, he was a former wrestler who would go into stores and just take the bootlegs, if not worse. There’s stories of him destroying recording equipment at shows, even resulting in the accidental destruction of a noise pollution unit used by the city of Vancouver. I also vaguely remember a story about him busting into a warehouse with the mafia and taking the wrong records by mistake but I can’t remember where I heard that one, so take it as a tall tale. Zeppelin weren’t the only ones fighting piracy however. Neil Young, Pink Floyd, Frank Zappa The Grateful Dead and many more would, in one way or another, condone and combat music piracy and legally speaking, they were in the right. Their music was being sold by unofficial sources which could maybe cut into album sales and if you’re a musician looking to get the most out of the system, that’s a red flag.
The fears of piracy would only grow as the eighties rolled in and the cassette tape became popular. Consumers did already have the ability to do home taping, reel to reel and eight tracks had already been adopted but the portability and accessibility of the cassette opened the door for a lot of people. This was, to the labels, terrifying. I’m not exaggerating when I say that the major labels were worried sick that cassettes would create a drop in album sales. In fact one of the most prominent anti-piracy campaigns came from this era, the British Phonographic Industry’s “Home Taping is Killing Music” campaign which would eventually be reclaimed as a prominent icon within piracy communities. show Pirate Bay Alongside these propaganda campaigns bills were introduced to put a tax on blank tapes which would benefit the industry for what they said would be a loss in album sales. The labels would even go to tech manufacturers to try and persuade them to add copy-protection tech to their devices - to which the companies said “take a hike.” With the industry showing its true colors as they do, many artists used their platforms to criticize the labels. The Dead Kennedys would leave a side of their EP In God We Trust Inc blank for fans to tape onto. Written on the cassette was the phrase "Home taping is killing record industry profits! We left this side blank so you can help." Other artists like Billy Bragg and Venom would play around with the BPI’s catchphrase on their own albums. The Grateful Dead would fully embrace fan recordings in 1984 with the introduction of the taper section, which allowed Deadheads who wanted to record shows to trade with other fans to have a designated spot to record in, which would lay the foundation for the modern taping scene and create a vibrant ecosystem of fan recordings that have documented a majority of the band’s shows. Interestingly, one of the biggest opponents to the labels was someone who was anti-piracy, Frank Zappa. During his speech against the Parents Music Research Center in 1985, Zappa theorized that the PMRC’s push for music censorship was partially a cover for HR 2911, one of those taxes on blank tapes. While Zappa had an immense distaste for music pirates and would even try and beat them at their own game, he saw HR 2911 as yet another move from a greedy and corrupt industry that he constantly fought. Ironically enough Zappa actually proposed the idea of music streaming around that same time. He was most likey not the first person but in his autobiography The Real Frank Zappa Book, he recalls a time in the early 80’s when he pitched a TV station like service that would hold all the music on a central server that would be accessed through a subscription. This was in the ‘80s which is wild.
Regardless of what Zappa thought though, the music industry fought against home taping up into the CD era even around the time of the Audio Home Recording Act which stated that private, non-commercial reproduction of copyrighted material is safe from infringement. You can’t get sued for making a copy of an album for yourself. Labels would only become more scared with the adoption of the internet. Now there wasn’t even a physical limitation, files could be copied and shared digitally online and it was after the destruction of this barrier that peer to peer services like Napster rose in popularity. Launched in the late 90s by Shawn Fanning, Sean Parker and Hugo Saez Contreras, the service would be adopted by millions of consumers as an easy way to get music, albeit horribly compressed and digitized. Instead of spending $17 on a CD to hear one song, they could now boot up Napster and bring it straight to them, barring internet speeds. However, Napster was predictably not going to hold up forever. It was pretty flagrant piracy. Someone had to step in sooner or later and a few did. The story from here is one you might already know. Napster is sued by Dr. Dre and more infamously, Metallica, for distributing demos and copyrighted material and that is what killed Napster. That’s at least the commonly told story but that’s not really the case. On one hand people like Lars Ulrich certainly opened up the floodgates for future litigation, but Napster could survive a band lawsuit. Lars can barely play the drums, let alone destroy a popular piracy service. What is a death blow however is eighteen different major labels going after your platform demanding the removal of songs with A&M Records, Inc. v. Napster, Inc. The short of it without any legal mumbo jumbo is that the Northern District of California ruled in favor of the labels, Napster appealed to the Ninth Circuit and then lost again due to their inability to meet the criteria for fair use and First Amendment protections, at the same time striking down Napster’s attempt to state that the mp3s were protected under the Audio Home Recording Act and siding with the label’s claim of contributory infringement. Napster, under the weight of this lawsuit and what it presented including a twenty six million dollar settlement, shut down on July 11th, 2001, before somewhat reviving as a subscription service though never returning to its glory days. For as much shit that someone like Lars Ulrich gets - which deserves its own caveat as nobody ever talks about Dr. Dre getting involved - there were way bigger fish that ate the body of Napster, those fish being the eighteen labels. I think that’s really interesting but that’s a different story.
Courtney Love was mixed on the whole thing but she made it clear that the future was here and now. The digital landscape of the internet was going to open the doors for both artists and consumers and that the industry would be stupid not to embrace it."It's not piracy when kids swap music over the Internet using Napster or Gnutella or Freenet or iMesh or beaming their CDs into a My.MP3.com or MyPlay.com music locker. It's piracy when those guys that run those companies make side deals with the cartel lawyers and label heads so that they can be "the labels' friend," and not the artists'. Recording artists have essentially been giving their music away for free under the old system, so new technology that exposes our music to a larger audience can only be a good thing. Why aren't these companies working with us to create some peace? There were a billion music downloads last year, but music sales are up. Where's the evidence that downloads hurt business? Downloads are creating more demand. Why aren't record companies embracing this great opportunity? Why aren't they trying to talk to the kids passing compilations around to learn what they like? Why is the RIAA suing the companies that are stimulating this new demand? What's the point of going after people swapping cruddy-sounding MP3s? Cash! Cash they have no intention of passing onto us, the writers of their profits."
The void Napster left led to the rise of other peer to peer services like Kazaa which would also find themselves in lawsuits and legal problems. And at this point regardless of if peer to peer was right or wrong, it was clear to the music world that something new was needed to keep up with the internet. iTunes was beginning to fill that void as a digital storefront. A song would typically cost 0.99, sometimes 1.29 and with the average album being about 9.99. This model of cheap digital music did great. By 2003 iTunes had sold twenty five million songs, that was two years after launch and note, that was when iTunes was limited to Apple devices. iTunes would ultimately become the future; it ended up being the dominant music platform of the 2000s, a gamechanging service synonymous with that time that would lay the foundation for media marketplaces. At the same time of their rise, physical media sales dropped. By 2008, digital sales had surpassed CD sales here in the United States. Digital was now king. It makes sense too. One of the biggest pros of Napster was that it allowed song by song downloading. You didn’t need to buy an entire CD to get one track you really like. iTunes bypassed that and did so in a way that actually paid. That said, there was an appeal to free music. How could there not be? iTunes, while being accessible to the internet, didn’t stop music piracy. The fact that pay was involved was a barrier for people and this was fertile ground for something new but to say “that was it” would be a shallow interpretation of that time. It’s worth understanding that iTunes played heavily into the mp3 player craze, where the amount of music you were able to bring with you was limited to the storage space on your device. Cloud storage was not really a thing, at best only in its mainstream infancy so device space did mean something. It was yet another barrier for listeners that was ripe to be fixed.
Five years after the closing of Napster, a guy in Sweden named Daniel Ek was thinking. He’s a tech guy who stuck his hand in a whole lot of different things. He had a senior role at the auction company Tradera, he was the founder of the online advertising company Advertigo, he worked for uTorrent at one point and was even a CTO for a browser game called Stardoll which is… somehow still a game? I think? Anyways, he’s seeing the lawsuits over peer to peer services and saying to himself, “this is all pretty dumb.” "I realised that you can never legislate away from piracy. Laws can definitely help, but it doesn't take away the problem. The only way to solve the problem was to create a service that was better than piracy and at the same time compensates the music industry…" After consulting with one Martin Lorentzon, who co-founded TradeDoubler which actually bought out that company Ek founded Advertigo, work on a music streaming platform called Spotify began and it launched in 2008. It’s worth stressing that it didn’t just come out of nowhere as the big next step, this giant leap forward for tech and music. There was no iPod reveal-size moment. They saw an opportunity to get in the market and ran with it. It was directly influenced by the actions taken against peer to peer, the acceptance of digital marketplaces like iTunes and the desire for free online music. Frankly it couldn’t have happened at a better time. In that window of 2008 to 2009, peer to peer services and piracy were once again becoming an issue and, perfectly enough, it was taking center stage in Sweden. The Pirate Bay trial led by the International Federation of the Phonographic Industry was underway. The charges were exactly what you thought they were. The Pirate Bay, hosting torrents of copyrighted material, had been cracked down on after a massive police raid at twelve locations. The plaintiffs ranged from video game companies like Blizzard to music labels with the three major labels Sony, Universal and Warner all part of the case. Importantly, people at that time already pointed to Spotify - and its lesser known movie counterpart Voddler - as an imperfect but good alternative to these piracy sites. It met the criteria. By the early 2010s, Spotify - alongside other Web 2.0 services and platforms like Facebook were starting to become dominant global forces. It was a novel idea and the New York Times put it eloquently. “New Service Offers Music in Quantity, Not by Song.” If Apple’s iTunes ushered in digital music’s first phase as a large-scale business, then Spotify and other services like it could be its future. Rather than selling individual tracks to be downloaded, subscription services sell monthly access to vast catalogs of music, with whatever songs a listener wants to hear streamed directly to his computer or mobile phone. The article also mentions how Spotify’s competitors such as Apple and Amazon were working on cloud services at the same time. This was a big thing and nobody knew if it would solidify. However, its selling points were already there. The cheap subscription plan that gave a wide variety of music anywhere you go and the ability to share music online through platforms like Facebook gave it a real chance and over the coming years with various changes - notably those that targetted users’ mood and preferences - Spotify became the behemoth it is now. Pandora CTO Tom Conrad would make a big revelation in 2011, that half of the United States was now paying no money to listen to music with an interesting other quote as well. “I see Spotify as largely complementary to what Pandora does. Spotify’s CEO Daniel Ek says he thinks Spotify is the future of the record store, and that Pandora is the future of radio.” I want you to keep that quote in mind and think about it a bit because we’ll get back to it. By the mid 2010s, Apple Music as well as the modern streaming platforms were just beginning. Spotify - over only a handful of years - fundamentally changed how we listen to music in the modern age but I’m sure you already know that part.
Okay, so there's a few questions you might have after that attempted brief rundown of music history. Let’s start with this one. “How did Spotify get on the good side of the major music labels?” Surely these labels who fear anything close to piracy would have some cold feet on a new service that is practically free. They were literally going after the Pirate Bay at the exact same time Spotify was coming up. Well, the answer was pretty simple, they didn’t. At least at first. To quote the fantastic book Spotify Teardown “When Daniel Ek, Martin Lorentzon, and others first developed Spotify, they famously did so by building on a collection of music they did not hold any rights to themselves. The history of music streaming thus begins with an act of free riding – or arbitrage. As arbitrageurs of music, Ek and his colleagues would obtain scarce goods at no cost, with the aim of making revenue through advertising and later subscriptions, while others involved in the transaction – the composers, musicians, music publishers, artists, and repertoire owners – experienced an implicit loss.” In fact pirating music in this way was the backbone of their earliest years. They took music from their employees' computers or other places of unknown origin, put them on the servers and ran with it. It was a piracy service with the intent of beating piracy, which I think is very funny. Of course, Spotify did have issues with the major labels notably Warner who threatened to pull music from free streaming platforms because they were "clearly not positive for the industry". This dispute would be solved after Warner was sold to Russian businessman Len Blavatnik but that’s not the entire story. In general Spotify got on their good side when they began their subscription model and started to negotiate with the labels. They did that by not only licensing the music and dealing with copyright complaints but by giving them stocks in the company. To quote Variety, The company has managed to avoid the kryptonite that felled or foiled many of its predecessors — opposition from Universal, Sony and Warner, the three major music groups and the world’s primary music-rights holders — by making them partners on multiple levels, including giving them a piece of the action in the form of a combined interest in Spotify that has been reported to be as high as 18%, although knowledgeable sources tell Variety it is actually “much lower.” In fact, the major labels actually sold their stocks in 2018 after Spotify went public. Sony, holding the largest stake, sold half while Warner sold 75%. Sony’s sale got them $750 million dollars where Warner got around $400 million. It’s good to get this out of the way because one, it’s very important as to how Spotify justified its existence but second, people mistakenly state that a majority of Spotify is owned by the major labels and this isn’t true. According to the Future of Music Coalition, they only have about 7% which is far from some total control that people state they have. That said, those three big labels still have a lot of control because Spotify’s business model relies on their cooperation. There may be owners of Spotify - who are interestingly not Ek and Lorentzon who lost their majority shares - but the major labels are what make or break the service. If liscensing deals are cut, then it’s a big, existential threat. Spotify exists because the major labels gave them permission to exist, not because Spotify’s answer to piracy was objectively great. I think this central conflict really needs to be understood because while Spotify is a face of the music industry, it’s not the one really calling the shots. It’s part of a much larger monolith and while I personally think it’s noticeably awful in certain ways, its sins aren’t unique and have long histories.
Second, how did Spotify keep in good graces with the public? Well, they framed it as a lifestyle. Spotify is in a unique position as they don’t offer a core service that no other streaming platform has. You can get the same music just about anywhere else. To keep Spotify around, they need to build up hype again and again and simply put, they have. They have the playlists, moods and social media capability to keep an audience and this has no doubt helped them in the long run. That’s not even the end of it. They’ve collabed with everyone from Facebook to Tinder and Uber. Spotify promoted streaming and by extension their company as a part of your everyday life. Music is a social thing so streaming and Spotify should be too. It’s a new way of living, the musical side of the internet age. Sidenote: this is actually a great shield for boycotts and the like. If an issue arises and a boycott is planned, consumers have to weigh whether the effort of the boycott or the cheap expanse of music is more valuable - and the resounding answer to that has been - not to spoil further revatlions - the latter. As I stated earlier a majority of people listen to music through streaming services, it’s their go-to way of consuming that media. The boycotts - while well intentioned - are fighting a Sisyphisian uphill battle. It’s a choice between hard ethics with no guaranteed outcome and literally 99.99999% of music the average music listener could ever want to hear. It’s pretty easy to understand why that second option is more appealing. Third, did Ek or Lorentzon ever have histories with music? I’m not sure, honestly. They both primarily have backgrounds in advertising and from what I can tell they had zero experience in the music industry before Spotify. Ek knows how to play guitar but as far as being intrisincially tied to music, it seems a bit dubious. I could be wrong and I say this just from a personal perspective, but from what I could find it doesn’t seem that way - though this point ultimately doesn’t matter. They were not the first strictly business people to enter the industry and they sure won’t be the last. Fourth. “Did Spotify and streaming actually complete its goal of beating out piracy?” Its hard to say definitively. A report by YouGov back in 2018 showed that music piracy had fallen dramatically after the surge in streaming so in a way it kneecapped the movement but not entirely. Instead piracy has just adapted to the times. Stream ripping is now a big thing rather than torrenting. Piracy isn’t dead though it's hard to ever beat it. The goal was to create an accessible and free or cheap, distribution platform for music and they did it. The thing to note however is that while this might be a cheap alternative to file sharing, someone else is paying for the convenience you have and we’ll get to that shortly. And here’s the final question. “Did Spotify create a better world for the industry and music as a whole?” No. Not really. Spotify was never going to correct systemic issues within the music industry. Artists such as LOONA still sign predatory deals and Black artists are seemingly still paid less than their white counterparts. Beyond the sleazery however the major systemic issues are still in place - and some of these we will inspect further. Artists are still signing away their masters, artists are still relying heavily on touring to make a living and artists are still getting the short end of the stick in regards to royalties. But maybe there was some optimism at first. Coming out of the Napster era was this new service where artists could theoretically bypass major labels to find success. They could get paid in some form and create their own musical world. The industry didn’t need to be consolidated, it could be open. That turned out to be true, things are much less centralized, but you’re not getting paid. The reality of it is grim - streaming is the already brutal and uncaring industry taken to its extremes. You wanted a change in the music world, be careful what you wish for. Spotify isn’t a savior, it’s the monkey’s paw that curled in a very certain way.