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This week we talk about how Spotify's royalty changes will affect artists in 2024 and what the resulting outrage says about the false narrative much of the industry is living.
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Credits:
Guest: N/A
Host: Travis Ference
Editor: Travis Ference
Theme Music: inter.ference
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Just when you thought streaming royalties couldn't get any worse, Spotify pulls
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a hold my beer move and tells us that our music may no longer earn
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royalties. But as bad as it all sounds, I think this may be an opportunity
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to change the way we think about this business.
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You so in case you've somehow missed the
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hundreds of articles and videos talking about Spotify's royalty changes, here's a quick rundown
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of what's changing. There are three main changes to Spotify's
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royalties. One, they're instituting a penalty fee for
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tracks that are found to be using artificial streaming. Now, if you're unfamiliar,
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there are entire bot farms streaming third party playlists
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24 hours a day. I think at this point, any serious artist
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should know that paying for playlist placements, especially on a
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bot playlist, does far more harm than good. So I think it's safe
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to say that we shouldn't have any issues with this change. The second change is
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in regards to what Spotify calls functional genres, I. E.
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Noise recordings. People have long been taking advantage. I
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use air quotes on that one of the rise of things like ocean sounds and
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white noise being played while people sleep on loop. I don't personally have an
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issue with people putting up non musical content, but I do agree with the changes
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Spotify is making. What they're doing is increasing the minimum track length for
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these functional genres up from 30 seconds to 2 minutes. They also
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intend on working with licensers to reduce the value of a noise stream
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versus a music stream. Now, at first glance, you might feel that this
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is taking money out of the pockets of creators, and that is technically
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true. But if you're an actual musician creating art, you know that you spend
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days, if not weeks, on a track. These noise tracks can be made and
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uploaded in a matter of minutes. So I think we can all agree
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that the more money going into the pile of royalties being distributed to real
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artists, the better. And speaking of royalties distributed to artists,
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that brings us to the third and most important change track
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monetization eligibility. Starting this year, a
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track must have reached at least 1000 streams in the previous twelve months
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in order to generate recorded royalties. What happens to the money that would
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have been earned by those tracks that don't meet the threshold? Well, to cite the
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Spotify website quote, Spotify will not make additional money
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under this model. There is no change to the size of the music royalty pool
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being paid out to the rights holders from Spotify. We will simply use the tens
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of millions of dollars annually to increase the payments to all eligible
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tracks rather than spreading it out into three cent payments, end
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quote. The unfortunate part of that statement is that Spotify had to put into print
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how pitiful the payout to artists already is. Now, part of Spotify's
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reasoning behind this is that many distributors have payment thresholds that must be met
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before royalties are even paid to the actual rights holder. I believe CD
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baby, for example, has a threshold of $10, while ditto plus is a whopping
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150 british pounds. That should be criminal. They are literally
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keeping your money for months, if not years, maybe forever.
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So since tracks with less than a thousand streams are definitely not
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meeting a lot of these payment thresholds, Spotify has decided that money is better
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served going into the royalty pot for tracks that are, quote,
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monetized, which by their calculations would increase payouts by nearly $1
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billion over the next five years. I honestly don't know where I personally want to
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stand on this because if this change actually results in real independent
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artists making more money, I think that's great.
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But it is setting a very bad precedent for artists not
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being paid for their art. Even though we're talking about potentially single digit
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dollars or less, you're still making it okay
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to devalue someone's work, which I am not cool with.
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Obviously there's been an outcry of frustration with these changes, everything from people calling for
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Spotify boycotts to threatening to cancel their subscriptions. So that brings us to the part
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of this video that's going to be nothing like any other video you've seen on
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this topic because this is progressions, and deep down inside, this is secretly a
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self help podcast. Now, before you say, travis, what right do
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you have to talk about releasing music? You're just a mix engineer.
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And I have in fact been involved in releasing several
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projects to varying degrees of success. And let's not
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forget that I've been putting this podcast out into the world for more than
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three years now. Now, it might not be music, but trust me, I felt
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all the ups and downs and had all the thoughts of quitting that every musician,
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artist and producer watching this may have had at one point. When I see the
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reaction to Spotify's decision, there are two things that if we changed about
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ourselves, then I think the industry as a whole would be better off. First is
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this obsession over forward facing metrics. We're focusing
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on the wrong things. Spotify's choice to make the stream threshold
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1000, I think, has triggered a lot of people because the
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dreaded less than 1000 sign has already plagued so many
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of us. Releasing a song and not passing 1000 streams has for
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years been such a blow to an artist's confidence. Now, ultimately, I
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blame social media for this. The like has become a forward
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facing metric for how good something is. It's truly unfortunate that this is
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where the world is at, but this is where we are. I'm sure that it's
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not a coincidence that Spotify opted to have a similar public
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metric by displaying the stream count. Think about what that's done for their marketing and
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branding. Artists sharing their year end streams, announcing that they hit their first
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million. Do you see anybody posting about getting a million streams on Apple? No. The
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world has us so focused on these public metrics that we forget that
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this is a long journey. It takes time to build a fan base. A career
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is the compounding effect of everything we do. It's not just one song. And
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that goes for whether you're an artist, releasing music or behind the scenes in the
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production process. I feel this all the time. I want a project I work on
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to blow up as much as the artist does. So we should all be taking
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pride in the work we're doing, focusing on the enjoyment we get from making the
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things we're making and not on the number of streams or likes it has. Let
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me ask you this. Does 1001 make you feel better than less than
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1000? Let's not forget that less than 1000 could be
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999. Is it different? No, it's not. Your stream
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count is not a reflection of the quality of your music. It's a reflection of
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how many people have heard your music. You can't get caught up on the results.
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You've got to focus on the process. I talk about this on the podcast all
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the time. That's what brought you into music in the first place, right? The process
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of making music. Now that we've shifted our focus a bit away from these metrics
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that we all seem to want to live or die by, let's talk about how
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we identify what's the narrative that we've painted for ourselves. Right now
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it feels like we've painted the story of the starving artist that is being kept
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down by the big corporate DSP devils and pushed to the wayside by the major
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label artists. And look, that's not an entirely
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exaggerated description of the challenges of breaking through in the music industry.
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But that doesn't mean we should believe that's who we are. Our experiences all
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shape our story. If we let the setbacks and mistakes define who we are,
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then we'll become a self fulfilling prophecy. Example. If you identify
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as someone who fails to market their music effectively, then you won't take any
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steps to learn how to market your next single any better than your last. On
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the other hand, if you identify as a person that grows from hardship and
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is excited to learn how to beat a new challenge, you will eventually
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crack that code. And look, this stuff is hard. I promise you that I'll be
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tracking the views and downloads on this episode nonstop for the next week,
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despite the fact that I just told you to ignore all that. And while I'm
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doing that, I'll be trying my best to continue to identify as someone who is
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growing a podcast and is excited for the challenge to win people over one
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by one. But I will 100% have
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moments of absolute frustration. And by the way, this is a great moment
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to hit the subscribe button. So think of the artists that inspire you. Now we'll
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never know what they believed about themselves when they were starting out, but I think
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it's pretty safe to assume that none of them believed that they would never cross
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a thousand streams. There was an artist in the UK who was playing hundreds of
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gigs a year, self releasing his own albums, collaborating with as many musicians
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as he could, and building an audience on YouTube before he finally broke through.
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When he did, he hit number one on iTunes as an unsigned artist, and
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would eventually become the first artist to have a song hit 1 billion streams on
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Spotify. We're obviously talking about Ed Sheeran. Despite the many setbacks I'm
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sure he encountered, I would imagine that the story he believed about himself
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was always that he would be a successful musician and
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songwriter. You can't put that amount of work in unless you truly believe
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that that is your story. So let's return to this Spotify royalty nonsense. What are
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you going to do differently with your music career because of it? Nothing. Fuck
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it. Because it doesn't matter. Make music because you love making music
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and you'll build your career in music regardless of how many pennies Spotify is
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or isn't giving you. It doesn't matter what metric the world thinks should define
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you. You define yourself and you decide what success is to.
Here are some great episodes to start with.
