Apple Gains as Songwriters Come Out Against Spotify
In 2017, Spotify launched its Secret Genius Awards annual event to honor songwriters and producers behind some of the streaming platform’s most-played songs. But now some of those same honorees are speaking out about something much less celebrated — Spotify’s plan to appeal Copyright Royalty Board rates, along with Google, Pandora and Amazon.
“We’re hurt and disappointed,” the dozens of songwriters wrote in an an open letter to Spotify on Tuesday (April 9) addressed to Spotify chief Daniel Ek and shared with Billboard. “You created a songwriter relations team and ingratiated Spotify into our community. We know that you are not the only DSP appealing the Copyright Royalty Board (CRB) rate determination. You are, however, the only provider that made us feel we were working to build a modern music industry together.”
It seems silly, from a PR standpoint, that Spotify would pick this battle (along with another two at the same time). But how could the company know that songwriters — and a good segment of the industry — would come together with such force? Historically musicians and their industry don’t exactly agree, delivering a fragmented and unfocused protest at best. Perhaps songwriters have been emboldened by the Music Modernization Act, or the pervasive atmosphere of protest we live in now, or the vilification of the tech industry by its own actions, led by Facebook. A combination of the three is most likely.
Spotify will probably be the loser in this PR war. And the winner might be the tech giant that’s sitting this one out, according to Variety:
Ultimately, Apple, which for years was the company the music industry most loved to hate, is now in an enviable position. If Spotify wins its appeal against the CRB — which is considered a long shot — Apple benefits by paying reduced royalty rates. If Spotify loses the appeal, Apple, by not joining the other streamers, looks like the hero. And
if,at the urging of songwriters, artists start jumping on a #CancelSpotify bandwagon, Apple Music stands to gain subscribers.
“Unlike Spotify, music is not Apple’s core business, thus allowing [it] to sit this one out, with Spotify taking the heat and the legal bills that follow,” says Jeff Rabhan, chair of the Clive Davis Institute of Recorded Music at NYU Tisch. “By choosing to watch this war from the sidelines, Apple has made a brilliant move by making no move at all.”
Spotify’s Auto-Play Means Less Royalty For Songwriters
An astute observation by Billboard:
Although songwriters, publishers, or everyday people may not be aware, Spotify — like YouTube — has now moved to a model that auto-plays songs after a user listens to one they selected. […]
On the plus side, what this does is keep listeners engaged on the site, which is a benefit that Spotify likes. And it has the potential to turn listeners on to more music, a benefit that all rights owners, publishers, songwriters, labels and artists should like. And it steers payments to artists and songwriters whose songs weren’t chosen to be played.
But it represents a downside in per-stream payments for songwriters and artists, too. Since the payout pool is divided by streams, the more streams that occur in a month, the further the per-stream payout decreases. In addition to songs that users choose to play, their devices will automatically play other songs after they hear the song they wanted. Who knows how many additional plays accrue due to automation — but it’s safe to say those plays are further diluting the per-stream payout for artists and songwriters whose songs the consumer chooses to play.
I also believe Spotify’s auto-played songs fall under ‘non-interactive streaming’ (AKA ‘internet radio’). This means that mechanical royalty does not apply. So this auto-play feature may partly serve to lessen a user’s amount of ‘interactive’ streams, allowing the platform the decrease its overall royalty pay-out.
Please correct me if I’m wrong. But if I’m right, and you’re a Spotify user, maybe think about turning off the auto-play mechanism in the app’s settings.