Spotify Backlash on the Way They Pay Artists

Spotify has been receiving backlash for the way that the company pays contributing artists. Smaller musicians have come forward and said that they feel the way Spotify distributes its wealth- in a “pro rata” model- favors bigger artists. A pro rata model is based on the percentage of listeners. For example, if one artist has the rights to five top tracks that make up two percent of what is played in a month by subscribers, that artist receives around two percent of the money Spotify makes in a month. Some believe that this makes sense whereas others think this is unfair.

What is another way of distributing the moolah? Musicians are pushing for the company to switch to a “user-centric” model, where the money that a subscriber pays for their Spotify account each month is distributed among the artists they listen to. For example, if a user listens to only one artist, the majority of the money they are paying per month to stay subscribed to Spotify will go to that artist. Experiments performed in Finland have verified that this would allow for smaller artists to get a bigger piece of the pie.

However, it would end up costing Spotify a large sum of money, meaning less money could actually end up going to the artists and more of it goes to Spotify to fund the new model. Unfortunately, it has been confirmed that there are plenty of scammers out there playing their own tracks over and over again on a huge scale in order to get more money than they put in with their Premium accounts. Adopting the “user-centric” system could prevent this because the scammers are only getting a portion of what they put in, not more, based on the way the model works.

Plenty of artists are upset by Spotify’s current system, including Radiohead’s Thom Yorke, British electro artist Jon Hopkins, the Black Keys, and Taylor Swift. They believe that Spotify is favoring already rich artists like Drake, Ariana Grande, and the Chainsmokers instead of supporting small musicians. According to The Rolling Stone, Yorke told Sopitas in 2013 that “as musicians, we need to fight the Spotify thing.”