Artist-DSP relationships in 2024: Top five trends to watch

By: Chuck Fishman

Published: 2023-12-11

This is the final installment in our five-part series comparing “For Artists” features on streaming platforms. You can browse our product feature matrix for the full breakdown, or catch up on previous installments in the series below:

Throughout this series, we’ve explored the many options that artists and their teams have to leverage DSPs to reach, grow, engage, and monetize a fan base. We compared DSPs’ “For Artists” platform offerings across profile customization, data analytics, and fan marketing, diligently tracking the status of over 80 features in a dedicated product matrix.

What did we find? The good news is that on the whole, DSPs seem to be growing their feature offerings for artists. We have updated our product feature matrix several times since the first part of this series was published (e.g. TIDAL for Artists finally launching in September 2023, and Apple Music adding real-time streaming analytics in November 2023), and will continue to track the market as it evolves.

Our analysis also identified major opportunities for feature improvements across all major DSPs. Replies to a tweet from Spotify product leader Chris Stoneman back in January 2023 revealed several features artists would like to see added to their FA platforms and public profiles — many of which are consistent with the gaps we identified in our research:

There are also several new opportunities for artists to engage fans in more interesting ways as DSPs link multiple kinds of media into their user experience. For example, an Amazon Music For Artists user can link their profile with a Twitch account to notify Amazon Music followers when they start a livestream. Apple Music pulls in and promotes official relevant radio and video content on an artist’s profile under the “More to Hear / More to See” banner. Spotify recently launched “Clips,” which allows artists to upload 30-second video messages about new releases, tours, or any other announcement. One could see potential future integrations of relevant podcasts or audiobooks into Spotify artist profiles, as the platform continues to pursue non-music audio as a key part of their growth strategy.

An important question follows, though: How feasible are all of these improvements in light of market trends?

Based on how news is shaping up at the end of this year, we predict the following five industry developments will significantly impact future relationships between artists and DSPs, and the ability of DSPs to address artists’ career challenges and needs.

1. Shift in streaming payout models — especially at Spotify

Spotify easily topped our “artist-friendliness” rankings across all three product areas we tracked (profile customization, data analytics, and fan marketing/e-commerce). This is not a surprise to us considering that Spotify for Artists is the longest-standing FA platform among all major DSPs, celebrating a decade of existence this year.

But when it comes to royalty payments, public perception of Spotify is a whole different story.

Starting in 2024, Spotify will not pay out streaming royalties for tracks that generate under 1,000 streams a year. Importantly, this streaming threshold resets every year, and is only calculated on the track rather than project level. For instance, if a track hits 999 streams in year one, and 999 streams again in year two, those cumulative 1,998 streams will not be paid out at all, because both years’ total streams fell under the threshold. In another example, if an independent artist released an album with 10 tracks, and each of those tracks streamed just under 1,000 times on Spotify within a year, the artist would receive no royalties for that consumption.

According to an official blog post, Spotify believes these changes will claw back $40 million in misallocated streaming revenue for the company per year. The main argument in favor of the threshold — which mirrors new payment rules being implemented at other DSPs like Deezer — is the need to clamp down on streaming fraud and protect real independent artists from having to compete with hundreds of thousands of unknown, faceless artists. (Industry executives estimate that as much as 10% of streams on major DSPs are fraudulent.)

That said, completely removing the earnings potential for tracks and albums below the threshold seems to run counterintuitive to the spirit that put Spotify at the top of our “artist-friendliness” rankings. With Spotify commanding 30% of streaming subscription market share, there will hopefully be a clear path for artists to leverage on-platform tools to drive their streams past the threshold, in addition to attracting and retaining long-term fans.

2. Layoffs and personnel changes

The tech industry has seen over 250,000 job cuts so far in 2023 — a 50% increase from the year prior.

Music streaming has not been immune. A reverse-chronological timeline:

A recession or continued pullback in technology investment could strain DSPs’ overall development resources, and slow FA platforms’ expansion in particular.

3. New competition from social media platforms

Social media platforms are acting on their growing influence on music discovery, consumption, and fandom — developing many music features that are, in some cases, directly competitive with the major DSPs.

Perhaps the most blatant example of this competition comes from TikTok. Alongside their parent company ByteDance, TikTok now operates a fully verticalized stack for music creation, marketing, and distribution in-house:

Instagram has been steadily rolling out new music-related features over the last year, such as the ability to add songs to photo carousels and Notes. Spotify has also been catching up to the influence of Instagram Reels, launching dedicated charts for the format in Mexico and Brazil in July 2023. That said, there is currently no equivalent of an “FA” platform within Instagram, Facebook, or Meta at large, meaning that independent artists can’t easily see where and how much their music is being used across these platforms.

Separately, X was hit with a $250 million lawsuit from music publishers in June 2023, implying that industry relationships with the platform formerly known as Twitter are at a standstill.

As we detailed in our recent Music Marketing Data Bootcamp, artist teams have mostly resorted to building their own stacks of off-the-shelf, third-party data tools to meet their info needs and automate their digital marketing plans. That said, we can expect more first-party analytics offerings from music-forward social platforms like TikTok and Instagram to enter the picture next year, especially given how goodwill between independent artists and major DSPs like Spotify seems to be eroding in real time.

4. Rise of niche streaming services

For artists who feel they may be crowded out or disregarded by the mass-market ambitions of major streaming platforms, there are a variety of other DSPs in the landscape that focus on more specific genres, geographies, community behaviors, and payout models.. In a world where loyal, dedicated fan bases are the key to career longevity, perhaps it’s not a wide audience an artist needs to reach, but a niche one.

Notably, Apple Music is the only major DSP to date to buy out a niche streaming service. In August 2021, they acquired classical streaming service Primephonic, which was rebranded in March 2023 to Apple Music Classical and is available to existing Apple Music subscribers at no extra cost.

Below is a non-exhaustive list of examples of niche music streaming and fan-engagement platforms beyond the major DSPs, building on Water & Music’s original analysis from 2021.

Boomplay

Founded in 2015, Boomplay focuses not only on music from the African continent, but also on “genres of music that originated in Africa but are loved and consumed by fans across the globe.” Over the last few years, Boomplay has been expanding its industry partnership slate, including a curation partnership with TikTok and a sample pack collaboration with Splice. On-platform, they also offer their own “Boomplay for Artists” dashboard with features for streaming analytics and editorial marketing, which could be useful for artists looking to better engage with African music consumers.

Audiomack

Originally launched in 2012 as a hip-hop mixtape platform, Audiomack has since evolved into what some called the “SoundCloud of Hip-Hop,” including a recent focus on music from the African continent. Similar to SoundCloud, Audiomack hosts a combination of direct user uploads and a vast catalog of music from most third-party distributors; artists can claim their official profile, check their analytics, and interact with fans via the Creators at Audiomack offering. Recent industry partnerships from Audiomack include a curatorial partnership with African 24/7 music channel MTV Base and an A&R partnership with LVRN, signaling their commitment to amplifying emerging artists on their platform.

Sound.xyz

Founded in 2021, Sound allows artists to upload and sell their songs direct-to-fan as NFTs, at prices that the artists set themselves. Previously gatekept only to approved artists, the platform closed a $20 million funding round in July 2023, and is now open to any independent artist who wants to apply. Artists who join Sound will be able to discover who their top fans are through NFT sales on the platform, and can track other collectors who are supporting similar artists to identify and target potential new fans. NFT owners can also leave comments on those corresponding songs, with a UX similar to SoundCloud. In terms of payment, Sound claims that 100% of the earnings from the sale of an NFT goes back to the artist; to date, the platform has paid out nearly $6 million in NFT revenues from ~780,000 fans to 1,200 artists, according to data provided by Sound and cross-chain data compiled on Dune.

(Other new platforms leaning on blockchain technology to rethink fan experiences and payment models for music include Nina Protocol and Sona Stream. We previously covered the rise of Web3 music aggregators and discovery platforms in this article.)

5. Influence of generative AI

The escalating hype around generative music AI is acting as an industry litmus test, revealing and amplifying several long-standing macro issues such as streaming fraud, content moderation policies, and the potential displacement of artists’ jobs.

All eyes are on how major DSPs — and their major-label equity holders — will treat generative AI content against the backdrop of the tens of millions of tracks already competing for attention on their platforms.

The current state of affairs with DSPs and AI is both proactive and cautious:

Beyond the major DSP landscape, labels and distributors are moving proactively towards signing deals with AI startups:

Regardless of where most of its commercial activity will land, the new paradigm of music AI will transform artist-platform relationships at the most fundamental level — namely, by redefining who an “artist” can be in the first place, not to mention which of those artists should get the money and insights they need to succeed.

Cherie Hu contributed research and editing to this article.

We are dedicated to keeping artists and their teams informed about the wide range of tools available to optimize their online presence, engage with their audience effectively, and ultimately thrive in the increasingly competitive and fast-paced world of digital music.

We will update our product matrix and provide more analysis as DSPs and other relevant platforms continue to evolve and innovate. If there are any key features or trends you think we missed, please give us a shout at members@waterandmusic.com.