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Has Spotify made itself “loud & clear”?

First shared by @MikeShupp in #music-streaming

Last week, in the wake of several controversies (including public demonstrations and governmental probes) over the perceived unfairness of streaming economics, Spotify released its latest Loud & Clear report. The report intends to present precise, digestible data about how the company calculates streams and payouts to enhance transparency. The company’s founder Daniel Ek tweeted a lengthy thread suggesting: “Not only is streaming driving record revenues for the music industry, but there are also more artists sharing in that success than ever before”.

The report sparked a conversation and raised questions from the community about Spotify’s data. While Spotify does show growth in several revenue thresholds, the exact proportion of artists who are able to make six figures from streaming is less clear. It’s been widely reported that the amount of recorded music in the world is proliferating at dizzying rates, with huge surges in activity being reported by distribution platforms — making it difficult to deduce whether these numbers are merely a side effect of exponential growth across the board.

As @Pekeating points out:

“These #’s are cool but are also misleading without showing the total number of artists on the platform. The relative % of artists making $100K is shrinking.”

This cherry-picking of favorable thresholds is a stark reminder that data presentation is subjective, often omitting sobering truths to enhance the message of marketing materials. In fact, as @seaninsound notes, it’s become increasingly difficult for artists to find fans using the platform despite Spotify’s lauded discovery algorithms (we covered this issue in more depth here). Frequently, artists and management teams feel forced into investing huge sums in tools like Marquee just for “the chance to be listened to, even by their own fans” (in the incisive words of Irish label Fourth Strike).

Another salient gap to consider in Spotify’s data is that the company can’t provide any insight into the percentage of revenue generated that makes its way to artists. Many industry observers have argued that the pitiful state of affairs for many artists in the music industry is due to unfair splits in streaming revenue from record labels due to the dominance of streaming giants. This issue has only been bolstered by recent high-profile court battles over streaming revenue, like the legal action taken by Four Tet against his label, Domino Recordings.

Another element of the report that struck many of our community members as odd is Spotify’s definition of “professionally aspiring” musicians. Spotify chose to dedicate an entire section of Loud & Clear to this group, which they define as “having released 10 tracks and achieving over 10,000 listeners per month.” As @danfowler notes, this disqualifies the vast majority of artists on the platform, resulting in a “professionally aspiring rate” of just 2.5%.

Finally, @seaninsound notes, even if an artist does qualify as “professionally aspiring” by Spotify’s standards, that may not prove they’re able to make a living as an artist. As @jakestandley posited, there’s a massive difference between making $10,000 through the platform and making $100,000.

Rather than devising their own definitions, it would be interesting to see what results would materialize if Spotify directly surveyed the very artists who use their platform — allowing them to have the final say over whether they feel that they’re able to build a sustainable career through streaming. If other third-party data sources are any indication, the results of such a survey may paint a picture not so much of continued growth, but rather of an increasingly difficult uphill battle towards financial sustainability in recorded music.

Further reading: Just how difficult is it to make a sustainable career through streaming?

Should NFTs be part of your back catalog strategy?

First shared by @sydmusic in #web3

One of the most notable recent trends in music consumption has been the rise in back catalog listening.

Recent reports from MRC Data have estimated that back catalogs rather than new releases generate 73% of the US music market revenue.. While some sources attributed this trend to comfort-listening during lockdowns, this trend has persisted throughout 2021, suggesting that back catalog dominance may be here to stay.

Concurrently, @sydmusic noted an example of a re-released EP by Oshi (a crypto-native rapper) which sold for over 6 ETH (~US$20,000 by today’s rates) when auctioned through Catalog. @BlackDave shared advice he frequently gives to artists experimenting in Web3: to “re-release a song they loved that didn’t get its moment in the sun” as their genesis drops. He also highlighted that many artists who have successfully experimented with Web3 (like LATASHÁ) have opted to auction off old or unreleased songs rather than new material.

This approach holds several benefits: it allows artists to wring as much value out of their back catalog as possible; it appeals to “superfans” who may be more naturally interested in ‘from the vaults’ material, and (as @Bas Grasmayer notes), it allows legacy artists who may have “lost momentum” in the traditional music industry to build a comeback narrative, fuelling nostalgia around older releases (Snoop Dogg’s drop celebrating 30 years of Death Row Records is a good example of this).

At Zoratopia’s SXSW panel one of the key themes that emerged was the importance of seeing Web3 as one part of a holistic, varied release strategy, rather than artists potentially making themselves vulnerable by “putting all of their eggs in the Web3 basket.” For artists who are Web3-curious, putting back catalog tracks up for auction could be a low-risk way of extending the longevity of their music, allowing a new, tech-savvy generation of fans to rediscover their work.