Radiohead front man Thom Yorke and producer Nigel Godrich took to Twitter yesterday to rail against Spotify and announce that they would be removing some of their music from the popular a la carte music streaming service as part of a "small meaningless rebellion."
The duo announced that they would remove their collaborative super group Atoms for Peace's album AMOK, in addition to Yorke's 2006 solo release The Eraser and Godrich side project Ultraista's self-titled 2012 release. All of Radiohead's albums that were previously on Spotify remain on the service.
Godrich used fits of tweet to detail that the duo was departing from the service because the current model isn't serving new artists. Specifically, he says "new artists get paid f**k all with this model. It's an equation that just doesn't work," and "Meanwhile small labels and new artists can't even keep their lights on. It's just not right".
The new economics
Spotify generates revenue via a multi-tiered subscription plan. Users can access the service for free, but are subject to visual ads on the desktop app and audio ads in-between tracks. However, users also have the option of subscribing to the "unlimited" ad-free plan for $5/month on their PC or a $10/month "premium" plan that allows users to access ad-free music on any device supported by the service. The company reportedly now has nearly 25 million active users, six million of whom are paid subscribers.
In response to the Godrich and Yorke's Tweet-bellion, Spotify released the following statement:
"...Right now we're still in the early stages of a long-term project that's already having a hugely positive effect on artists and new music. We've already paid US$500m to rightsholders so far and by the end of 2013 this number will reach US$1bn. Much of this money is being invested in nurturing new talent and producing great new music.
"We're 100 percent committed to making Spotify the most artist-friendly music service possible, and are constantly talking to artists and managers about how Spotify can help build their careers."
One billion dollars is indeed a lot of cash, but that doesn't necessarily mean artists are getting paid. The key word is "rightsholders." According to Spotify's website, the company says it "has direct agreements with record labels, digital distributors, aggregators and publisher collecting societies, to whom we regularly pay royalties, and who then pay recording artists and songwriters according to their specific contractual agreements."
Learn to work the system
The lesson is that artists must own their own work and use technology to help them gain an audience and generate revenue—something a platform like Spotify can help them do. Godrich's above criticisms that labels won't be able to keep the lights on is curious in that technology allows artists to distribute their work without the assistance from—or revenue sharing with—a major or independent label.
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