Yesterday marked Spotify’s two-year anniversary in the US, though this weekend, the streaming music platform was in the headlines for all the wrong reasons. On Sunday, Radiohead’s Thom Yorke and Nigel Godrich announced their decision to remove many of their own records from Spotify, including Yorke’s solo album, The Eraser, the full-length debut by Atoms For Peace, Amok, and the full-length debut by Godrich’s UltraÃsta. Godrich proceeded to berate Spotify for the amount of money they pay artists, writing on Twitter, “Someone gotta say something. Its bad for new music.. He even went as far to say Pink Floyd would be unable to afford the recording sessions for Dark Side of the Moon if people listened to Spotify instead of buying records in 1973.
Today, Spotify responded to Godrich’s claims in a statement issued to Music Week:
Spotify’s goal is to grow a service which people love, ultimately want to pay for, and which will provide the financial support to the music industry necessary to invest in new talent and music… We want to help artists connect with their fans, find new audiences, grow their fan base, and make a living from the music we all love.
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% 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.
Not long after, Godrich took to Twitter to issue a response to Spotify’s response:
So Spotify say they have generated $500 million dollars for ‘license holders”. The way that Spotify works is that the money is divided up by percentage of total streams. Big labels have massive back catalogues so their 40-year-old record by a dead artist earns them the same slice of the pie as a brand new track by a new artist. The big labels did secret deals with Spotify and the like in return for favourable royalty rates. The massive amount of catalogue being streamed guarantees that they get the big massive slice of the pie (that $500 million) and the smaller producers and labels get pittance for their comparatively few streams.
This is what’s wrong. Catalogue and new music cannot be lumped in together. The model massively favours the larger companies with big catalogues. They need the new artists to be on the system to guarantee new subscribers and lock down the “new landscape.” This is how they figure they’ll make money in the future. But the model pays pittance to the new artist right now. An inconvenient fact which will keep coming up. I feel a responsibility to speak up when I see something going on which I think is unfair. I’m not bitching about not getting paid. It’s about standing up for other artists’ rights. It’s up to streaming providers to come back with a better way of supporting new music producers. It’s not for us to think up how it could work. That’s your department.
Godrich concluded his rant by linking to an article Damon Krukowski wrote for Pitchfork about royalty payments offered by Spotify and other streaming music services.