As passersby approached the corner of W Erie St. and N Franklin St. in the midst of Monday’s snowstorm, they heard the sounds of a marching band. But from a closer distance, observers could see that the marching band was actually a group of 50-odd music workers protesting outside of Spotify’s downtown office. Dressed in green and wielding picket signs with demands like “stop fighting artists,” the workers demonstrated to the drums-and-horns soundtrack of Chicago Soundbox.
In a rallying cry heard outside of 30 Spotify offices around the world, members of the Union of Musicians and Allied Workers (UMAW), which organized the demonstrations, pushed for the Union’s Justice at Spotify Campaign. The campaign demands that Spotify increase its payout to artists, that the company be more transparent about its finances, and that it stop fighting artists in court for lower royalty rates. Since launching the campaign, the Union’s supporting petition has garnered over 27,500 signatures. Among the signees are King Gizzard and the Lizard Wizard and Fugazi’s Guy Picciotto.
“We want to announce our presence as a union and an effort to organize music workers around the world, and to deliver our demands formally to Spotify,” said Andrew Clinkman, a member of the UMAW’s Chicago chapter, during an interview before the protest.
Though dissatisfaction with Spotify isn’t new, the pandemic stoked irritation with the streaming giant. When music venues subsequently shuttered, streaming became the only way for artists to generate revenue. Meanwhile, Spotify’s valuation more than tripled to $67 billion since the onset of COVID-19. That’s why the nascent UMAW — established last summer — launched the Justice at Spotify Campaign in October 2020.
“There are a lot of musicians whose entire stream of income evaporated, and they don’t have a way to sustain themselves,” Clinkman said.
Spotify pays $.0038 per stream, which means a song must be streamed 263 times to generate $1. To earn the equivalent of working full time at $15 per hour, an artist’s song must be streamed 657,895 times per month. For multi-piece bands, this number applies to each band member. Hitting these targets is plausible for mega stars like Billie Eilish, whose “bad guy” has earned over $650,000 by this metric.
“I don’t know many folks at all who are reaching those levels of streaming performance,” Clinkman said.
For emerging artists and those working in niche genres, streaming provides little more than pocket change. To remedy this, Spotify introduced its “Tip Jar” feature, which allows users to donate directly to artists. But some artists were insulted that the streaming giant would burden fans with paying musicians, and considered the Tip Jar to be Spotify’s admission that it doesn’t pay artists enough.
The UMAW believes that paying artists one cent per stream is a good place for Spotify to start, though some calculations suggest that Spotify wouldn’t be able to sustain this payout rate. The Union also suggests that Spotify switch from a “pro-rata” payment model to a “user-centric” payment model. Under Spotify’s pro-rata payment model, all of the platform’s revenue gets pooled together and algorithmically distributed based on how many streams each track receives. If you subscribe to Spotify premium but never listen to Harry Styles, a portion of your $9.99 per month will still go to Styles’ rightsholders under the pro-rata model.
With a user-centric model, your payment would only go to the artists you listen to. If you stream “The Chain” on repeat and don’t listen to anything else, your payment would, hypothetically, go entirely to Fleetwood Mac’s rightsholders.
The UMAW argues that a user-centric payment model will advantage emerging artists that see fewer streams. A 2017 study by the Finnish Music Publishers Association suggests that 10% of Spotify’s revenue goes to the top 0.4% of artists under the pro-rata model. Under a user-centric model, the top 0.4% of artists would receive 5.6% of generated revenue.
However, a 2018 paper co-written by Will Page, Spotify’s director of economics, argues that the pro-rata model is more equitable because it generates a consistent payment for all tracks. The paper also alleges that the costs associated with adopting a user-centric model, namely creating an account for every user and designing an algorithm that accounts for individuals’ listening habits, would outweigh the benefits offered by the user-centric model. There are little data on the real-world implications of a user-centric model, though some streaming platforms are beginning to adopt it. The French streaming platform Deezer, for example, switched to a user-centric model in 2017.
A user-centric model might foster a sense of transparency among users because they’ll know exactly where their money is going — and transparency is something Spotify could benefit from. In the past, the streaming giant received criticism for striking deals with independent labels and artists. More recently, Spotify launched its Discovery Mode, which allows artists to opt in to a decreased “promotional royalty rate” in exchange for coveted spots on algorithmically generated playlists. The UMAW says Discovery Mode amounts to payola, an illegal form of bribing present in the music industry. In the early aughts, the majors had to pay multi-million dollar settlements as a result of illegal payola schemes.
The Union is demanding that Spotify reveal its existing payola, then cease the practice altogether. In addition, the UMAW wants Spotify to make public its contracts with labels, distributors and management companies, and that it disclose how much it makes from advertising, capital investment and data collection.
“How they calculate the amount they’re paying to people and who they’re paying is very opaque,” Clinkman said.
The campaign’s final demand is for Spotify to stop waging legal battles against artists. Spotify, Google, Amazon and Pandora made headlines when they opposed the Copyright Royalty Board’s 2018 decision to increase songwriters’ royalty rates by 44%. The streaming platforms took to court to appeal the ruling, and in response, more than 90 prominent songwriters wrote to Spotify CEO Daniel Ek imploring him to cancel the appeal.
“Spotify should be fighting for the artists who built it, instead of further undercutting our economic well-being,” the UMAW writes on its website.
Clinkman said the UMAW is seeing little cooperation from Spotify, and the streaming giant did not respond to a request for comment. But Spotify’s radio silence won’t stop the Union from pushing its demands. In a video clip posted to Instagram following Monday’s protest in Chicago, the UMAW members chant “Stop exploiting us with your algorithm.”
The location tag? “The pressure is on.”
Photo: Chicago Soundbox plays at UMAW’s Justice for Spotify demonstration Monday. Kira Leadholm/Redacted Magazine