Spotify changing their payout systems is kind of interesting. It’s reported in both Music Business Worldwide and Billboard. Of course, the three majors put pressure on the payment should go to the catalog that they own. Also, a good way to convince artist to sign with them if you are getting better payment. At the same time Spotify is trying to get to the cheaters that take off a chunk of the whole cake that should be divided. Of course, the main part of this is songs uploaded with white noise, bird sounds and other things like 31 second songs that is nonsense.
The question is though why now? So, UMG who is the biggest major struck deals with Tidal and Soundcloud around testing new payout models. I guess to put pressure on Spotify. On the other hand, Spotify for the second time showed profit in their quarter report. That prompted Daniel Ek to sell even more shares. Looks more and more that Spotify is in discussions to sell, but to whom?
Some people around the net promoted that it will be harder for small artist to get paid in the new system. Well, if you are that small it’s too small anyway. What is more worrying is that there might be a threshold where the bigger artist will have a boost and getting a bigger part of the money just because they are big. Of course, this will benefit the to three majors since they have large catalogues with big artists.
In all of this, I’m a bit complex. In my world many are leaving Spotify for YouTube. Right now, they are aggressive in their marketing and their algorithm is better than Spotify. Most my friends left Spotify to just have a YouTube account. Maybe it’s just a filter bubble since Spotify announced a large number of new subscribers. Or is it just to put up a screen when they negotiate?
For me it just shows that the change is happening now, and we have just started to explore the next base where we consume music.