When Spotify was invented in 2006, it seemed to me the most radical innovation. I would stare wistfully at the message informing me that Spotify wasn’t available in my jurisdiction yet, and tried all sorts of VPN tricks to access the platform. Access to all the songs ever made? Available all around the world? Legal and cheap? Too good to be true, surely.

The idea of frictionless music consumption was central to Spotify’s early fascination—the feeling that music is conjured from thin air and goes straight to a listener’s ears through latency-free streaming. Other Big Tech firms soon followed suit and entered this space. As in all things platform however, this idea of frictionless was always an illusion. We, as listeners, have unquestioningly accepted the model of being able to stream nearly the entire catalogue of recorded music for the price of $10 a month. The narrative of cheap and universal access to music was so seductive that we did not stop to question how it was being made possible in the first place.

Taylor’s Version: How Artists are Reclaiming Their Rights

The fact that artists and corporations have competing claims to music and its rewards is not new. Pink Floyd’s classic 1975 album ‘Wish You Were’ commented on how the greed of record labels can betray the creative process and ruin brilliant artists. Taylor Swift, driven by rage against not owning the rights to her own music (or the master recordings), is embarking on re-recording her entire back catalogue, drolly dubbed “Taylor’s Versions.” Prince even changed his name to The Artist Formerly Known as Prince in a bid to free himself from the trappings of his label. The conflicts of commercial interests and artistic autonomy, therefore, predate the streaming era. In this article, I am interested in exploring how the logic of streaming has distorted this equation in different ways, and how the collusion between major labels and streaming giants has shortchanged artists and listeners alike.

By the time most major labels had signed on to Spotify, independent labels were left with little alternative if they wanted their artists to be heard by the world, despite the questionable business model vis-à-vis artists’ labor.

Here, it is worth noting that the music business has always been oligopolistic—70% of total recorded music is controlled by three companies (Warner Music Group, Sony Music Entertainment, and Universal Music Group). Their participation was thus essential to get Spotify off the ground, and they willingly obliged. They leveraged their position of power in negotiating initial licensing rights with Spotify, and it soon became standard for streaming contracts to give record companies equity, advances, free advertising and promotion, and influence over the future of the platform. By the time most major labels had signed on to Spotify, independent labels were left with little alternative if they wanted their artists to be heard by the world, despite the questionable business model vis-à-vis artists’ labor. In fact, streaming royalties emerged as a lucrative asset class, with artists auctioning their rights to the highest bidder in a race to the bottom.

The economic logic was thus simple: maximize wealth for the platform and labels, and minimize what artists are paid. Roughly speaking, artists earn a laughable $0.0035 per stream.

The contents of these licensing agreements were fiercely guarded. Complex non-disclosure agreements (NDA) prevented artists from knowing the terms on which their music was being made available to listeners. And for good reason. The agreement that Sony signed with Spotify was leaked, revealing just how little of the rewards of streaming were going to artists. Another leak exposed that Lady Gaga would earn nothing from the deal signed between her label and Spotify. The economic logic was thus simple: maximize wealth for the platform and labels, and minimize what artists are paid. Roughly speaking, artists earn a laughable $0.0035 per stream. In 2023, Spotify dealt a death blow to small and independent artists by announcing that tracks with less than 1000 streams would not receive royalties, in effect saying that the labor of those artists was not worth a dime. For artists, the complicated and unknowable nature of the payment regime can be frustrating, especially when its inequalities can be so readily seen and understood. Mercury Prize winner Nadine Shah had to move back in with her parents during Covid because she could not even pay her rent with the money she earned from streaming, which is outrageous when one considers streaming today accounts for 84% of revenue from recorded music. Where is it all going?

The complexity and opacity are no doubt deliberate, intended to obfuscate that the financial devaluation of artists’ labor by both platforms and record companies is core to the streaming business model. The explosion of algorithmically-generated playlists was a further setback. Spotify’s Discover Weekly feature, a self-described “weekly mixtape of fresh music,” racked up 1.7 billion streams within six months of its release, meaning Spotify’s personalization algorithm now had control over what finds its way to a listener. Through a “payola” system, artists were encouraged to take a 30% cut on royalty rates in return for ephemeral visibility in Spotify’s prime offering. Ironically, in radio, payola, or paying for airtime without disclosure, is an illegal practice. In short, Spotify is obsessed with promoting content that is cheaper for it to acquire.

In addition to the financial losses, artists are also forced to confront an existential crisis of the machine’s making: should they make music for the algorithm or for themselves?

In addition to the financial losses, artists are also forced to confront an existential crisis of the machine’s making: should they make music for the algorithm or for themselves? Indulging the algorithm would surely improve their visibility and performance on the platform, bringing in more streams and promotion. But, what if they wanted to say something else with their art? This is what is referred to as the “flattening” nature of the platform, which is a vicious cycle.

For users, algorithms play to their comfort zone, recommending content that they are likely to stick with and not click away from or ignore (in order to maximize engagement). Meanwhile, artists are pressured to cater to these tastes, reducing both listeners and artists to passive compliance with the algorithm’s logic. The algorithm also rewards instant gratification, pressuring artists into getting to the hook immediately. As a result, these playlists were crammed with compliant sounds, nothing that would disrupt or subvert a listener’s expectations—what one would pejoratively call “elevator music.” More insidiously, the creative process is itself belittled by the expectation of constant content generation, which is anathema to artists’ autonomy and deliberate and considered creation. In the Spotify CEO’s own words, “[…] it’s about creating a continuous engagement with their fans. It is about putting the work in […].” For its approach towards music, Spotify was condemned by avant-garde artist Björk as the “worst thing that has happened to musicians.” The woeful insufficiency of AI and algorithms is made clear—they can identify and replicate listening patterns but can encourage neither listening nor artistic curiosity.

Shifting Power Away From Musicians And Towards Platforms

As writer Liz Pelley says in her excellent new book, ‘Mood Machine,’ “Shaping user behaviors around its own discovery tools put Spotify in an outsized position of power; it shifted value away from the musicians and labels that supplied the material it relied on, and toward its own brand. This was, in part, the goal: if Spotify could shape user behavior around coming to the platform for certain playlists, certain moods, certain vibes, then it would maintain control over the user experience.” Perhaps the saddest revelation in the book is this: In order to meet the demands of this brand, a labor market emerged for struggling artists (“ghost artists”) who would make algorithmically obedient music and sign their rights away to Spotify for almost nothing thus allowing the platform to readily populate its playlists with cheap tracks. These artists had no ownership rights to the master recordings, and often saw none of the profits of the massive popularity of their music; some of these ghost songs could generate millions of streams.

The streaming economy is booming, but to nobody’s benefit. Listeners are reduced to passive and alienated consumers of a predetermined experience, with little agency or curiosity.

All of this does a disservice to the integrity of music as an art form. The streaming economy is booming, but to nobody’s benefit. Listeners are reduced to passive and alienated consumers of a predetermined experience, with little agency or curiosity. Artists are swindled at every turn and have to forego artistic freedom and integrity—the censorship of the state replaced by the tyranny of the algorithm. Music itself loses its culture, flattened under the pressures of the machine. Abundance was the promise, but what we’ve got is scraps. So, where do we go from here?

No number of NDAs or backdoor negotiations have been able to mask the inequities in the streaming economy, and alternative approaches are being deliberated and considered as I write. In France, for example, an agreement negotiated by musicians, unions, and other groups guaranteed minimum royalties for artists, secured their share of any advance payments, and introduced a tiered system for streaming revenues. Last year, a group of representatives from the US Congress introduced the Living Wages for Musicians Act in Congress, which proposes a new royalty stream paid out directly from the platform to artists, routed through a non-profit administrator. Another approach suggested is the “user-centric’ model, in which the revenues generated by a user would go to the artists they listen to. Alternative streaming models and platforms are also emerging. Music League, for instance, encourages social and community interaction through music to undo the alienation and isolation of listening to personalized music on streaming platforms.

The good news is that a rebellion is forming. Protesting the use of their music to train AI models, over 1000 artists released a silent album—12 tracks of nothingness—as if to remind us of music’s provenance. Music has this uncanny ability to saturate everyday moments with meaning. It is time we meaningfully compensated artists, the extraordinary people who are custodians of this timeless and precious art form. In doing so, we can reclaim the listening experience as receivers of music’s generous gifts, rather than consumers in the music business.