Streaming empowered music’s long tail. Is Spotify about to cut it off? [Bill Werde]

“The promise of the streaming age was always the long tail,” writes Bill Werse “We all cheered that it would lower barriers to entry and empower artists.” But new royalty schemes promoted by UMG and soon to be adopted by BMG appear set to change that.

A version of this essay first appeared on LinkedIn and in Bill Werde’s free Full Rate No Cap email. Werde is a former Billboard Editorial Director and Director of The Bandier Program for Music and the Entertainment Industries of the Newhouse School of Public Communications at Syracuse University.

The always-great Rob Abelow dropped the best, most simple, and powerful breakdown of the news this week that Spotify was changing payouts to artists. Spotify says they will reduce fraud with these changes, and pay out more money into artist pockets–$1 billion in royalty payments over the next five years. And that seems like it may well be true. 

“Who gets to decide what we call music?”

But these policy changes also raise some really important ethical questions. One that immediately comes to mind is, who gets to decide what we call music? Consider the example below, taken from Abelow’s must-subscribe Where Music’s Going email. If I prefer listening to rain sounds, my dedicated listening no longer benefits the creator of rain sounds–now held to a higher standard than “music” in order to accomplish a payout–in the same way. We might agree that rain sounds aren’t music. But what about music made from nature sounds? Sonic collage? Artistically arranged white noise? Who is making these judgements?

“Any human who uploads music is entitled to the same per-stream payouts as anyone else…”

Also very notable, the minimum thresholds for how many streams an artist needs to generate a payout have been assumed, but I haven’t seem them confirmed. We feel strongly that any human who uploads music is entitled to the same per-stream payouts as anyone else. What motivation could there be to change this, other than to protect major labels and major publishers?

In the coming age, generative tools will absolutely mean that if we can think of a song, we can produce and distribute that song. The majors know an ocean of creation is coming and want to change the rules on who gets paid, so that as more people (and robots) start uploading music, the slice of pie reserved for major labels is protected. And to this we say: feh.

“It’s working too well, at least for the comfort of large scale music companies.”

The promise of the streaming age was always the long tail. We all cheered that it would lower barriers to entry and empower artists. It would let niches find their fans. It would create a new middle class of artists. And now, 20 years later? It’s working too well, at least for the comfort of large scale music companies. We are in the age of the niche, where superstars get smaller and hits get smaller and everyone gets their 15 minutes of fame/TikTok virality, but damn is it hard to stick around for 30. Major music companies are in the business of signing 20 artists to break one big. But when “big” is no longer nearly as big as it once was? The model is broken.

This is why the majors are intent on using the leverage they still have to force streaming services to conform to their will. The “head,” from above, is getting smaller, and the tail is about to be infinitely long. They know that the music business is at an inflection point, heading from one model (stars making money on Spotify) to whatever comes next: some beast rising from the primordial soup of AI, blockchain, and a canvas of F The Man, existential angst. You want to know how scared the majors are of what’s coming? Music Business Worldwide estimates the total current value of all tracks with fewer than 200 plays a year at around $40 million. That may sound like a nice number, but it’s NOTHING to the majors. It’s literally .1 percent of the global $30 billion+ industry. This isn’t about money today. It’s about the money they are protecting tomorrow. But maybe that tomorrow is supposed to look a lot different than the business today. And maybe the Spotifys of the world should consider how to empower and profit from hundreds of millions of creators instead of three corporations?

“let’s keep it a fair game”

Good on the majors for getting what they can. That’s what smart businesses do, but that doesn’t mean we can’t call bullshit. The next generation will be, already is, a generation of mass creators. To think it will be to create it. From our perspective, we absolutely want to endorse the strictest protections for creators, whoever they are and wherever they be. But let’s keep it a fair game. Cutting payments to tiny artists will only artificially depress the longest parts of the long tail — the parts where baby artists take their first baby steps. Only now they will be formally and financially told that those steps have no value. Everyone has to start somewhere. A ladder with no bottom rungs is useless.