Spotify - Criticism

Criticism

Spotify has been accused of failing to compensate artists fairly. Helienne Lindvall of The Guardian reported that for "artists who 'signed up to a label' there's a tangible risk that revenue which comes from a possible sale of shares by the label would end up in the proverbial 'blackbox' (non-attributable revenue that remains with the label)." and that "indie labels... as opposed to the majors and Merlin members, receive no advance, receive no minimum per stream and only get a 50% share of ad revenue on a pro-rata basis."

In 2009 Swedish musician Magnus Uggla wanted to pull his music from the service, stating that after six months he'd only earned "what a mediocre busker could earn in a day". Norwegian newspaper Dagbladet reported in 2009, that record label Racing Junior had only earned NOK 19 ($3.00 USD) after their artists had been streamed over 55,100 times. According to an infographic by David McCandless, an artist on Spotify would need over four million streams per month to earn US$1,160 (equivalent to working full-time at a minimum wage job). Luke Lewis of NME points to problems with the Spotify business model, saying he was "convinced the 'free' aspect of Spotify is unsustainable" and that if "Spotify is to have a future, it needs to be a viable business".

In September 2011, US independent label Projekt Records entered a public disagreement with Spotify, stating "In the world I want to live in, I envision artists fairly compensated for their creations, because we (the audience) believe in the value of what artists create. The artist's passion, dedication and expression is respected and rewarded. Spotify is NOT a service that does this. Projekt will not be part of this unprincipled concept." In May 2012, British Theatre vocalist and Biffy Clyro touring guitarist Mike Vennart noted, "I’d sooner people stole my work than stream it from . They pay the artists virtually nothing. Literally pennies per month. Yet they make a killing. They’ve forced the sales way down in certain territories, which wouldn’t be so bad if the bands actually got paid."

In March 2012, Patrick Carney of the Black Keys said that "Spotify isn't fair to artists" and that for "a band that makes a living selling music, streaming services are not a 'feasible' option." He called Spotify board member Sean Parker an "asshole" in reply to his claim that Spotify would make more money for the music industry than iTunes. "That guy has $2 billion that he made from figuring out ways to steal royalties from artists, and that’s the bottom line. You can’t really trust anybody like that."

Spotify's artist-in-residence responded to the criticism by stating that 70% of Spotify's revenue is paid out in royalties, and that the per-stream royalty rate doubled between the service's inception and mid-2012. Charles Caldas, CEO of the Merlin Network for independent artists, argues that the problem isn't Spotify's failure to pay out significant royalties, but that it's paid to the record labels, who then pass too little of it on to their artists.

In 2013, Entertainment Weekly compared a number of music services and judged Spotify the second best, grading it "A-" and writing, "Its cumbersome desktop interface desperately needs a full redesign (recent tweaks are helping), but Spotify's best asset is its size: 20 million users ensure lots of eclectic playlists."