Spotify Royalty Outrage: What it ACTUALLY Tell Us About the Music Industry

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Just when you thought streaming royalties couldn't get any worse, Spotify pulls

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a hold my beer move and tells us that our music may no longer earn

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royalties. But as bad as it all sounds, I think this may be an opportunity

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to change the way we think about this business.

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You so in case you've somehow missed the

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hundreds of articles and videos talking about Spotify's royalty changes, here's a quick rundown

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of what's changing. There are three main changes to Spotify's

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royalties. One, they're instituting a penalty fee for

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tracks that are found to be using artificial streaming. Now, if you're unfamiliar,

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there are entire bot farms streaming third party playlists

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24 hours a day. I think at this point, any serious artist

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should know that paying for playlist placements, especially on a

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bot playlist, does far more harm than good. So I think it's safe

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to say that we shouldn't have any issues with this change. The second change is

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in regards to what Spotify calls functional genres, I. E.

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Noise recordings. People have long been taking advantage. I

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use air quotes on that one of the rise of things like ocean sounds and

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white noise being played while people sleep on loop. I don't personally have an

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issue with people putting up non musical content, but I do agree with the changes

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Spotify is making. What they're doing is increasing the minimum track length for

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these functional genres up from 30 seconds to 2 minutes. They also

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intend on working with licensers to reduce the value of a noise stream

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versus a music stream. Now, at first glance, you might feel that this

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is taking money out of the pockets of creators, and that is technically

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true. But if you're an actual musician creating art, you know that you spend

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days, if not weeks, on a track. These noise tracks can be made and

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uploaded in a matter of minutes. So I think we can all agree

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that the more money going into the pile of royalties being distributed to real

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artists, the better. And speaking of royalties distributed to artists,

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that brings us to the third and most important change track

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monetization eligibility. Starting this year, a

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track must have reached at least 1000 streams in the previous twelve months

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in order to generate recorded royalties. What happens to the money that would

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have been earned by those tracks that don't meet the threshold? Well, to cite the

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Spotify website quote, Spotify will not make additional money

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under this model. There is no change to the size of the music royalty pool

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being paid out to the rights holders from Spotify. We will simply use the tens

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of millions of dollars annually to increase the payments to all eligible

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tracks rather than spreading it out into three cent payments, end

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quote. The unfortunate part of that statement is that Spotify had to put into print

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how pitiful the payout to artists already is. Now, part of Spotify's

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reasoning behind this is that many distributors have payment thresholds that must be met

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before royalties are even paid to the actual rights holder. I believe CD

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baby, for example, has a threshold of $10, while ditto plus is a whopping

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150 british pounds. That should be criminal. They are literally

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keeping your money for months, if not years, maybe forever.

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So since tracks with less than a thousand streams are definitely not

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meeting a lot of these payment thresholds, Spotify has decided that money is better

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served going into the royalty pot for tracks that are, quote,

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monetized, which by their calculations would increase payouts by nearly $1

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billion over the next five years. I honestly don't know where I personally want to

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stand on this because if this change actually results in real independent

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artists making more money, I think that's great.

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But it is setting a very bad precedent for artists not

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being paid for their art. Even though we're talking about potentially single digit

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dollars or less, you're still making it okay

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to devalue someone's work, which I am not cool with.

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Obviously there's been an outcry of frustration with these changes, everything from people calling for

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Spotify boycotts to threatening to cancel their subscriptions. So that brings us to the part

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of this video that's going to be nothing like any other video you've seen on

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this topic because this is progressions, and deep down inside, this is secretly a

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self help podcast. Now, before you say, travis, what right do

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you have to talk about releasing music? You're just a mix engineer.

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And I have in fact been involved in releasing several

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projects to varying degrees of success. And let's not

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forget that I've been putting this podcast out into the world for more than

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three years now. Now, it might not be music, but trust me, I felt

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all the ups and downs and had all the thoughts of quitting that every musician,

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artist and producer watching this may have had at one point. When I see the

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reaction to Spotify's decision, there are two things that if we changed about

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ourselves, then I think the industry as a whole would be better off. First is

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this obsession over forward facing metrics. We're focusing

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on the wrong things. Spotify's choice to make the stream threshold

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1000, I think, has triggered a lot of people because the

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dreaded less than 1000 sign has already plagued so many

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of us. Releasing a song and not passing 1000 streams has for

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years been such a blow to an artist's confidence. Now, ultimately, I

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blame social media for this. The like has become a forward

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facing metric for how good something is. It's truly unfortunate that this is

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where the world is at, but this is where we are. I'm sure that it's

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not a coincidence that Spotify opted to have a similar public

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metric by displaying the stream count. Think about what that's done for their marketing and

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branding. Artists sharing their year end streams, announcing that they hit their first

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million. Do you see anybody posting about getting a million streams on Apple? No. The

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world has us so focused on these public metrics that we forget that

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this is a long journey. It takes time to build a fan base. A career

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is the compounding effect of everything we do. It's not just one song. And

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that goes for whether you're an artist, releasing music or behind the scenes in the

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production process. I feel this all the time. I want a project I work on

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to blow up as much as the artist does. So we should all be taking

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pride in the work we're doing, focusing on the enjoyment we get from making the

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things we're making and not on the number of streams or likes it has. Let

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me ask you this. Does 1001 make you feel better than less than

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1000? Let's not forget that less than 1000 could be

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999. Is it different? No, it's not. Your stream

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count is not a reflection of the quality of your music. It's a reflection of

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how many people have heard your music. You can't get caught up on the results.

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You've got to focus on the process. I talk about this on the podcast all

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the time. That's what brought you into music in the first place, right? The process

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of making music. Now that we've shifted our focus a bit away from these metrics

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that we all seem to want to live or die by, let's talk about how

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we identify what's the narrative that we've painted for ourselves. Right now

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it feels like we've painted the story of the starving artist that is being kept

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down by the big corporate DSP devils and pushed to the wayside by the major

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label artists. And look, that's not an entirely

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exaggerated description of the challenges of breaking through in the music industry.

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But that doesn't mean we should believe that's who we are. Our experiences all

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shape our story. If we let the setbacks and mistakes define who we are,

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then we'll become a self fulfilling prophecy. Example. If you identify

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as someone who fails to market their music effectively, then you won't take any

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steps to learn how to market your next single any better than your last. On

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the other hand, if you identify as a person that grows from hardship and

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is excited to learn how to beat a new challenge, you will eventually

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crack that code. And look, this stuff is hard. I promise you that I'll be

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tracking the views and downloads on this episode nonstop for the next week,

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despite the fact that I just told you to ignore all that. And while I'm

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doing that, I'll be trying my best to continue to identify as someone who is

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growing a podcast and is excited for the challenge to win people over one

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by one. But I will 100% have

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moments of absolute frustration. And by the way, this is a great moment

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to hit the subscribe button. So think of the artists that inspire you. Now we'll

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never know what they believed about themselves when they were starting out, but I think

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it's pretty safe to assume that none of them believed that they would never cross

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a thousand streams. There was an artist in the UK who was playing hundreds of

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gigs a year, self releasing his own albums, collaborating with as many musicians

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as he could, and building an audience on YouTube before he finally broke through.

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When he did, he hit number one on iTunes as an unsigned artist, and

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would eventually become the first artist to have a song hit 1 billion streams on

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Spotify. We're obviously talking about Ed Sheeran. Despite the many setbacks I'm

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sure he encountered, I would imagine that the story he believed about himself

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was always that he would be a successful musician and

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songwriter. You can't put that amount of work in unless you truly believe

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that that is your story. So let's return to this Spotify royalty nonsense. What are

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you going to do differently with your music career because of it? Nothing. Fuck

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it. Because it doesn't matter. Make music because you love making music

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and you'll build your career in music regardless of how many pennies Spotify is

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or isn't giving you. It doesn't matter what metric the world thinks should define

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you. You define yourself and you decide what success is to.