Is Spotify unfair to musicians?

Spotify may offer a spectacular selection of tunes, but producer/engineer Allen Farmelo thinks Spotify's music for almost nothing model devalues music.

Steve Guttenberg
Ex-movie theater projectionist Steve Guttenberg has also worked as a high-end audio salesman, and as a record producer. Steve currently reviews audio products for CNET and works as a freelance writer for Stereophile.
Steve Guttenberg
4 min read

Is $10, or the price of a few Starbucks lattes, really too much to pay for an album? Is $10 really too much to support musicians well enough they'll want to record more music? I still play LPs I bought when I was a teenager, and I can't think of anything else I still use from that part of my life. Those records are, if anything, more valuable to me now then they were then. I'm old enough to remember when record companies were freaking out about kids making cassette copies of albums, but producer and engineer Allen Farmelo doesn't think home taping really took all that much away from LP and CD sales, because 30 years ago there were masses of music buyers who wanted music with the best possible sound quality, and were willing to pay for it.

Allen Farmelo in the studio Steve Guttenberg/CNET

Napster and other file-sharing sites started chipping away at that model in the mid-1990s, and created a generation of "consumers" who grew up with free music. Farmelo thinks the iTunes store is probably the best update of the old record store model, precisely because the record companies and musicians get a healthy percentage of the profit from the sale. Spotify's approach is the exact opposite. Here's a quote from its Web site, "Think of Spotify as your new music collection. Your library. Only this time your collection is vast: millions of tracks and counting." Spotify users never need to buy physical albums or legal downloads of their favorite music, and that's the problem. Spotify doesn't link to any sites where you can buy music; it's a closed system.

Granted, Spotify pays artists and record companies fees, but the exact rates are impossible to pin down. The fees appear to be minuscule; it's rumored to be a tiny fraction of a penny per play.

Some say Spotify can be a powerful promotional tool for unsigned bands, but Farmelo claims that since Spotify doesn't release tracking numbers, bands can't show them to a club owner or record label, like they can with YouTube plays. If your band has 40,000 YouTube views, that means something; a Spotify royalty check for $13.16 won't have the same impact. Putting your band's music on Spotify doesn't automatically translate into exposure; you're just one of millions of bands, and Farmelo claims that no band has ever busted through from Spotify plays. Music lovers don't need Spotify to check out a band's music before they buy it, pretty much everything can be sampled on iTunes or Amazon. Spotify is a closed system that discourages music purchases.

Farmelo addresses the old "record sales were never a huge part of artists' income" argument this way: "Aside from being a dubious claim at best, any income is income and can make a difference. Each artist has some ratio of income from live show tickets, record sales, merch, and licensing. Some rely heavily on record sales, some don't. But regardless, this doesn't make the deals the labels and Spotify are cutting somehow fair to artists."

Farmelo thinks that if you value music you should buy it. It's as simple as that, and he's concerned that Spotify and other streaming services are cheating musicians out of income. I would add that unless things change, the fans who rarely purchase recorded music will be the biggest losers in the end. Sure, paying for recorded music is a purely voluntary act -- you can hear almost everything for free -- but most bands aren't producing anywhere near as much music as bands did through most of the 1990s. Before Napster most bands released an album a year; some learned how to make better records from making them so often, but now the frequency is down to one album every three or more years. And when the band breaks up after a 10-year run it'll have three or four titles in its catalog. Farmelo makes records for a living and he's acutely aware that budgets for studio time are still shrinking, even for established bands like Grizzly Bear. As the return on investment dwindles, budgets and frequency of releases has to go down. Farmelo knows from firsthand experience it takes time and money to make great records. The fix for music fans is simple -- buy more music -- or watch it fade away.

Older generations of music fans, like me, can luxuriate in our favorite bands' gigantic back catalogs. Amy Winehouse released just two albums between 2003 and 2011, and that's a shame. Radiohead tried a pay-what-you-want approach with "In Rainbows" in 2007, but apparently that didn't work so well; Radiohead didn't use the pay-what-you-want scheme again when it released "King of Limbs" in 2011. We'll probably have to wait till 2014 for the next album from the band.

Farmelo questions why major record and larger indie labels would allow their most valuable assets to be used on a service that doesn't pay standard rates. His assertion: Spotify offers labels equity in the company in exchange for access. Farmelo cites articles that follow that line of reasoning, but he has no actual proof that the labels are in cahoots with Spotify, though it would explain a lot if it's true. The labels have to be losing sales to Spotify users who see no need to drop $10 on a single album, when they can choose from millions of tracks for $10 a month. They can even download tunes from Spotify, so why buy 'em? What are the labels getting out of Spotify? Will the artists (remember them?) get their fair share?

I first learned about Farmelo's Spotify views from his thought provoking article, "On Spotify: (And why I'm not a conspiracy theorist after all)," on the Tape Op magazine Web site. Farmelo is speaking out to rally support for artists and labels who choose not to be on Spotify.