Christian L. Castle, Attorneys -- Austin, Texas

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Artists Confront Spotify At Soho House Meeting (Hypebot Guest Post)

Spotify is conducting a artist relations charm offensive in New York, Nashville and Los Angeles. (This is a time to be thankful I live in a flyover state–they won’t be coming to Austin!)

The idea was there would be a meeting at the toney Soho House in New York, a membership only location that costs more to join than most artists make in a year or two. Of course, Spotify no doubt has a corporate membership for impressing…business people. Right. Business people.

What Spotify wasn’t expecting was a bunch of feisty artists who were not on the payroll who came expecting actual answers and not shillery.

Here are three of the many issues that Spotify were confronted with:

1. “The Per-Stream Royalty Will Never Increase“: There was a big dustup over royalty rates that boils down to why should artists take it in the shorts while Spotify executives get rich. The answer? If you just give it some time you’ll make more money. Not because the royalty rate will go up–no, no.

Spotify’s Mark Williamson told the small invited group that the way that artists will make more money from Spotify is to grow their audience. You know, make it up on volume. Why? Because Wiliamson confirmed what we all believe: the per stream royalty will never change.


2. Daniel Ek Just Helped Create Bit Torrent: It is not widely known, but Spotify’s CEO Daniel Ek was an early employee of Bit Torrent and helped to make Bit Torrent and its uTorrent software a raging success. Spotify’s representatives seemed prepared for this question and pointed out that uTorrent and Bit Torrent are not pirate sites they are data transfer platforms that happen to be used for piracy. A lot. Mr. Ek evidently left Bit Torrent’s employ early on to found Spotify, a legal service.

So why would they say that Ek left Bit Torrent to found a legal service if…Bit Torrent…was…legal….hmmm.

This is kind of like Alfred Nobel inventing dynamite and then funding the Nobel Peace Prize…Just wait, people will eventually be so taken with the pursuit of the Peace Prize, they stop using the dynamite we sell them.

3. Our Product is Spotify not Music: The Spotify representatives seemed to be unclear about what the are selling. They seemed to be thinking that they were selling Spotify. This is kind of like Interscope thinking they were selling Interscope and not the music of artists signed to Interscope.

4. Why Doesn’t Spotify Go After Brand Sponsored Piracy and Google’s Profit from Piracy? Oh, right. Google’s on their board. Sorry, sorry.

The general takeaway is that Spotify has handed out money and/or stock to a bunch of artists and their managers who are now being tasked with selling the company to quiet down the artist community. Probably because the company needs to quiet down investors.

What was plain was that Spotify was not prepared for the withering fire from the audience of actual artists who actually make a living from music. The best counter Spotify can come up with is that artists should just wait wait wait and in the long run streaming will save the music industry. You know…wait for Spotify’s next round if financing, wait for the initial public offering and follow on offering (like Pandora), and then wait for Daniel Ek to finish cashing out (like Tim Westergren)…then, then streaming will have saved the artists, songwriters and producers. And the Hale Bopp Comet will return.

Big trouble in Little China baby.


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