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Spotify: Independent Music Friend or Foe?

Spotify LogoIn the last year, the Swedish music platform Spotify has gained considerable media attention in the United States with their free online streaming service. Although many are hailing it as a great way of discovering new artists and music, many are also criticizing the site claiming that it fails to properly compensate independent artists.

Spotify offers a free service that can be accessed online, while access from a mobile device requires a paid “premium” membership. Furthermore, the paid membership allows you to bypass the video and audio advertisements that are present with the free account.

In 2010, Napster founder Sean Parker invested $15 million in Spotify’s development, and has since been involved by sitting on their board. Spotify cracked the ten million user mark that same year, with a quarter of the accounts belonging to paying customers. After many delays and years of negotiation with major record companies, the site finally launched its US version in July 2011.

Spotify compensates artists via their record labels by paying for both downloaded content and streaming. In some countries, record companies have marked a significant increase in revenue since joining Spotify. Not everyone is happy however, American rock duo The Black Keys have gone as far as pulling their newest album El Camino off the site. So why are so many speaking out against Spotify?

The Issue Over Majors Having Stakes In The Independent Scene

major_musicI recently read an article on the issues independent’s artist are having with the major labels carrying equity stake in Spotify. Ever since the story broke, the discussion has shifted towards artist compensation problems. It seems all artist are not equal and few would argue that the earnings they do receive are hefty.

It went on to explain that the problem isn’t unique to Spotify and the majors are still are a huge and critical supplier of content and blah, blah, blah…

Let me say this loud and clear. ALL ARTISTS ARE NOT CREATED EQUAL AND THE MAJORS PLAYERS (LABELS) STILL HAVE THE UPPER HAND. Like it or not, majors labels still carry serious firepower when it comes to content. Their artist’s presence is still heavily favored on most of the popular networks. And as always, somewhere buried underneath them are the independents.

So what does mean for the to the independent artist, label, or anyone attempting to make money in this new environment of abundance and freemium models? Well, we can continue to discuss it, hate on the major labels while still playing by somebody else rules, or we can personally start changing the game.