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# Spotify’s Business Model Is Killing Music
February 17 2022
Written by Sonali Kolhatkar.
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PERFORMERS’ RIGHTS - Neil Young’s recent decision to pull his music from Spotify, the world’s largest streaming service, has sparked important questions about how streaming services operate.
Young demanded that the company choose between his music or Joe Rogan’s [misinformation-laden podcast](https://www.washingtonpost.com/politics/2022/02/02/actual-joe-rogan-coronavirus-misinformation/). Joni Mitchell, India Arie, and Crosby, Stills, and Nash followed suit and made the same demand.
Spotify chose Rogan over all of them.
Why? “What they’re doing always comes down to profits,” [says Zack Nestel-Patt](https://risingupwithsonali.com/neil-youngs-spotify-protest-highlights-ongoing-injustices/), an organizer with the [Union of Musicians and Allied Workers](https://www.unionofmusicians.org/) (UMAW). And Spotify sees Rogan as more profitable than even the entire catalogs of legendary musicians.
Spotify’s model isn’t the end of the world for Young, Arie, or other major artists who can rely on competitors like Apple Music. But the millions of “working-class musicians struggling at the bottom of the Spotify ecosystem,” as Nestel-Patt describes them, have no such leverage.
The company’s business model, to put it simply, is built on the severely underpaid labor of millions of creators.
Say an independent musician spends years putting their heart and soul into their craft. Finally, they score a hit that garners millions of plays on Spotify. You might imagine this translates into a generous payout.
But in reality, Spotify’s paychecks are peanuts. One analyst [estimated](https://www.hypebot.com/hypebot/2019/12/how-many-spotify-streams-are-necessary-to-live-above-the-poverty-line.html) that band members with families would need more than 24 million plays on Spotify per year to just barely clear the federal poverty line.
Even those minuscule royalties may need to be split with a record label, collaborators, songwriters, managers, and more. The money that most of Nestel-Patt’s musician friends earn from Spotify is “so negligible that they don’t even account for it.”
In short, Spotify sells products that creators get almost no money to produce. It’s akin to theft. “Imagine any other business working that way,” says Nestel-Patt.
There was a time when musicians made money from selling records, cassettes, and CDs — sales that were fueled by their songs being played on radio. That started changing in the late [1990s](https://www.nytimes.com/1998/07/16/arts/records-and-cd-s-how-quaint-digital-distribution-of-music-is-spreading.html) when digital platforms began offering music for little to nothing, paving the way for Spotify.
That digital transition forced musicians to rely on live performances and ticket sales to earn a living. But in 2020, when a global pandemic brought the world to a standstill, live performances abruptly stopped. “It was catastrophic for everyone I know,” recalls Nestel-Patt.
Now though, musicians are fighting back. From the ashes of musical careers rose the UMAW, where artists [proclaimed](https://www.unionofmusicians.org/) that “music workers are workers, and it is time we get organized and join the fight.”
The group, which also supports universal health care, a Green New Deal, and more, led [multi-city protests](https://pitchfork.com/news/musicians-organize-global-protests-at-spotify-offices/) against Spotify in 2021. And tens of thousands of musicians signed a petition as part of UMAW’s [\#JusticeAtSpotify](https://www.unionofmusicians.org/news/justiceatspotify-a-year-in-review) campaign.
Their [demands](https://www.unionofmusicians.org/justice-at-spotify-demands) were simple: Pay artists fairly, directly, and transparently, and treat them with dignity.
With Americans [spending increasingly more](https://www.rollingstone.com/pro/news/music-artists-make-12-percent-from-music-sales-706746/) money on music, there should be more than enough to go around. But even as industry revenues have risen to $43 billion a year, very little goes to musicians. Creators get only about 12 percent, with corporate middlemen sucking up a majority of the profits.
It’s not just musicians who lose out. Music itself suffers.
In a recent *Atlantic* headline, music historian Ted Gioia asked: “[Is Old Music Killing New Music?](https://www.theatlantic.com/ideas/archive/2022/01/old-music-killing-new-music/621339/)” Record labels, he observes, are “losing interest in new music.” While there’s plenty of incredible new musicians, he writes, the industry “has lost its ability to discover and nurture their talents.” And Spotify is a big reason why.
“This is as much a listener issue as it is a musicians’ issue,” argues Nestel-Patt. If Spotify relies on major pop acts or controversial podcasts for revenue, then “what happens to classical music? What happens to Tejano music? What happens to Appalachian bluegrass music?”
The ultimate losers here aren’t just those who make music. It’s all of us who love it.
*(Sonali Kolhatkar is the host of*[ *“Rising Up With Sonali,”*](https://www.risingupwithsonali.com/) *a television and radio show on Free Speech TV and Pacifica stations. This commentary was produced by the*[*Economy for All*](https://independentmediainstitute.org/economy-for-all/) *project at the Independent Media Institute and adapted by OtherWords.org.)*
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