Spotify’s Streaming Model Is Based on Exploitation

Earlier this year, Spotify announced it would give artists and record labels a boost in promotion if they accepted a lower royalty rate — rates that are already abysmally low. Between fights over compensating artists and the unionization of podcast company workers, it’s clear that even the world of digital streaming has class conflict at its heart.

Music app Spotify announced that it's changing how artists can promote themselves on the platform. (Unsplash)

Within days of launching their “Justice at Spotify” campaign in late October, the Union of Musicians and Allied Workers was reminded why they launched the campaign in the first place. Spotify announced in early November that it was changing how artists can promote themselves on the platform.

Billed as “a new feature,” Spotify will now allow artists and record labels to, in essence, pay for increased visibility. In exchange for a lower royalty rate, selected songs and albums will be boosted in listeners’ recommendations. The statement from Spotify reads:

In this new experiment, artists and labels can identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions.… This allows our algorithms to account for what’s important to the artist.

As with all public relations speak, euphemisms are heavy here. “What’s important to the artist” is better understood as “what the artist can afford.”

Commerce Over Music

Those familiar with the term “payola” will surely recognize it here. The practice of playing certain songs more than others in exchange for a kickback is one that ruined the career of pioneering rock and roll DJ Alan Freed in 1959.

Since then, it’s been rightly viewed as a practice favoring not the best or most original artists, but artists and record companies with the deepest pockets. Even the name of the practice — tacking the suffix “ola” to the end of the word — recalls products that, whatever their merits, were used to remove control of music out of artists’ hands: Victrola, Pianola, Motorola, Payola.

Rock and roll DJ Alan Freed.

This isn’t the first time Spotify has been accused of pay-to-play. This past August, the Daily Dot released an in-depth report on a booming black market of PR companies charging labels and artists exorbitant rates to get their songs onto the streaming service’s influential in-house playlists.

Though this is technically in violation of their terms of service, Spotify has shown no indication that those terms are enforced. This is on top of the fact that they already allow for ads, themselves a prohibitive expense for those outside the major label system.

If Spotify is this brazen in favoring commerce over music, it is only because the company has been bilking artists with impunity for some time. Every time an artist’s song is streamed on the platform, they are paid, on average, about $0.004, or just under half a cent. If they want to see a literal single dollar, then the song needs about 250 plays. Which, naturally, is difficult to achieve without considerable promotion.

What’s more, even that less-than-half a cent is an average, meaning that payout can often be less. Spotify distributes payment pro rata, which basically puts all money generated from streams into a single pool, then divides it up based on the number of streams each artist gets, further cutting into smaller artists’ share. Spotify is also constantly taking artists to court, seeking ways to pay even less in royalties than they already do.


Hence the Union of Musicians and Allied Workers and its Justice at Spotify campaign. Among its demands are an increase to at least one cent per play, and an end to the streamer’s pay-to-play arrangements. They are also demanding listed credits for all those involved in recording, and a more transparent, equitable payment model.

When Justice at Spotify launched in late October, it had the public support of about four thousand artists. Now the number is over twenty-five thousand. For the most part these are not big names with big labels backing them up. Many have spent their careers hustling on independent labels or self-releasing.

Not surprisingly, the list includes many artists known for their outspoken politics: Ted Leo, Moor Mother, Televangel, Fugazi’s Guy Picciotto, Downtown Boys, and Sheer Mag. There’s also Thurston Moore, deerhoof, Zola Jesus, and about twenty-five thousand others.

“Many claim that such wages are not compatible with Spotify’s current economic system,” UMAW’s statement reads. “Our demand is that this model be adjusted so that artists can be paid fairly. If Spotify’s model can’t pay artists fairly, it shouldn’t exist.”

Harsh? Yes, but how else should such an egregious offender be treated? To some, the idea of Spotify imploding is an unpleasant one, raising the prospect of being unable to listen to whatever music we like while on the go or at home. But this in turn raises a host of questions about the role music plays in our lives — and whether streamers like Spotify are as much of an unqualified good as they might have been viewed a decade ago.

That UMAW sees the need to demand Spotify list all workers involved in a song’s production speaks to the shape of the streaming service’s impact. Listeners can access nearly every song ever recorded, and can do so virtually wherever they might be in the world, yet they cannot access the full list of those who made that sound possible.

This does far more to isolate music than democratize it. A song unrecognized as labor is less able to provide for meaningful connection and understanding. As a commodity, it becomes more forgettable, more disposable, more an accompaniment to alienation.

Even as a disposable commodity, it still dominates our imaginations. Right now Spotify’s algorithms are delivering to us our “Best of 2020” playlists, intended to reveal our tastes to ourselves after an entire year of “you might also like” suggestions. And if the new promotional models go through, they will be based less and less on our actual tastes, more and more on who paid, further hemming in our ability to explore and discover.

It’s not for nothing that the term “spotification” has entered into the cultural studies lexicon in recent years, an encapsulation of the “give me convenience or give me death” mindset that just-in-time production and on-demand distribution enmesh into our daily lives.

This is not to say that the general streaming rubric needs to be abandoned. Other services, Tidal for one, have managed to compensate artists more equitably. Bandcamp’s model doesn’t just provide for direct purchases of downloads, vinyl records, and other merch, but for a direct line of communication between artist and listener.

Tidal and Bandcamp are still capitalist enterprises, so they are bound at some point or another to feel an immense pressure to enclose whatever space they provide for artists. For the time being though, that space is there, and it’s being smothered by models like Spotify’s.

Unionizing the Music Industry

UMAW is not the only voice of organized labor facing down Spotify. As the company expands its influence over what we hear, it has become an aggressive player in podcasting. Not only has it begun to produce its own podcasts, it has been buying up other podcast production companies.

The most recent acquisition is the Parcast network, whose employees have announced their intention to unionize through the Writers Guild of America — West. This makes them the third podcasting network, after The Ringer and Gimlet Media, to see its workforce unionize since coming into Spotify’s orbit.

Spotify app sign up window.

This emergence of class conflict within the digital streaming world is significant. Twenty years ago, the idea that the internet could be used to find and listen to music was a revelatory one. Some commentators went so far as to hear in it the end of the music industry as we knew it, and the opportunity to replace it with something beyond the reach of commerce and record executives.

They were only half right, failing to predict that other well-monied “disrupters” would be able to enclose and monetize this new format. That workers and artists are demanding their due isn’t just proof that the online world was never above capitalism; it forces us to question why, and what it will take to make art a public right.

Unionizing podcast companies, most of which have regular staff and schedules, is one thing. Organizing artists is different — and arguably far more difficult. Spotify clearly sees its relationship to artists as more akin to independent contractors rather than employer-employee.

The ongoing struggle around gig workers shows how this definition can be made malleable, though. At the time of writing, Spotify has yet to respond to UMAW’s demands. UMAW, for its part, is promising to “escalate” its campaign if demands aren’t met.

What this escalation looks like has not been made clear. It is, however, something we should relish, as we should any opportunity to reimagine our relationship to art, labor, and each other.