Daniel Ek, founder, and CEO of Spotify has always put forward that Spotify values growth over profits. This yarn reminds me of the exploits of Gregor MacGregor, a nineteenth-century Scottish con man who made a fortune by getting people to invest in his fictional country of Pioyala. MacGregor duped the unwitting investors to hand over money for their stake in a country with water so pure it could “quench any thirst.” Their payment was not for land, but the development of the infrastructure of the country. Yet upon arriving in this fictional country, investors found nothing but forest. Most died. In his ‘growth before profits’ stance, Ek is essentially asking artists to wait for a time when Spotify is in a position to pay them sufficiently. All this while musicians themselves have become Spotify’s most valuable marketers, sharing playlist placements which often accrue millions of streams, and often exclude lesser-known artists. Some would moan that ‘lesser known’ artists are so because they’re just not good enough. That’s not the case.
“Streaming is broken for 99% of artists”, reads the mission statement of Irish tech start-up Minm, a transnational team from Dublin and Belfast who have been slowly launching their new music streaming service. In the current market-centric payment system used by streaming giants, subscription revenue is pooled together for the market of each country, with the total number of streams in a market divided to calculate a price per stream. This means that artists with high numbers of streams devalue the overall revenue for other artists in their markets. Fans of ‘lesser known’ bands are, theoretically, giving their monthly subscription fee to artists they have never listened to. Minm employs a user-centric payment system, where a user’s subscription is only given to the artists who they’ve listened to. This model benefits independent artists with a lower number of monthly streams but a dedicated following, as they no longer have to compete against major labels for their slice of the revenue pie. And while major services take a thirty percent cut, minm only asks for ten. When I reached out to them for a comment on this article they wrote; “We’re pretty transparent about how we take ten percent off of each subscription. I don’t think any artist is naïve to the fact that Minm costs money to run and we need to eat.”
Daniel Cosgrove and Luke Lau are the two coders behind the Minm site, for which an app is still in development. I asked them about their motivations for starting the project: “We graduated from college into the pandemic, and as fans of independent music (but outsiders to the industry), we were surprised to have it revealed just how little streaming paid the smaller or more niche artists. We aren’t music industry gurus, but we both know how to code.”
In its infancy (the site was launched earlier this year), Minm is already gaining traction with independent Irish artists. Writing for the Irish music blog nialler9, Belfast musician Joel Harkin commented; “They [Minm] are very new and the service is still being put together but already there is a real community of artists and listeners who have released their music and have subscribed themselves to it.”
When asked about how their fledgling service may provide some fair remuneration to the artists, they replied: “It’s not that we expected them [the artists] to be making millions of course, but we realized a lot of people weren’t even breaking even from their work. Like I mentioned, we aren’t music industry gurus, but we both know how to code. So we thought, why not just try to make something that works for smaller artists?”
The pair’s bashless display of confidence and enthusiasm, however, doesn’t translate into a need for unnecessary capitalistic ambitions: “One of the main things that separate Minm from the other platforms is that we are so small. We’ll expand the team at some point, sure, but we’re not aiming to become a huge faceless enterprise. It’s very grassroots at the moment and it would be nice to keep it that way for as long as possible. So I think the goal is not to grow “the company”, but rather to grow the community.”
They’re right to do it this way; surely Apple Music executives don’t stay in hotels at their own expense.
Spotify is a brand that relies on its name. Five years ago, a premium subscription to Spotify was seen as a mark of status, a proclamation that you could indeed afford the monthly subscription. Now, it’s a mark of being ignorant to the exploitation that’s going on. Yet despite this cultural shift and a recent loss of market value, Spotify isn’t likely to suffer too many consequences any time soon. They are still the gold standard, owing entirely to Ek’s drive to make the complicated simple, and his vision to wrap music up into a sleek box for the consumer, something Minm will also need to work towards if they’re going to make a real difference for artists.
Sources cited
https://www.musicbusinessworldwide.com/loss-making-spotify-will-continue-to-focus-on-growth-over-profit-for-next-few-years/
https://www.bbc.com/future/article/20160127-the-conman-who-pulled-off-historys-most-audacious-scam
https://qz.com/2120033/if-spotifys-artist-exodus-continues-apple-and-amazon-benefit/
https://nialler9.com/thinking-of-ditching-spotify-musician-joel-harkin-explores-alternative-music-platforms-so-you-dont-have-to/
https://artists.apple.com/support/1124-apple-music-insights-royalty-rate
https://www.insider.com/spotify-to-invest-100-million-for-content-from-marginalized-groups-2022-2
https://www.businessinsider.com/spotify-joe-rogan-investor-ny-pension-fund-content-policing-report-2022-2?r=US&IR=T
https://techcrunch.com/2022/01/20/spotify-subscription-numbers-up-youtube-music-tidal/