Over the next five years, the Copyright Royalty Board is looking to raise the rates that music services pay to artists by 44%. While Spotify, Amazon, Google, and more are appealing the decision, Apple is not. Here’s why Apple will come out on top no matter the outcome.
As reported by Variety, most of the major music streaming services except for Apple have objected to the proposed rate increases over the coming years. Spotify is seeing backlash from the artist community, with some using social media to share they are cancelling their accounts using #cancelspotify.
As a sign of how badly the PR war is going, many songwriters are canceling Spotify subscriptions and doing so publicly on social media, where they make sure to note their subscription fees will now be going to Apple Music.
Officially canceled my @Spotify subscription because Of their abhorrent treatment of songwriters and added @AppleMusic #cancelspotify pic.twitter.com/hdHIAEHgBr — Manny Medina (@MannyDMedina) March 9, 2019
Along with the recent acquisitions of several podcast companies, some in the industry feel Spotify is shifting its focus away from music.
Dawn Ostroff, Spotify’s chief content officer, said as much at South by Southwest last month when she declared that the company’s mandate is to become “the world’s No. 1 audio platform.” It was hard not to notice the absence of the word “music.”
As for Apple, no matter the outcome of the appeal, it wins. If the rate hikes do go through (which is expected), Apple Music benefits with increased songwriter loyalty as the company has taken a pro-artist stance. If Spotify, Google, and Amazon do successfully defeat or change the rate prices, Apple will also see the lower costs.
Just last week, we heard from the WSJ that Apple Music surpassed Spotify with paid subscriptions in the US. This latest development could help Apple increase its lead in the US and close the gap with Spotify internationally.
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hairy_butt_creek on April 9th, 2019 at 19:49 UTC »
What a stupid article. Has anyone even bothered to research the "trending" hash tag on Twitter this article references? There's like 50 posts in the past month. Not exactly a big protest.
I'm not in the music industry but I have friends who are and fact of the matter is unless you're big time the differences between Spotify and Apple music is pretty low when it comes to the thing that matters which is the check you get. While Spotify pays less they actually like Spotify because Spotify is really good at marketing them a lot better than anyone else is. On other services you rely on listeners to look for you in hit play, but on Spotify they do more to bring the artist to listeners.
A band at SXSW mentioned how people keep finding out about them via Spotify's discovery features where they end up in a person's playlist without ever doing anything. They also mentioned that when one of their songs got picked up in a TV show they got a lot of streams and exposure due to the social aspect as people who liked the TV show were quick to search Spotify for a playlist. Since the social aspect of Spotify is so big, there were several public playlists with that band's music on it. They saw bumps on Spotify they didn't see on other service platforms since they're not as social there weren't discoverable playlists with this band on it.
Fact of the matter is there's only so much money in the music economy. In the 1980s and 1990s artists got paid fat bank because radios paid them a lot of money to play their music. Anyone who listens to the radio knows though they play the same 20 artists over and over. If you made it you made it big, but the amount of artists that got anything was small. Today fewer artists get paid those mega amounts however artists have a much easier time reaching audiences, getting something even if it's not a lot. Personally as a consumer I like the way it is today so I don't have to listen to Imagine Dragons 30 times a day.
Since there's only so much money in the music economy we have to decide, fewer artists getting paid bigger bucks or more artists but smaller payouts? Either way we're all paying the same $9.99 a month and going to the same amount of shows and festivals so the only changing variable is how many artists to distribute that money to. There's no right or wrong answer. There is one certain thing though and it's the fact that Apple is using it's other sources of income to keep their music service afloat. Anyone who pays any bit of attention knows sooner or later the bean counters will not like that and something will give to make Wall Street happy. It'll either be higher prices or lower pay outs.
Banelingz on April 9th, 2019 at 18:30 UTC »
Seems like people are celebrating here. Just so you guys know, this is bad for the industry. Having competition is good. When Spotify folds, Apple will both raise the price of sub as well as lower royalty. It’s just what happens when one company dominates the market.
blackiechan99 on April 9th, 2019 at 16:57 UTC »
I don't think I'll ever be leaving Spotify Premium unless there's some major changes w/ AM