Dylan Smith: Electronic Artist Skee Mask Removes Music From Spotify, Citing Lack of Respect for Creators and Investments In Defense Technology

Electronic music producer and artist Skee Mask (full name Bryan Müller) has officially removed “all” his tracks from Spotify over the platform’s perceived lack of respect for creators, in addition to CEO Daniel Ek’s multimillion-dollar investment in AI-powered defense company Helsing. he Germany-based “Rev8617” artist announced his voluntary Spotify exit on social media, and the much-publicized move follows Skee Mask’s May of 2021 decision to release Pool physically and digitally sans a streaming option.

“it’s done, all of my sh-t is gone from Spotify,” Skee Mask said of his music’s just-finalized removal from the Stockholm-headquartered service. “i have nothing against streaming in general, it’s one of many good ways to make music even more accessible!….

“my music will be available there again as soon as this company starts (somehow) becoming honest & respectful towards music makers. if you really don’t have the money to listen to my music in any other way, feel free to digitally steal it anywhere, BUT don’t give you’re [sic] last penny to such a wealthy business that obviously prefers the development of warfare instead of actual progression in the music business. PEACE!” concluded Skee Mask.

Regarding the “100 MILLION €,” “development of warfare,” and “PEACE” components of the statement from Skee Mask, Daniel Ek’s Prima Materia in November provided €100 million (about $113 million at the present exchange rate) in funding to Helsing, “a new type of security and artificial intelligence company.”

Read the post on Digital Music News

Monopolist Spotify has no monopoly on trust

It’s just a casual poll on Twitter, but an interesting result!

While we are not surprised to see Facebook the massive infringer and destroyer of worlds at 0% as least trustworthy, Google got a much higher score than we anticipated.

But the real headline was just how badly Spotify got beat by Apple, its main lawfare target. Mind you, the Trichordist audience is heavily weighted toward artists and songwriters, so it’s not surprising.

Do we know much about what share of average salary that consumer spends on streaming?

I ran across an interesting 2019 study by researchers at the University of Glasgow (sorry Celtics fans) and the University of Oslo that takes a deep dive into streaming (summarized in this handy infographic).

The research…shows that when plotted against the changing average salary of a US citizen over history, consumers were willing to pay roughly 4.83% of an average weekly salary in vinyl’s peak year of production in 1977, a price which slips down to roughly 1.22% of an average weekly salary in 2013, the peak of digital album sales.

The advent of streaming over the last decade, now means for just $9.99, or just over 1% of the current average weekly salary in the USA, consumers now have unlimited access to almost all of the recorded music ever released via platforms like Spotify, Apple Music, YouTube, Pandora, and Amazon.

And then there’s the environmental impact of streaming. MTP readers will recall that I’ve been on the “dirty data” tip for years and tried to discourage readers from accepting–and in my mind being deceived by–Big Tech’s misdirection play about being green. They dearly want you to believe that the what powers everything from Google searches, to YouTube videos, to Spotify streaming is magic elves running on golden flywheels transmitted over gossamer wings.

This study confirms what we’ve seen in other reporting on the pollution of data centers sucking down hydro power in states like Oregon (represented by anti-artist mainliner Senator Ron Wyden–coincidence?). The study tells us:

“These figures seem to confirm the widespread notion that music digitalised is music dematerialised. The figures may even suggest that the rises of downloading and streaming are making music more environmentally friendly. But a very different picture emerges when we think about the energy used to power online music listening. Storing and processing music online uses a tremendous amount of resources and energy – which a high impact on the environment.”

It is possible to demonstrate this by translating the production of plastics and the generation of electricity (for storing and transmitting digital audio files) into greenhouse gas equivalents (GHGs).

The research shows GHGs of 140 million kilograms in 1977, 136 million kilograms in 1988, and 157 million in 2000. But by 2016 the generation of GHGs by storing and transmitting digital files for those listening to music online is estimated to be between 200 million kilograms and over 350 million kilograms in the US alone.

So it already fails on the S (due to horrendous treatment of creators) and it’s refusal to exercise pricing power even though consumers pay so little; and the G (given Spotify’s extreme control by Daniel Ek’s supervoting stock to the exclusion of shareholders). It also looks like Spotify also falls down on the E, too, with its polluting business model. No ESG ETF for Spotify?

Not likely. The greedy Stockholm syndrome exploits everyone.

“Spotify is aiming to eliminate radio, expand payola, and increase their data mining of listeners”

It’s All About the Stock: Tone deaf Spotify Insiders Vote for Stock Buyback to Juice Their Share Price While Congress Questions Streaming Payola

Spotify announced a second billion dollar stock buy back last week which means they have $1 billion in free cash that they will spend, not for paying artists, not for paying songwriters, but to juice their stock price and make Spotify insiders and senior employees richer still. Remember that Spotify already did this once before in the pre-pandemic. Just like they lavish the artists’ money on their fancy World Trade Center offices and buying the Arsenal Football Club, a second billion dollar stock buy back means more of the same while they pay artists a pittance, songwriters even less and session performers not at all.

Every Spotify employee should understand that the income disparity between their monopoly business practices and the creators who drive the fans to their platform that Spotify monetizes out the back door has never been so dire.

Why do you care? A few reasons. First, it demonstrates that Spotify has plenty of cash laying around despite its continued loss making–which confirms the “get big fast” and devil take the hindmost strategy that has driven the company to make its insiders extraordinarily rich. So when Spotify tell you (and the UK Parliament) that they can’t pay a fair royalty because they’re struggling so much, here’s more evidence that those claims really are as much bunk as they sound like.

Second, it highlights the value transfer from featured artists who barely get paid at all and non-featured artists who really don’t get paid at all. The real value to the music that Spotify pays at a hundredths of a penny is reflected in the share price and market value, not the revenue which they refuse to increase as they pursue their growth strategy. This failure to allow the creators that make their company to capture value through higher royalties is the subject of a study I co-wrote for the World Intellectual Property Organization and is underlying the Spotify royalty crisis.

But perhaps most importantly it’s yet another tone deaf move by Spotify that ignores both the Congressional payola inquiry into Spotify’s business practices as well as the streaming income inequality that’s argued every day as the walls close in on songwriters trying to make a living and artists trying to tour in a life threatening environment. As Senators Bernie Sanders and Chuck Schumer wrote in a New York Times op-ed, stock buybacks should not come at the expense of workers, which I would argue includes artists and songwriters in Spotify’s case. For a deeper dive, see Profits Without Prosperity by the economist William Lazonick in the Harvard Business Review.

Professor Lazonick tells us:

Though corporate profits are high, and the stock market is booming, most Americans are not sharing in the economic recovery. While the top 0.1% of income recipients reap almost all the income gains, good jobs keep disappearing, and new ones tend to be insecure and underpaid.

One of the major causes: Instead of investing their profits in growth opportunities, corporations are using them for stock repurchases. Take the 449 firms in the S&P 500 that were publicly listed from 2003 through 2012. During that period, they used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock. Dividends absorbed an extra 37% of their earnings. That left little to fund productive capabilities or better incomes for workers.

Why are such massive resources dedicated to stock buybacks? Because stock-based instruments make up the majority of executives’ pay, and buybacks drive up short-term stock prices. 

Here’s the Spotify press release:

Spotify Technology S.A. (NYSE: SPOT) (the “Company”) today announced that it will commence a stock repurchase program beginning in the third quarter of 2021. Repurchases of up to 10,000,000 of the Company’s ordinary shares have been authorized by the Company’s general meeting of shareholders, and the Board of Directors approved such repurchases up to the amount of $1.0 billion. The authorization to repurchase will expire on April 21, 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The repurchase program will be executed consistent with the Company’s capital allocation strategy, which will continue to prioritize aggressive investments to grow the business.

“This announcement demonstrates our confidence in Spotify’s business and the growth opportunities we see over the long term,” said Paul Vogel, Chief Financial Officer at Spotify. “We believe this is an attractive use of capital, and based on the strength of our balance sheet, we continue to see ample opportunity to invest and grow our business.”

Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, all in compliance with the rules of the United States Securities and Exchange Commission and other applicable legal requirements.

The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

What are they not telling you? Well, first of all I’m not so sure how strong the Spotify balance sheet really is, with all due respect to Mr. Vogel (who is no doubt pitching a stock buyback that he probably personally benefits from as a shareholder). Without grinding through details, let’s say that Spotify’s stock is down 30% from its COVID-induced highs so there’s that. Someone else seems to think the balance sheet isn’t all that.

Why do I say that Spotify’s stock buy back juices the share price and earnings per share? It’s simple–you keep the financial metrics like revenue and earnings separate and constant. The share price and earnings per share is a function of market capitalization, a ratio based on the number of shares outstanding. And here’s the key: By reducing the number of outstanding shares alone, you can increase the stock price and the earnings per share without actually changing anything about the company’s financial performance (kind of like a reverse stock split).

Stock repurchases are usually funded through hitting an account called “retained earnings” and buying the shares in the open market at a fixed price, sometimes through a tender offer. If there is insufficient retained earnings, the company can take on debt. Spotify doesn’t mention in its press release exactly how this particular buyback will be financed, but it’s usually one or the other, and otherwise in compliance with the SEC Rule 10b-18 safe harbor for issue repurchases for those reading along at home.

The key takeaways:

  1. Spotify is a monopolist and has plenty of money
  2. Spotify is doing a stock repurchase to juice the share price and make it look higher than it is, fooling no one on Wall Street
  3. The major beneficiaries are Spotify insiders like Daniel Ek who control the company, the board and all shareholder votes.
  4. Spotify have the money to compensate featured artists, nonfeatured performers (musicians and vocalists) and songwriters but choose to spend it on themselves.