After a decade in which it seemed like illegal downloading had made it all but impossible for record companies to eke out a profit, recent years have seen things improve for the music industry. The rise of streaming services like Spotify have helped restore the major labels—now fused into three massive conglomerates—to their nineties-era wealth, with untold riches beckoning on the horizon. Despite this, the situation for musicians has never been grimmer. Streaming has failed to match the income that artists once garnered from album sales. Constant touring has replaced some of this, but for many, especially older performers, it can’t make up the gap.
While musicians struggle to bring attention to these untenable conditions, the industry’s C-suite has focused their efforts elsewhere. As firms like Spotify and Pandora glided to multi-billion-dollar valuations, hailed in the press as “saviors” of the industry, they failed to pay for all of the intellectual property on which their products were based. This gave rise to a slate of expensive and potentially destabilizing litigation that threatened such companies—and the major labels’ projected earnings. Faced with these pressing concerns, record label executives, music publishers, tech moguls, and telecommunication lobbyists came together to create legislation to address what they perceived to be the pitfalls of music’s new digital economy.
Remember when Spotify bought Joe Rogan’s podcast and signed him to deliver futures? Big money, big press release. Big chuckles in some quarters, why? Welcome to the world of artist relations, Mr. Ek.
Here’s a suggestion. When you sign an artist who you know is controversial going in, expect…you know…controversy. Is that really so hard to figure out? And understand that whatever that artist does, their brand is potentially going to be wrapped around your brand.
In Spotify’s case, there are plenty of controversial recording artists who have been distributed by Spotify. None of that has blown back on Spotify. In Joe Rogan’s case, however, Spotify is essentially the label. Remember all that guff from Daniel Ek about middlemen and gatekeepers? Well, guess what? Spotify is ostensibly Joe Rogan’s gatekeeper, but nobody told Joe Rogan. Which is problem #1 for Daniel Ek.
I seriously doubt that Mr. Rogan gives a hoot what Mr. Ek or any of his employees think of Mr. Rogan. I’m not a listener, so I have no idea how genuine the outrage is, but even if it is the most genuine outrage, Daniel Ek signed up for this. Daniel Ek paid lots of the shareholders’ money for this. Daniel Ek has the company’s governance structure rigged so he’s both president for life and also controls the board. Which is problem #2 for Daniel Ek–he brought this on himself.
So here’s a little unsolicited advice. When your artist comes to you with a recording that you simply cannot bring yourself to release, what you don’t do is tell them to change it. What you don’t do is censor them. That is, as we say in the trade, a chickenshit move. And I don’t care which or how many employees are offended.
What you do is you offer the artist one of two options, both of which are financially painful but ethically healing. First, you have a frank conversation with the artist where you explain that you are not putting out their record but you respect their right to say what they want to say. And if you don’t actually believe that, then you are in the wrong business and you have problem #3.
Then you tell the artist, I will let you go and you don’t owe me anything. This is the clean break option.
If the artist doesn’t want to leave–and notice that money has not come into the conversation and isn’t going to–you tell them they are free to take the record somewhere else and Godspeed and you’ll work with them on their next record. You want nothing more than to preserve your relationship with the artist whether on or off the label. You should want this because if you thought highly enough of them to sign them in the first place, and if they thought highly enough of you to sign with you in the first place, then that relationship is what matters, not the cash.
The cash is rarely significant and soon will be forgotten…well, you’ll definitely take grief from the bean counters, but screw them. What people remember is how you conducted yourself in the situation. That’s what matters.
And that is what seems to be lost on Mr. Ek. Be honest–are you surprised?
Budden says Spotify used him as a guinea pig for this larger strategy, and accused the company of not supporting him. “Spotify never cared about this podcast individually,” he said on his latest podcast. “Spotify only cared about our contribution to the platform.”
Through a LinkedIn email, I learned that a recent staffer on the Senate Judiciary Antitrust Subcommittee was recruited by Amazon’s public-policy arm this month. I took to Twitter to express my dismay, and quickly learned that another staffer on the Senate Judiciary Committee was recruited by Facebook’s competition policy arm in May 2020.
These two staffers are now working for the tech platforms, and presumably against my ideas, after having heard my ideas in a private setting.
It is important to note right here that I have no beef with these fine folks.
But I do.
In case you were wondering what the value of songwriting is to Spotify, I think you can measure it pretty directly by the perks they hand out to their employees. I’m sure creators are glad to provide the value that takes care of these folks–while they scrape for every fraction of a penny in Spotify’s many lawsuits.
Additional benefits received by our Swedish employees, including Messrs. Ek, Söderström, and Norström, include private healthcare, accident insurance, life and long-term disability insurance, travel insurance, and parental leave. Additional benefits received by our U.S. employees, including Mr. McCarthy and Ms. Ostroff [who has a $1,000,000 base salary], include medical, dental, and vision benefits, medical, and dependent care flexible spending accounts, short-term and long-term disability insurance, basic life insurance coverage, and parental leave. These benefits are provided to our named executive officers on the same general terms as they are provided to all of our full-time employees in the applicable countries.
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices in the competitive market.
We do not view perquisites or other personal benefits as a significant component of our executive compensation program.
And then there’s the cash and stock, like the “Chief Content Officer” who must have line responsibility for the licensing incompetence and goal post moving: