No More Poormouthing: Daniel Ek’s $310,000,000 Edifice Complex is Real, and Spotify’s PR Effluvia is Overflowing

As we reported February 9, Spotify is using hundreds of millions of its supernormal stock market riches to acquire naming rights to the Barcelona soccer team. The latest manifestation of Daniel Ek’s monopolist edifice complex was confirmed by Music Business World Wide and Variety among others, as well as Spotify itself. Barcelona’s iconic Camp Nou stadium (largest football stadium in Europe) will now be known as Spotify Camp Nou.

I assume that when Netflix finds out about this, there will be an epilogue to their Edward Bernays-style epic corporate biopic that will ignore the Rogan catastrophe but will include the Barcelona deal with a tight shot on the Spotify Camp Nou and probably a t-shirt vendor.

Let us take one clear message from this navel-gazing naming-rights deal to assuage Daniel Ek’s psyche after a losing bid to acquire the Arsenal football club and join the International League of Oligarchs. That message is that we don’t ever want to hear again about how Spotify “can’t make a profit” or “pays out too much money for music.” Daniel Ek–who controls the company through his super voting stock–has been running that diversion play for way too long and it’s just as much BS spewing from his mouth as it is any of the Silicon Valley oligarchs who whinge about how poor they are when they appear in court.

Let us also agree that anyone who takes a royalty deal from any DSP that does not include an allocation for stock valuation is quite simply a rube who must be laughed at and mocked in the Spotify board room. This stock value allocation doesn’t require a grant of shares, but can include a dollar contribution that tracks share value and should be paid directly to both featured artists, session musicians and vocalists through their collective rights organizations on a nonrecoupment basis.

But don’t let me describe the bullshit, read it yourself directly from Spotify’s “Chief Freemium Business Officer” whatever the hell that means:

Statement of Alex Norström, Chief Freemium Business Officer, Spotify

“We could not be more thrilled to be partnering with FC Barcelona to bring the worlds of Music and Football together. From July, our collaboration will offer a global stage to Artists, Players and Fans at the newly-branded Spotify Camp Nou. We have always used our marketing investment to amplify Artists and this partnership will take this approach to a new scale. We’re excited to create new opportunities to connect with FC Barcelona’s worldwide fanbase.

Spotify’s mission is to unlock the potential of human creativity, supporting artists to make a living off their art and connecting with fans. We believe this partnership creates many opportunities to deliver on this mission in unique, imaginative, and impactful ways.”

Yes, that’s right. Daniel Ek’s edifice complex is all about unlocking the potential of human creativity because it’s all for the artists, don’t you know.

These people continue to embarrass themselves with their insufferable 1999er BS without realizing that any artist whose name shows up on a single Barcelona jersey will extract a considerable additional payment that the artist will keep and the labels won’t save Spotify on that one. Even if they do, there are only certain artists who don’t mind their names appearing on Barcelona jerseys–for a price. The overwhelming majority will not only not want it but are insulted that the “Chief Freemium Business Officer” is so ignorant of their name and likeness rights that he would even remotely float the idea that Spotify had the right to do anything like that level of grift.

If Mr. Freemium is really serious about “supporting artists to make a living off their art”, forego the edifice stroke and just pay that money directly to featured artists, session folk, and songwriters that have made him rich. Until then, he should just say you’re damn right we used the stockholders money to soothe Daniel Ek’s wounded ego because he desperately wants to be accepted by the Party of Davos and the League of Extraordinary Dweebs. Because we’ve already established what kind of people they are, it’s just a question of negotiating the price.

But let’s face it–what the monopolist really wants is a branded Monopoly game.

Working for free only pays off for the owners of AI. And then there’s a negative side.

Yes, the word around the pitstop on the race to The Singularity is that the Epsilons are getting tired. The dominance of artificial intelligence playlist algorithms on artists’ careers is beyond chafing at a surface level–it’s wearing away muscle and bone.

Stuart Dredge has an insightful post on the subject with a couple choice quotes:

“We’re asking artists to do a lot. They’re not just recording and touring. Now they’re expected to understand crypto and NFTs, and expected to be using TikTok on a regular basis, and be on their Twitter feed, and on Instagram, and creating content and engaging with fans,” said Matthew Maysonet, head of sales and marketing at Empire.

“It’s a huge task! They’re holding multiple jobs in addition to creating art, and I think a lot of times, people forget that music is art, and it takes a certain mindset and level of focus to create that itself, let alone commercialise and monetise it.”

“We do risk burnout for some artists who are using all these socials, including having to worry about the algorithms on different DSPs. ‘If I don’t release a single every five to six weeks I’m not pinging that algorithm and my monthly listeners are going to decrease…’”

“Those are things that artists never had to really worry about before, at least on this score. I’m excited to see how we as an industry accommodate and approach that over the next few years to even things out a little bit… I think it’s something we should be addressing.”

It is something we should be addressing, but it’s at the core of the streaming juggernaut that has made a number of powerful people very, very rich. We don’t have to renew Daniel Ek’s role as Simon Legree, but firing him will not be easy since he essentially is the streaming hegemon based on his supervoting shares of Spotify’s stock alone.

What is artificial intelligence that is at the core of playlist algorithms? it’s kind of like having a continual seat belt warning with an automated driving system that keeps you from moving over 5 mph but forces you to drive forward and then backward over endless speed bumps combined with always-on parental controls all rolled into one and implanted in your brain, but operated by droids who speak in sentences they claim to be declarative but end with a question inflection who keep warning you that you’re choosing not to work hard enough for a reward (so it’s your fault you’re broke) while Daniel Ek and the swamp children float through a miasma of misery asking “how many fingers, Winston?” as though that made sense. And you do it all for free so a Prime Mover can scrape your data, your fans’ data, and the data of your unborn children and sell it to the other members of the data timocracy, all for the hope of hitting a jackpot when the odds are all on the house. Because Justin Bieber.

Cool, huh? Let’s have more of that. And somewhere Russ Solomon is saying, “Miss me yet?” This is why I say “data is the new exposure.”

It’s becoming increasingly apparent that artists have had about enough of this whole thing, but having boarded Kafka’s Merry Go Round with hope, they are having a hard time getting off with their sanity.

Which is to say that changing this predictable Hunter S. Thompson universe we’ve allowed to fester is not going to be easy, but if we don’t…we may find that “The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.”

@alexeiscribe:  Universal Music Group Pulls Out of Russia

Universal Music Group, the world’s largest music company, says it is pulling out of Russia — the latest in a series of moves by global music companies taken in response to the country’s invasion of Ukraine.

“Effective immediately, we are suspending all operations in Russia and closing our offices there,” the company says in a statement sent to Billboard on Tuesday (March 8). “We urge an end to the violence in Ukraine as soon as possible.”

Read the post on Billboard

@digitalmusicnws: Is TikTok Safe for Kids? Platform Faces At Least Eight State Investigations Over Its Impact On Children and Teens

Eight states (Massachusetts, Florida, California, New Jersey, Vermont, Kentucky, Nebraska, and Tennessee) just recently announced their investigations into TikTok, which settled an Illinois privacy lawsuit for $92 million in 2021. The coordinated scrutiny arrives as TikTok – which has been described as “legitimate spyware” – remains extremely popular, reportedly boasting north of three billion downloads and more traffic than Google.

Furthermore, TikTok’s userbase reportedly skews young, and higher-ups have capitalized upon the platform’s prominence within demographics that are relatively difficult for companies to reach.

Read the post by Dylan Smith on Digital Music News

Remember this meme when Google tried to kill the Stop Enabling Sex Trafficking Act?

Another One Bites the Dust: Bandcamp acquired by Tencent’s Epic Games and still no fairness for session musicians

Bandcamp has been a safe haven for independent artists for years and throughout the pandemic. When asked by fans where fans can go to engage in fair commerce with artists outside of the downward centrifugal force of the big pool maelstrom, many said go to Bandcamp.

Now that Bandcamp is acquired by Epic Games, the cats paw of its 40% owner (that we know of) the Chinese surveillance company Tencent, the bloom may be off the rose. Tencent, like its affiliate Spotify, uses music for data scraping in the music-driven streaming data honeypot.

An example: Spotify has integrated “neuromarketing” into its advertising sales efforts.  “Neuromarketing” is an ethically controversial area of research; the literature tells us, for example, that “…recent opinions on ‘neuromarketing’ within the neuroscience literature have strongly questioned the ethics of applying imaging techniques to the purpose of “finding the ‘buy button in the brain’ and …creating advertising campaigns that we will be unable to resist.”).  In other words, “neuromarketing” marries quite well with the addictive qualities of social media and the endless playlist of the celestial jukebox designed to keep “users” connected to Spotify, or what I call the “streaming data honeypot.”

The Bandcamp sale raises a number of competition questions, however, and also some business ethics questions if nothing else. First and foremost is the ability of platforms like Bandcamp to follow in the steps of Google, Facebook, Tunecore and Spotify and skim the cream off of the artist’s efforts to drive traffic to their platforms for years that adds tremendous value to the firms’ valuation, yet does not share in that value with the artists when they cash in on all the years of work. This is particularly insulting when it comes to session musicians, or the “nonfeatured artists,” who get zero from streaming and less than zero on platform payday, be it an acquisition like Bandcamp or a public offering like Spotify–or Tencent.

Doing the acquisition through Epic Games allows Tencent to hide its hand and the other activities it engages in like surveillance of international users for the Chinese government through its WeChat messaging app.

How does this all jibe with the Bandcamp ethos? Well, it certainly wasn’t mentioned in the Bandcamp founder’s groovy message about “joining” the Tencent ecosystem. A target describing getting acquired as “joining” the buyer is Orwellian Silicon Valley-speak for “cashing out on your hard work and giving you nothing” as opposed to “I took twenty pieces of silver.”

Was there any discussion of what happens to fan data going forward now that it’s partly owned by someone who has real problems with surveillance? Or any protections from what happens when Tencent buys a majority stake in Epic?

Nope.

What it does tell you is that streaming is now becoming a game of market share, largely driven in my view by the tension at the heart of the market-centric royalty model. That algebra boils down to this: Your Streams ÷ Total Streams = Your Royalty. When the number of recordings on streaming platforms like Spotify increases at a rate of tens of thousands a day, there will be an impact, even at the margins, on the number of Total Streams. If Your Streams does not increase at a rate that is greater than the increase in the rate of Total Streams, what happens?

Your royalty declines over time. It is math. It will happen–unless–unless you find a way to slow that decline by increasing Your Streams (which was the plan). The fastest way to do that is to acquire catalogs. Note that even if you have hits and build careers, it may not do that much long term to increase your streaming revenues quarter after quarter, which translates into month after month, week after week, day after day. And as streaming is becoming the dominant distribution configuration…that only left platforms like Bandcamp as a place that artists could get a fair return and sell in configurations of their choice. We’ll see how long that lasts.

What it does mean is that the industry got a little more concentrated and choices got a little narrower and achieving escape velocity of the streaming tractor beam of death got a little harder. And another one bites the dust.