Spotify’s expansion into Korea featured a glaring omission: No artists distributed by Kakao M were added to the platform. A music distribution company and talent agency, Kakao M is a subsidiary of Korean tech giant and media conglomerate Kakao; it is perhaps best known for buying South Korea’s largest music streaming platform, Melon, in 2016….The purge appeared to be massive, impacting established artists, newer groups, indie artists, and everyone in between. Bill Werde, the former editorial director of Billboard, called it “red wedding territory for global K-Pop,” a reference to an infamous Game of Thrones scene involving the slaughter of multiple characters.
The outcry from fans was immediate: #SpotifyIsOverParty started trending on Twitter, and users reportedly canceled their Spotify subscriptions in droves. The streaming service took down the entire platform temporarily for maintenance, though some fans believed it was done to prevent them from canceling their accounts en masse. (Vox has reached out to Spotify for comment.)
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.
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:
In case you missed it, the creator’s loss is Spotify’s gain. No, today is different than usual, because this time Spotify’s gain is not just tied to the misery of artists and songwriters, it’s actually tied to the whole world. According to TechCrunch:
The coronavirus may be decimating some corners of the economy, but the impact on the digital music, as evidenced by the world’s biggest music streaming company, appears to be minimal. Today Spotify reported its earnings for Q1 with revenues of €1.848 billion ($2 billion at today’s rates) and an inching into a positive net income of $1 million. Monthly active users (not total subscribers) now stand at 286 million, with paid (premium) users at 130 million and ad-supported monthly active users at 163 million. Ad-supported users are growing at a slightly higher rate at the moment, at 32% versus 31%, Spotify said.
So far today, SPOT is up $16 a share, which means Daniel Ek made roughly $656,000,000 today alone. And that doesn’t count the warrants.
So the bubbly is flowing at World Trade Center or wherever the Spotify elites are hiding out.
Just like at your house, right?
Do they care about your problems?
[Apple gets it–it’s about the reporting…it’s time for Spotify to raise prices and dump the free service. Netflix has done it a bunch.]
The news business hasn’t shown so much promise in years—and not because of the specifics of Apple’s offering or anyone else’s. Leading publications like The Journal, The Times, and The Post all already have robust subscription offerings. Whether or not they enhance their business models by participating with Apple is neither here nor there from an existential perspective. The point is the industry is surviving, maybe even thriving, by charging its customers for their high-quality product. Finally.