The current wave of online music streaming services are facing severe criticism for the staggeringly low revenue they provide to artists. Spotify, probably because it is being hailed as the future of music by major labels, takes the brunt of this fire. Specifically, it has been criticized for favouring major labels, over indies, in terms of percentage revenue given back.
Rather than demonising them, which despite what it may seem is not our intention, it is important to consider what Spotify actually is. As a subscription streaming service, it is unlikely to ever provide enough revenue back to smaller artists to support them. They do proclaim they are about music discovery, not music ownership. It is not greed on Spotify's part that is the problem. They are still making a massive loss due to the exorbitant licensing fees that were required when they crossed over to the US. The issue is really that they chose the major label route... a route that required all these sorts of compromises. If they want the majors' catalogues, they have to give them special treatment, and losing the majors hurts more than losing the indies (like the 4 indies who have already pulled out). Subsequently, they chose the Facebook route, and the list of compromises that the Zuck required on that front resulted in a fistfight between Sean Parker and Mark (as tabloid as that is).
Spotify are playing with the big boys... and as a result, the small boys will suffer for it. This just isn't really the revolution in music that most hoped would occur. A solely stream-based landscape seems like it might benefit the big names, and leave the average music Artist struggling more than ever before.
Based off this article from Music Think Tank.
