Spotify's Troy Carter Concedes Artists Aren't Being Paid Enough By Streaming Services

Troy Carter in Los angeles
Earl Gibson III/WireImage

 Troy Carter attends Russell Simmons 'Rush Philanthropic Arts Foundation's Inaugural Art For Life Los Angeles' on May 3, 2016 in West Hollywood, Calif.

The streaming service's global head of creator services made the comment at a Music Biz 2017 Convention keynote.

Troy Carter, Spotify’s global head of creator services, conceded in his keynote interview today' at the Music Biz Convention, that artists aren't being paid enough by streaming services.

In a follow-up comment, however, he successfully evaded assigning blame to Spotify or any other streaming service or labels by saying, “We need to reconfigure the value chain."

As an example of this, he said, the old model with albums was that songwriters who wrote a hit song got the same amount of money from publishing royalties from album sales as the person who wrote the worst song on the album. “Now the hit songs really matter," Carter said, "so whoever that manager is has to rethink the value chain.”

Carter earlier had said he didn't want to comment on the service's profits (or lack thereof), but went on to say that the Spotify model is sound and proven successful.

The interview largely focused on how Spotify will help the artist reach fans and make more money. He noted that Spotify spent the first ten years focused on the customer experience and now the company will work on building the artist experience helping them to build a lucrative economic bridge to fans.

Last month the streaming service upgraded its Fan Insights rebranding the initiative as Spotify for Artists, complete with new features and controls that allow artists to not only peek under the hood at their data through the service, but also to manage their artist presence within Spotify itself.

Carter, who previously managed artists such as Lady Gaga and Meghan Trainor, noted that Spotify has been great at picking songs, but now the company will shift towards developing artists. “How do you build out artists' bodies of work into helping them build global tours,” Carter asked. “So now we are investing in artist careers.”

Spotify has demographic data it collects which should help artists maximize revenues. Spotify, Carter said, has plenty of information of fans that artists can use, including gender, age and location as well as how much they  listening to an artist and which songs.

He also said that with all of today's ticket bots, when artists look out at an audience they often see rich and casual fans up front. But with Spotify, artists can create fan experiences that build bridges to fans who are leaning into their music and who deserve to have a chance at being in the front.

Moreover, he said Spotify data will allow artists to more efficiently book tours, which will yield more lucrative results.

And while he said Spotify wants to break down genres, he claimed the service will also help country music enjoy global success. “There are stadium acts in the U.S. who are country artists,” Carter said. “How can we help them reach that status” around the world?

When The Tennessean music business reporter Nate Rau told a story about an artist using his streaming income statements to get a loan, Carter observed that the artist would probably get better rates from the bank than a label which he suggested might employ predatory lending practices.

Carter also denounced the practice of exclusives, even though Spotify has benefited from them on occasion in the past. He said the best way to reach all of your fans is to have the music available to everybody without limitations.

When pressed on whether artists need labels, he saidlabels can bring a lot to the table but that each artist has to make their own decision. Spotify, he claimed, is helping to create an environment where each artist can make that choice for themselves..

Further, he reminded convention delegates that Spotify, for all the impact it has had on marketing, is still in its infancy. “We are just scratching the surface of what the [Spotify For Artist] tool will be,” he said. “It will become a tool that you almost won’t be able to operate without.”