The second demand centers around transparency, calling for the public disclosure of all Spotify’s contracts with labels, publishers, distributors and management companies; "open[ing] the books" for Spotify to "declare all sources of income"; "reveal existing payola, then end it"; and crediting every party who worked on a particular record.
The third demand is to "stop fighting artists," which is a reference to the current CRB rate determination battles playing out between some DSPs, including Spotify, and the publishers, which has been sent back to the copyright royalty board for review by the federal court of appeals. (Read everything you wish to know about what’s going on right here.)
In terms of the payment demands, the Union points to the number of streams it would take for a song to generate $1 on the platform (263), to pay for an average cup of coffee (786) and to cover the average American monthly rent of $1,078 (283,684 per month).
However, some of those issues are relics of the industry standard model that has struggled to keep pace with the digital music business, with contracts that are still based on sales in an industry that has been kept afloat by streaming revenues for a half decade. Spotify also doesn’t actually pay artists directly, with payments filtering through rights holders like record labels, publishers and performance rights organizations that take cuts based on artists’ contract terms.
The user-centric payment model, meanwhile, has seen an uptick in support of late, particularly in Europe, although several studies have questioned whether it would benefit smaller artists as much as its proponents suggest, or at all given the costs associated with switching to the model. (Here is a good roundup of arguments on all sides.) But more significantly, there isn’t much industry support behind the idea. Over a year ago, Deezer announced its intention to switch to a user-centric payment model, with diagrams touting the differences and positives. But it’s not really a decision Deezer can make without rights holders signing on to the switch, and it’s telling that, 13 months since its heralded announcement, fewer than 15 of its partners have signed on to publicly support the initiative.
On the transparency side of things, deals between Spotify and its rights holders -- labels, publishers and the like -- all include NDAs, which go both ways, meaning Spotify wouldn’t be able to unilaterally reveal the contents of such contracts, while its status as a public company mean that much of its financials are in the public domain. And the issue of credits -- songwriter credits, producer credits, publisher credits, additional musician credits -- speak to a much larger institutional issue that has been exacerbated in the music business with the digital switch, due to unreliable and missing metadata, which has, at times, meant millions in unclaimed royalties from streaming services sitting in escrow due to the DSPs’ inability to find who to pay. This is an issue that is finally looking to be addressed by the Mechanical Licensing Collective, which was put in place by the passing of the Music Modernization Act in late 2018, which is set to finally begin operations in January 2021. It will probably not be a perfect solution, but after several failed attempts to address the metadata issues and "black-box money" problems over the years, it’s a step in the right direction.
Yet there is a shifting conversation here, particularly, as the UMAW points out, as the coronavirus pandemic restricts artists’ ability to tour and generate money in other ways, and becomes increasingly reliant on streaming revenue in order to pay bills and cover the rent. "Spotify is the most dominant platform on the music streaming market," the UMAW states. "The company behind the streaming platform continues to accrue value, yet music workers everywhere see little more than pennies in compensation for the work they make."