How Spotify Is Scooping Up Indie Artists & Edging In on Label Territory

The latest streaming revolution? Direct-to-artist tools that could give traditional labels a run for their money.

As a songwriter for megastars like Drake and Rihanna, Starrah never has to worry about where or how to distribute her work. But as a singer and rapper in her own right, she’s like any other independent artist -- eager to push her music on streaming services without going through costly, cumbersome middlemen.  

Thanks to Spotify’s direct-upload tool (now in beta testing) and a growing number of similar services across streaming platforms, artists like Starrah increasingly won’t need a label or even an indie distributor to get their music to a wide audience. (Spotify also released a playlist tool in October allowing artists direct contact with its curators.) “It really could disrupt things,” says Nick Jarjour, Starrah’s manager. “It creates less barrier-to-entry for artists, and that in itself is a good thing.”  

So far, Spotify has been the most aggressive of the streaming platforms in launching direct-to-artist tools. In October, the service invested in DistroKid, which could soon allow artists who use Spotify to post the same content on rivals like Apple Music and Tidal. And earlier in 2018, Spotify offered to give six-figure advances to managers to license their artists’ music directly to the service. Although Spotify stock has wobbled with the recent stock-market fluctuations, investors have rewarded the company whenever it reveals these kinds of deals. “We expect these tools to help us continue to provide the largest opportunity for the widest group of creators and artists,” said Spotify CEO Daniel Ek in a November third-quarter earnings call.

Other platforms are following suit: In December, Apple Music bought Platoon, a London startup offering lesser-known artists tools for funding, distributing and marketing their music; and last summer, YouTube started Premieres, which allows acts to hype new releases without having to use other social media. Universal Music, the world’s biggest record label, has yet to sell its 5 percent stake in Spotify and supports any investor enthusiasm to drive up the stock; Sony Music still holds half of its original stake as well. But major-label executives are watching the streaming giants’ artist-courting efforts warily, sweetening their own deals to sign acts while promising that labels can offer resources far beyond upload and playlist tools.

Spotify and other top streaming services “are not protecting the status quo. They are saying, ‘Let’s protect the future,’” says Zack Gershen, partner with mTheory, which provides services for artist managers and works with Major Lazer and twenty one pilots. “It’s all part of their attempt to democratize the business and level the playing field.”

This article originally appeared in the Jan. 12 issue of Billboard.