With deadlines, back-to-school, and poor local air quality, I was unable to write anything significant last week. I apologize. I am hopefully more consistent going forward.
Speaking of consistency, I want to continue talking about Spotify. Spotify is one of those businesses you expected to help bring about a beautiful universe for all creators. Instead, people make jokes about the money they make from the platform and it is so bad that artists have intermittently attempted to create their own competitive service.
I should add that I use Spotify as a free customer. I do so out of spite. My Google phone will let me use YouTube in the background to stream music randomly, and constantly reminds me that I can pay Google extra money for a service that a music platform gives me for free. Considering how many business gmail accounts I use, I am insulted that I can’t get one complimentary premium YouTube music account to let me stream music using software provided to me by the people who made the operating system.
I digress.
So how can we get from Spotify-as-a-deeper-circle-of-hell to Spotify-as-a-force-for-good for creators?
There is a path.
It involves moneys, and giving said moneys to the people who create the content. I don’t know who this guy is, but for that net worth from Spotify, I feel obligated to attend his first concert.
One of the fun parts of being involved in high tech over the years is meeting people with amazing ideas.
One of the most interesting ideas I have seen is the notion of the “sliding royalty”. Creators should have some means of saying “I wish to dedicate X% of my income to promotion, via the host platform, to increase discovery” and being able to modify that in real time.
I hardly think that artists like Miley Cyrus need Spotify for discovery purposes. Miley Cyrus and artists like her should command a generous revenue share from them.
Implementing a sliding royalty that can be used by artists to decide on how much to commit to marketing their content vs profiting from it is a good first step towards fixing this problem.
Another idea here would be to modify the revenue share based on the source. For example, I am a free Spotify listener. I do not know the unit economics of the ads I hear. It makes sense that the advertising revenue be largely owned by the platform. I dislike the notion of paying Spotify knowing that the revenue that comes from my pocket will largely go to “Not Miley Cyrus”. For the record I don’t really listen to Miley Cyrus, but I think you get the idea.
If Nissan Pathfinder wants to give Spotify some money to try to persuade me to buy a Nissan Pathfinder, I am fine with the ad sales team at Spotify making a generous portion of cheddar. To be fair, the more ads I hear from a particular company while listening to music, the more irritated I get with the brand being advertised. In this particular case I am talking about Nissan Pathfinder because the amount of Nissan Pathfinder ads I get makes me very much want to never own a Nissan Pathfinder.
That is somewhat beside the point and perhaps a conversation for another day.
The big point is that Spotify ought to try to fix this problem and start experimenting with revenue models. I would be happy to give them some of my money if I thought it was going to the right people—namely the creators.
They could put in some tools to work with creators to give them control over royalties and promotion.
They could even add in controls for superfans, who wish to support specific artists, Patreon style. If you had a 30 dollar per month offering that included a monthly digital exclusive package, and perhaps an annual physical goods drop that included VIP t-shirts and (gasp!) Compact Discs, there are people willing to give you their hard earned moneys.
I guess by now you might realize that I am not just crapping on Spotify. I am crapping on just about every platform company out there. I have directly offered the sliding royalty idea to just about every major platform out there.
They have all shrugged and gone back to their existing roadmaps because ensuring that the value chain works for everyone doesn’t help them hit their OKRs.
Some famous person somewhere said “Content is King”. I believe that to be true. I am excited that there are companies out there pushing for platform-level change. This includes things like the Epic Games lawsuit against Apple, and Tim Sweeney’s statements about committing to dropping exclusives if Steam matches their revenue share.
We are on an evolutionary path towards an increased revenue share for people who make things that other people love. I watch companies struggle against it and try to furiously stuff as much moneys in their pockets as possible while they can.
I am hopeful that this touches a nerve for a platform decision maker somewhere, and that they will wake up tomorrow and look at themselves in the mirror REAL HARD and ask “at what point did I turn into Spotify?”
Thank you again for reading along. I apologize for the gap in ranting last week. I will do my best to keep to my schedule going forward.
