After Spotify held their investor day to prepare for their direct listing on the New York Stock Exchange on April 3rd, trance DJÂ Gareth Emery took to the media to analyze and expose what he finds are their shortcomings in artist compensation.
Gareth Emery has a massive fan base and speaks from experience as an artist with the Spotify platform. He disagrees with CEO Daniel Ek’s statement that the streaming platform is a two-sided marketplace for both fans and artists.
“Spotify has always been run for the benefit of the major record labels – all of which are shareholders – whilst artists get crumbs from the table.”
Emery explains that the entire process for artist compensation is no straightforward matter. A process that can take up to two years, and won’t guarantee a liveable income for an artist like him with over 1 million listeners and tens of millions of streams. He lambasts the statements from Ek, as the touted profits of Spotify benefit the major shareholders, who also happen to be all the major record labels.
Gareth is trying to make waves in the industry to disrupt the still-traditional methods of artist compensation. His article is in line with the new cryptocurrency-based streaming service he intends to launch soon, called Choon. The service based on the Ethereum cryptocurrency is designed to eliminate the middle-man and let fans pay artists directly through Smart Contracts. Instead of the traditional process of royalties being paid to major record labels trickling down to the artists, and in Spotify’s case as Emery said, “while the way fans consumed music has changed, artists’ compensation is stuck in the dark ages.”
During their investor day Spotify boasted increased margins and a revenue of €4.09 billion for 2017. Emery says:
“…when you factor that the people that actually create the product (artists) get almost nothing, you realize the current music streaming industry is an elaborate smoke & mirrors system where all the money conveniently ends up with intermediaries and middleman: the world’s major record labels.”
With Choon, Emery hopes to “smash the old system, disrupt the hell out of it, and build a new music industry from the ground up.” More and more artists are starting to release their own currencies, with Gramatik launching his GRMTK crypto around the same time as Emery. Gareth Emery is certain there is room to evolve the industry and bring it to the 21st century.
