Union of Musicians and Allied Workers Calls New Spotify Scheme “Payola”

Sound and Vision

The struggle for independent musicians to make money on music streaming may have just gotten harder, thanks to a new Spotify scheme that some are calling payola. 

Listeners who were around in the golden age of radio, or those who are well versed in the history of the medium, might be familiar with the practice, where record labels paid radio stations to play their singles more often. That form of payola is now illegal. But today, a group of concerned musicians are accusing the streaming giant Spotify of engaging in a new form of payola or pay to play.

The news broke last week when Spotify announced it would amplify specific artists or songs in its radio and autoplay formats if labels or rights holders agree to be paid a quote “promotional recording royalty rate,” which is reported to be below the company’s standard payout. 

So basically, if you want your music to be discovered more on Spotify, Spotify will pay you less for the streams they are helping promote. This announcement came a week after more than 18-thousand independent artists in the Union of Musicians and Allied Workers presented a new campaign demanding that Spotify pay at least one cent per stream, rather than .003 to .005 cent a stream. Their campaign is called Justice At Spotify

Cody Fitzgerald with the Union of Musicians and Allied Workers says the Spotify announcement came just as his group was demanding more pay for streams, not less.

“A week basically before they released this new seemingly payola scheme, you know, 18,000 musicians had just signed on to our new demands, asking Spotify to stop payola and pay us more money. And then they released a scheme where basically they can pay us less money as a version of payola. Spotify, which we already think doesn't pay indie artists or any artists really enough money, thinks that it's in their best interest to pay us less money to promote our music when, you know, we're giving them all of our labor on their platform already and we aren't being paid enough for that labor.”

Fitzgerald said there was already a growing frustration among musicians about unfair payment for streams at Spotify, and this new scheme did not sit well with many.

“I think there is just a pretty clear amount of anger at Spotify for this move. It felt so obvious and so outright. And it's just such a blatant version of this thing we've been talking about. In our demands, we asked for them to reveal whatever the existing payola they were doing was, because, you know, it kind of felt like it was maybe a back door or something behind the scenes. And then they came out with this very clear new version of payola that we could just see very plainly in the public eye. And so I think there's a lot of anger for musicians to just see this outright and very in full view as something they were promoting as a great thing for musicians, when in reality it's just a way to pay musicians less.”

In a time when touring and live performances have been halted by the pandemic, along with the associated lifeline of direct merch sales, many independent artists are finding it harder than ever to make ends meet. So getting better compensation for streaming royalties is vital, Fitzgerald said. He added that Spotify pays artists significantly worse than competing streaming services. 
The main goal of the Justice at Spotify campaign is to get the company to pay artists 1 cent per stream, as it can take well over 250 streams for an artist to get a dollar in royalties on average (some sources say artists can expect an average of $3 in royalties per 1,000 streams). The campaign lists more than just better compensation for artists among its demands, Fitzgerald said.

“The big things we were going after were payment, a higher payment rate, one cent per stream. Transparency, just showing us what their contracts are with major labels and what is actually going on in the company, what they're paying for, where all the money is going. And also asking them to credit all the labor that is involved in recordings and not just a few of the people. And also to end payola, which is why it's so crazy that this came out so recently and right after we launched this campaign.”

Spotify has not yet responded to the demands of the Union of Musicians and Allied Workers, nor did they respond to requests for comment on this story. But Fitzgerald says the more people who get involved in the Justice At Spotify campaign, the more likely it is that the company will have to respond in some way.

To learn more about the Union of Musicians and Allied Workers’ campaign, visit www.unionofmusicians.org. To hear Emily Fox’s full interview with Cody Fitzgerald, tune in to KEXP’s Sound & Vision.

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