Spotify Australia chief given hard time over secret and (possibly) low royalties

By | Published on Thursday 24 May 2012


When Spotify Australia MD Kate Vale agreed to appear on Aussie radio station Triple J to discuss the recent launch of the popular streaming service down under she probably expected to discuss why the digital service is so fun and fab and free. Rather she got a Paxman style grilling on why her company was ripping off artists everywhere. Well, some would argue that Spotify is really a competitor to radio more than iTunes, so perhaps she shouldn’t have expected too smooth a ride.

Certainly Vale didn’t seem particularly well briefed on some of the topics brought up by Triple J presenter Sophie McNeill, forcing the Spotify MD to admit that she simply didn’t know why the streaming platform had never revealed what it paid different labels for permission to play their music.

Of course various artists and smaller labels have complained in the last year or so that the monies they receive from Spotify are tiny, and not worth it if you believe a presence on the streaming platform can have a negative impact on iTunes-style download sales. And while the majors routinely come to Spotify’s defence, cynics might argue that they are probably getting much better royalty rates and, anyway, are biased given their albeit small equity stake in the digital music firm.

But then again, there are plenty of Spotify defenders in the independent sector too, including labels and distributors who have no vested interest. Yes, those defenders argue, the royalties from Spotify start off small and will always be negligible when music is played via the freemium service. But, they add, over time revenues will improve – especially if labels learn to market their content to streaming audiences better – and everyone needs to take a hit on Spotify Free, because it’s proven to be an incredibly effective marketing tool for Spotify Premium.

And bringing up the old “Lady Gaga only made $167” line, as McNeill did, isn’t really helpful, as that [a] related to 2008 royalties, [b] was just for Sweden, and [c] was publishing money via collecting society STIM, and therefore didn’t include the substantially bigger royalty her label would have got for the recording rights in the same tracks. Still, McNeill’s underlying point, that all the secrecy surrounding Spotify royalties just feeds resentment in the artist and grass roots music community, is a valid one. Even if the secrecy is enforced more by the labels than the digital music providers.

Anyway, here’s a transcript of the interview from Digital Music News.