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27 April 2020

Spotify’s new “tip jar” won’t save the industry – but it asks us to consider music’s value

For the first time, the streaming platform has given listeners the opportunity to pay artists directly for their music.

By Ellen Peirson-Hagger

On Wednesday, the music streaming platform Spotify announced the introduction of an “Artist Fundraising Pick” function. The new feature will allow musicians to place a “Make a contribution” button on their page, offering fans the opportunity to donate directly to the artist, or to a charity of their choice. This is the first time the platform has given listeners the opportunity to pay artists directly for their music. 

The new function aims to “support artists and the creative community who have been deeply impacted by the effects of the devastating virus”, namely, those musicians who will drastically feel the financial impact of cancelled tours, studio sessions and promotional opportunities. 

Streaming revenues surpassed CD sales for the first time in 2017, following decades of technological change that has repurposed the value of recorded music. Once, artists toured to promote sales of CDs, cassette tapes or vinyl records; now, albums, streamed on platforms such as Spotify, Apple Music and Amazon Music are used mostly to promote tours. Artists rely on live ticket sales more than ever, but with venues closed and international travel impossible because of the pandemic, many musicians have been left without an income.

Spotify has long been criticised for its monetary system, which many believe does not fairly remunerate artists for their work. Previously, musicians such as Taylor Swift and Radiohead’s Thom Yorke have boycotted the platform over royalty rates, though those protests haven’t lasted and, after temporarily taking their music off the platform, both artists returned to it. Even for musicians who deign to kick up a fuss, the reach provided by streaming services has become necessary for anyone trying to release music into the mainstream.

Spotify does not disclose just how much it pays artists, but analysts have calculated that the rate lies at an average of $0.00318 per stream, giving a song’s rights holder $3.18 (approximately £2.58) per 1,000 streams. Like other streaming services, Spotify uses a “pro rata” system, which means that the money generated from listeners’ monthly subscriptions is added together and then divided proportionally by listening time. The artists who are listened to the most see the most profit. It should also be noted that this payment goes to a song’s rights holder: this tiny amount may be split between a label, producers, songwriters and the artist. This, coupled with the platform’s playlist system which sees the biggest exposure given to artists signed to major labels, heavily benefits already successful and financially well-supported artists, leaving independent musicians far behind.

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Spotify has called its new function the “Artist Fundraising Pick” to equate it to the pre-existing “Artist’s Pick”, a song a musician can choose to highlight at the top of their page. It’s a strange comparison but follows the platform’s insistence that extra monetary donation on top of one’s subscription is, of course, only ever going to be optional. The same button allows artists instead to ask their fans for donations to a particular charity, likely one providing Covid-19 relief, a feature that will separate artists into those who openly admit to struggling financially and those who can use this platform to promote their supposed goodwill in this time of global need.

More colloquially, the feature is being called a “tipping jar”. It has received criticism from artists and fans alike. The new function, some say, mocks artists who have long called for their work to be properly valued, which will never be enabled by a system such as Spotify’s. Writing in the Guardian, Ben Beaumont-Thomas called it a “slap in the face for musicians”, arguing that “it’s being initiated by the very service that helped to break the link between art and money” in the first place.

But the new endeavour will support a culture that the platform has never taken seriously before. Provided that fans are landing on relevant artist pages in the first place, it is likely that the “tipping jar” will disproportionately benefit smaller, independent musicians. The new feature follows an artists’ call for Spotify to triple royalty rates during the pandemic, which, unsurprisingly, went ignored. If Spotify were to increase royalty rates across the platform, it would simply give a cash injection to the highest streamed artists. This would have only a very minor positive impact on independent artists.

A tipping function, however, puts control directly into the hands of the consumer, the music fan. In just the same way a fan who buys their music physically may browse a record shop and weigh up the value of several different albums before making their selection – and with that, decide which artist best deserves their money – Spotify listeners can choose which artists they want to support directly. During this time of crisis in particular, the service offers an easy way for fans who have had gig tickets cancelled and reimbursed to give that money straight back to the artist who has lost out. 

The “tipping jar” model nods to sites such as Bandcamp, whose mission statement insists that artists “must be compensated fairly and transparently for their work”. The site is seen widely by artists and fans as one of the fairest platforms on which to sell music, and takes just 10-15 per cent revenue share on sales of digital downloads, and 10 per cent on physical goods such as CDs, vinyl records and t-shirts. Artists can list a CD album, for example, at a minimum price, which allows fans to donate additional funds – or tip. This model gives a base value to each item, whether it’s a physical disc to hold in your hands or a download to play via your computer, while encouraging fans who can afford to give more to support their favourite artists to do so. It sets a minimum value, but not a maximum. On 20 March, Bandcamp waived all fees for sales on its site, and, in a record day for sales, music fans spent $4.3 million, of all of which went directly to artists and labels. This success proves that music fans are happy to pay for artists’ work and now, more than ever, are willing to support them directly. The platform’s fees will once again be waived on 1 May.

As the pandemic has led to a proliferation of live streamed home concerts, questions of how artists should be paid for their work have found new forms. Many in the industry are in agreement that “tipping” alone should not be normalised because it devalues artists’ work across the board. Furthermore, this new feature, coming from a company that has long profited off underpaid artists’ music and played a heavy hand in transforming the industry for the worst, feels like a half-hearted gesture that by all accounts is too little, far too late.

Yet by its very existence, a “make a contribution” label on an artist’s Spotify page may make listeners question the value of the music they are streaming. In an era where monthly streaming subscriptions via direct debit make paying for music a passive act, questions of value are significant. We need to be asking ourselves what work we believe to be important enough to put a price tag on, and which artists most deserve our support. Albeit conflated and somewhat hypocritical, Spotify’s new feature encourages us to ask those questions – and that can only be a positive thing.

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