Spotify launched Loud & Clear, a new web portal that aims to increase “transparency” by presenting data on how streams determine artist payout. The launch came days after worldwide “Justice at Spotify” demonstrations took place, led by the Union of Musicians and Allied Workers (UMAW)
“Artists deserve clarity about the economics of music streaming,” says Loud & Clear’s homepage. “This site aims to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process.” Spotify also claims that they want artists to have the opportunity to “make a living from their work,” while committing to “keep pushing to grow the industry.”
The site also explains Spotify’s “streamshare” system, which is calculated by “adding up how many times music…was streamed and dividing it by the total number of streams in that market.”
The UMAW responded to the news last Thursday tweeting that they were “pleased” Spotify recognized the artists who are “demanding” better pay and treatment. “However, Spotify has failed to meet any of our demands,” they said. “The company consistently deflects blame onto others for systems it has itself built, and from which it has created its nearly $70 billion valuation.”
“We asked for transparency,” the UMAW said. “But [Loud & Clear] answers none of our questions about the sources of Spotify’s income in addition to subscriptions and ads, payola schemes for playlist and algorithm prioritization, or the terms of their contracts with major labels.”
They also accused Spotify of attempting to “lower” songwriters royalty rates– one of their major points during the worldwide protests on March 15. According to the UMAW, it is calculated that artists are only paid $0.0038 per steam, which they say needs to be “at least one penny per stream.”
Spotify attempts to tackle this claim on Loud & Clear, but they fail to clearly state what artists are paid per stream. Instead, they claim that their “‘per stream rate’ appear[s] lower” because “fans do not pay per song and services do not pay per stream.” Adding that they “don’t believe a ‘per stream rate’ is a meaningful number to analyze.”
Spotify has not yet responded to an IINAG request for clarification. But Loud & Clear claims that this “model drives more fan engagement and generates revenue from more places,” meaning “larger total checks from Spotify to rights holders.”
They also report that roughly two-thirds of the money collected from subscribers and advertisers– their “primary” sources of income, according to the company– is paid out to music rights holders. A number that was over $5 billion, according to Spotify.
Spotify, and other streaming companies, have been under increased scrutiny since live shows were forced to halt because of the COVID-19 pandemic, cutting off small act’s main source of income.