But with the enthusiasm of dedicated fans comes a lot of salt. Underground artists and seemingly well-informed individuals take to their favourite platforms to hate on the company, the free marketing they garner, and their infamous payout policy. Furthermore, Spotify’s founder, Daniel Ek stands in criticism for his business ventures aside from Spotify.

And I don't want to negate the fact that the concerns are important and should be addressed properly. I see no sense in cynical bashing and meme-ing of the topic though. I’d rather have people educated and offered alternatives. This is true for a fraction of the posts, but the majority are full of spite, negativity and hate.

If you have been around the industry for several years, this isn’t your first rodeo, and you may be immune to the hatred spread around your circle. Maybe your circle doesn’t care about the topic at all.

One has to realize that music buyers in the dance music industry are mostly composed of DJs, at least 75% of the time. But one thing is for sure; most artists don’t want people to listen to their music strictly in clubs. In fact, a lot of self-proclaimed underground labels and artists use marketing strategies designed for commercial success. How’s that underground? For a thing to be underground, it has to be a secret, not publicly available, hidden. This bears the question of who you want to reach with your music.

I’d argue that all artists strive for widely acclaimed success. But widely acclaimed success doesn’t live on Bandcamp or similar ventures. It lives on gigantic platforms like Spotify because everyone else is there. Be it artists, fans, labels, podcasters.

And why is that? Because convenience is king! Preferably, people want ALL of their music and podcasts in one spot. I don’t want 5+ platforms to listen to my music as well. Getting an endless music library at your fingertips for less than 15 pounds is a nearly unbeatable deal too.

Something that can be misunderstood is that Spotify pays an artist 0,0033 per stream. This number is simply a hypothetical oversimplification. The actual payout process is a little bit more complex. The streaming giant doesn’t pay per stream nor artists directly but the rightsholders, which is broadly explained via their Loud & Clear portal. Additionally, our colleagues from the DK Music Business Academy gave a detailed explanation of Spotify’s royalties.

These rights holders then split the revenue into different departments like distribution, artwork and promotion costs and pay artists out afterwards. This breaks the extremely popular misconception that Spotify is paying major artists directly. This doesn’t negate that Spotify is one of the platforms where artists earn less than elsewhere. It more so shifts the focus away from the streaming company.

Another thing worth noting is their new payout policy announced on November 21st. They explain it as follows. Due to the minimum withdrawal thresholds set by labels and distributors (typically $2-$50 per withdrawal) and transaction fees imposed by banks (usually $1-$20 per withdrawal), the earnings often fail to reach the uploaders. Consequently, these small payments are frequently overlooked.

However, when considered collectively, these overlooked payments accumulate to $40 million annually. Redirecting this sum could significantly bolster payments to artists who rely heavily on streaming revenue. Starting with 2024, Spotify wants to battle this by setting a threshold of a minimum of 1.000 streams to generate recorded royalties.

But for a lot of smaller artists that means they won’t earn anything through Spotify because they can’t make the threshold. Another move by Spotify recently was laying off 1.500 staff people to cut costs. This bears the question of what kind of costs they have that justify massive layoffs like these. Especially if you consider they raised the price of their premium subscription model.

One thing to think about is the massive marketing benefits platforms like Bandcamp and Spotify get by pulling stunts like Bandcamp Friday and Spotify Wrapped. It's free exposure. Components did extensive research on Bandcamp by the way. It's extremely informative and highlights facts such as when people buy the most on Bandcamp. Spoilers, it's on Bandcamp Friday.

Be it artists themselves, label managers, or promoters, it’s worth highlighting that the average listener consumes music differently than most industry professionals. Still, I’ve asked my Instagram followers, Facebook friends and the Rendah discord how they consume music. Please note that this viewpoint is still biased as these people are often music industry professionals as well. This may result in your favourite service not being displayed simply because it doesn’t get much use in my bubble. My research was also more about buying and streaming music. That’s why platforms like Patreon or Buy Me A Coffee probably ended up in the Other category.

I love the fact that Spotify made third place in this pie chart below Soundcloud as undisputed number one and Bandcamp. It's important to recognize that the average streamer probably isn't educated enough to be aware of the latter. Often, people advocate for services like Tidal due to high-resolution streaming being available there. Tidal was an option to vote for and hasn't been voted. Is this a Hifi music nerd problem then?

It’s a double-edged sword to want your sound to feel underground but to reach a wider audience. Change only happens through true boycott and that is an insanely difficult task to accomplish. Artists and labels can always opt out of appearing on Spotify though. Repercussions from pulling your music from Spotify are a different topic.

You don’t have to play the game. But please, be polite whilst doing so. I can imagine it’s psychologically taxing when posting your Spotify Wrapped for Artists or your personal Wrapped stats is considered an atrocity by your peers and colleagues. We don’t win by separating each other over using an app. We criticize Spotify via our Apple and Google-driven products via platforms brought to you by Meta.