Spotify CEO Reacts to Backlash
A month after Pink Floyd added its catalog to Spotify, Radiohead frontman Thom Yorke announced Sunday that he had pulled several songs from the service.
Yorke--along with Nigel Godrich, Radiohead's longtime producer and a member of Yorke's side project, Atoms for Peace--declared in a flurry of Twitter messages that Spotify is hurting lesser-known artists by paying them too few royalties and focusing on bigger acts. Among the albums Yorke removed are his 2006 solo effort, The Eraser, and Atoms for Peace's debut.
"Make no mistake," Yorke wrote, "New artists you discover on #Spotify will no get paid. Meanwhile shareholders will shortly being rolling in it."
Describing Spotify's business model as "an equation that doesn't work," Godrich noted that "smaller producers and labels get pittance for their comparitively few streams" and this is why back catalogs and new music "cannot be lumped together."
Godrich and Yorke aren't the first artists to voice their disdain for the streaming music service, which has 24 million monthly users around the world, a quarter of whom pay for monthly subscriptions. As Ben Sisario notes in The New York Times, The Black Keys refused to put their most recent album, El Camino, on the service. Meanwhile, other artists are toying with "windowing," i.e., delaying an album's availability on Spotify by several weeks or months after its release on other formats.
For his part, Spotify CEO Daniel Ek argues the service doesn't cannibalize new music sales in a statement released Monday: "Spotify’s goal is to grow a service which people love, ultimately want to pay for, and which will provide the financial support to the music industry."
He added, "We’ve already paid $500 million to rightsholders so far and by the end of 2013 this number will reach $1 billion. We’re 100 percent committed to making Spotify the most artist-friendly music service possible and are constantly talking to artists and managers about how Spotify can help build their careers."
Spotify, which has raised $100 million in venture capital funding, is reportedly valued at around $3 billion, but if major artists continue to rail on the company, it could risk losing its footing in the music world, along with investors' support.
JILL KRASNY | Staff Writer
Jill Krasny is a staff writer for Inc. magazine, where she covers the intersection of entertainment and startups. Prior to Inc., she was a writer for MTV and Esquire and an editor at TheStreet. She is a graduate of the University of Southern California with a degree in communication. She lives in New York City.