Spotify: Tipping the Scales?

Spotify: that one inevitable application which has found its way to millions of smartphones and other entertainment catering machines. Over the course of last few years, the Swedish company has outgrown its competitors, largely because of its offering of free streaming and user-friendly interface. The music industry since then has seen numerous changes, which we have talked about in our articles now and then. The European brand continues to flourish, however not altering what seems to be a major flaw in it: royalty payout rate.

In his latest interview with Music Ally, Spotify’s CEO Daniel Ek made his remarks about various plans on how the company approaches to advance on its already staggering financial growth, including his thoughts about the dissent by many artists on the royalty rate. Commenting “You can’t record music once every three to four years and think that’s going to be enough”, he emphasized that the secret to success for musicians was more output.

We can agree to this specific statement to certain amounts, as the scene has become much more competitive and fast-paced. At the same time, it has led to upturn the “quality over quantity” principle, with many Dance music acts having a constant release schedule to gain more profits from the streams. For those who might not know, Spotify gives an estimate of $0.00437 per stream, subjective to factors such as listener’s location, subscription and the relative pricing and currency of the service in different regions. Also interesting note is the fact that brands such as Napster, Tidal and Google music provide higher rates than the mentioned conglomerate, raising the question of whether its high time for Spotify to increase their payout, especially in the current economic decline that has taken place hindering creators abruptly.

What do you think about this business strategy? Let us know in the comments!