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Spotify responds to artists’ protest: “We’ve already paid $500m to rightsholders”



Online music streaming service Spotify has responded to criticism it doesn't do enough to support new artists, pointing out that it has paid out $500m in royalties so far and is on track to pay out $1bn by the end of 2013.

Yesterday, British musicians Thom Yorke and Nigel Godrich (best-known for their work with Radiohead, as frontman and producer respectively) announced that they'd pulled their albums from Spotify to protest what they say is an unworkable model for new and emerging artists.

Yorke’s solo album The Eraser and Atoms for Peace’s debut album Amok, which features both Yorke and Godrich, are also not currently available on rival music streaming services Rdio and Deezer. All three albums in question – The Eraser, Amok and the self-titled debut from Godrich's other band Ultraista – are still available on Grooveshark.

The core of the criticism is that Spotify's model rewards artists based on the share of overall streaming they command, which tends to favour established artists and major labels. "Streaming suits catalogue but cannot work as a way of supporting new artists' work," Godrich tweeted. "Spotify and the like either have to address that fact and change the model for new releases or else all new music producers should be bold and vote with their feet. They have no power without new music."

In a statement released today, Spotify said:

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 necessary to invest in new talent and music. We want to help artists connect with their fans, find new audiences, grow their fan base and make a living from the music we all love. 

"Right now we're still in the early stages of a long-term project that's already having a hugely positive effect on artists and new music. We've already paid US$500m to rightsholders so far and by the end of 2013 this number will reach US$1bn. Much of this money is being invested in nurturing new talent and producing great new music.

"We're 100 per cent 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."

That doesn't directly address the criticism that the current model favours established artists. To be fair, not all new artists take issue with the service – Swedish duo Cazzette recently became the first band to release an album debut exclusively on Spotify, calling streaming the "future" of music.

Spotify currently claims 24 million active users and six million paying subscribers, who each pay about $10 per month for unlimited streaming and no ads. It reported a loss of nearly $60m on revenue of $244m in 2011 and is expected by some commentators to reach $1bn in revenue in 2013.

Image credit: flickr user BeauGiles 


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