Music Business

Spotify, CEO Ek Respond To Thom Yorke & Nigel Godrich’s Noisey Streaming Exit

Daniel Ek(UPDATED) "So far I've not seen any cannibalisation," Spotify CEO Daniel EK tweeted this morning in response the noisey exit of Atoms for Peace  -  the band anchored by Thom Yorke, Nigel Godrich and Flea – from Spotify and other streaming music services, "So question should be – Why shouldn't you do streaming? Spotify also released an official statement:

"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 which we all love,” 

“Right now we’re still in the first stages of a long-term project that’s already having a hugely positive effect on artists and new music. We’ve already paid $500m to rightsholders so far and by the end of 2013 this number will reach $1bn. Much of this money is being invested in nurturing new talent and producing new great music. We’re 100% 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.”

More: Thom Yorke, Nigel Godrich Exit Spotify In Protest: "New artists get paid fuck all."

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  1. How much of the “$500m to rightsholders” is royalties and how much is share dividends to the majors which are major shareholders in Spotify?
    Both could be considered rightsholders, but if it’s dividends then smaller labels and artists are completely excluded from the pot…

  2. A fair question. However in Scandinavia a massive amount has been paid to rightholders and artists, and there should no reason this should not happen in other countries too, when other countries get as good broadband incl 3G/4G as in Scandinavia.
    And Ek is right. If theres no cannibalization, Spotify income no matter how small or big, is “on top”…

  3. I’m a fan of Spotify and streaming – and I see it’s long term income potential. But to say there is no cannibalization, just does not ring true. I know that I buy fewer CD/downloads than before Spotify. If I only want to listen occasionally and have no deep attachment to the artist, why buy, when I can rent?

  4. 500mills? I guess I will ask all my artist friends with 15 years selling records if they recieve ANY income from this way of renting tunes in the last 5 years since Spit-tify came to decapitate europe record industroyed.How much of that goes off the Mayors? New Music is far away from your concerns Mr Daniel.

  5. Thanks for the reply James.
    I hear about Scandinavian artists doing really well from Spotify all the time, which is great, and it could well be because such a huge percentage of their population subscribes.
    The problem is then – why are these success stories not happening for artists in the UK or US? Are the deals with the majors to blame? Do they only apply to the biggest markets?
    Also, I can’t believe that there is no cannibalisation. My friends that subscribe to Spotify have pretty much stopped buying downloads, and they stopped buying physical music a while ago. I know that is anecdotal, but I can;t believe they are the only ones.

  6. Internet access and speed is way better in scandinavia than rest of the world. So I suspect its more hassle-free than in something like the US.
    How much did your friend spend before? Most people I know never did buy anything on iTunes. Maybe 1-2 singles a month. Now alot pay the full amount or use the freemium version.

  7. Oh come on, it sounds like each side is trying to make the most money out of the deal and it makes sense! I hope not a lot of artists will follow suit. Even though I guess I don’t really care because I use Torch Music and since it uses Youtube videos, they’re uploaded by the artists anyway.

  8. Naaa you cant be sure of that. Most such services uses lyricvideos and they’re all (99%) uploaded illegally. For the other part, you’re right

  9. Yeah but I read somewhere that Youtube gives the artists the option to approve videos and remove videos that they don’t approve of. Also, Torch Music uses mostly official videos, so those are definitely approved by the artists.

  10. CDs may be a thing of the past but they still sound better than any streaming I’ve yet heard, so I’m still buying them. And thanks to so many leaping onto the current streaming bandwagon, they’re now quite inexpensive.
    I like Spotify well enough as a service but if the artists are not paid a fair share of sales they’ll stop making music or they’ll stop letting Spotify have their music. It’s already happening. There is no future in Spotify or companies like them until this changes, and it had better change fast if they know what’s good for them because the anger is building.

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