Spotify is taking another step today that may make record labels uncomfortable. Following recent reports that the streaming service is terminating its own licensing agreements with independent artists, the company announced this morning that it will now also allow independent artists to directly upload their music to its service.
The download feature is launching today in beta on Spotify for Artists, the online dashboard that arrived publicly last year. This dashboard and its accompanying mobile app allow artists to track metrics surrounding their streams and their fan base demographics.
With the new upload tool, artists will now be able to add their own tracks to the streaming service with just a few clicks.
Spotify explains, artists will upload the music, preview how things will look, then edit the music’s metadata, if needed. They will also be able to choose when these new tracks will be “uploaded” to Spotify. (More new music on Fridays, maybe.)
More importantly, Spotify says artists are paid as usual for their uploaded music – royalty payments will simply be deposited directly into artists’ bank accounts each month.
Another new report in the dashboard will detail how much downloaded streams earn and when they can expect to be paid.
The download option is free, and Spotify says it won’t deduct any fees or commissions.
This decision will likely affect labels, which have traditionally acted as gatekeepers between artists and fans. But thanks to digital media platforms, artists have explored new ways to grow their audiences.
For example, on SoundCloud – a service that Spotify once considered acquiring – independent musicians, DJs, bands and other artists have been able to attract followers. Similarly, YouTube has often served as a vehicle of discovery for strangers.
Both services will be impacted by this move, as this is one of the reasons they are used by artists. Now they will be able to direct fanbases directly to their Spotify tracks.
Those who are able to gain fans on their own may be able to circumvent the need for a label and subsequently retain more of their income in the process.
“Artists receive 50% of net revenue from songs they upload, and Spotify also reports to publishers and management companies for additional royalties related to music composition,” said Kene Anoliefo, Senior Product Manager for Music Marketplace. Spotify creators, confirming the payment structure. .
Meanwhile, according to a recent NYT report, artists working with labels may see much lower percentages. The report says Spotify typically pays a record label about 52% of the revenue generated from each stream. The label, in turn, then pays the artist a royalty ranging from 15% to 50%.
If artists deal directly with Spotify, they could make more money.
The labels have suggested they may retaliate against Spotify for overriding. The NYT had also said. They can do things like withhold licenses Spotify needs for key international expansions, like India, or not agree to new terms after existing contracts expire.
They could also offer more exclusives and promotions to Spotify’s competitors, like Apple Music, which has taken the lead in the US and is now neck and neck with Spotify for paid subscribers. (Some reports, as well as Apple CEO Tim Cook, claimed that Apple Music was ahead in North America.)
Spotify has historically played down such concerns to investors, saying it’s creating a two-sided market and that it still licenses music to creators “big and small” and will continue to license music from anyone. owns the rights.
A music download feature also means artists who own their own rights could gain a foothold on Spotify if they catch the eye of playlist publishers, which Spotify is now making it easier for them too.
Additionally, the fact that independents are uploading music directly means that Spotify could better compete with Apple Music by attracting more artists and their fans to its platform.
The download feature is making its invite-only beta debut in the US, Spotify says.
A small handful of independent artists are already on board, including Noname, Michael Brun, VIAA and Hot Shade. They provided Spotify with initial feedback during earlier testing ahead of the beta launch, the company says.
“We started by working with artists who are both deeply committed to our platform – so they use Spotify to
Artists often – and they also often release music,” Anoliefo said, adding that downloading music was one of the most requested features by artists.
“We used the test with them to shape the tool and create a download process that we think is really simple, transparent and flexible. This will allow artists to use the tool to download music through Spotify for artists when they want. There are no barriers or constraints. And they can download as often as they want. And as many times as they want,” she said.
Over the next few months, Spotify will email other artists asking them to try out the feature as well.
Initially, it will open access to a few hundred more, before rolling it out publicly to the more than 200,000 monthly active users of the Spotify for Artists platform.
At launch, music download will be a web-only feature. The company wouldn’t comment on its plans to bring the feature to mobile.