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Unpublished Paper
Saving the Spotify Revolution: Recalibrating the Power Imbalance in Digital Copyright
ExpressO (2012)
  • Jordan Teague
Abstract

Many believed that Spotify would revolutionize the music industry, offering a legal alternative to file sharing that compensates musicians for use of their digital music. Why, then, have artists been abandoning the Spotify revolution in droves? Because the revolution has a dark side. Since Spotify is part-owned by the major labels, it has a serious conflict of interest with independent artists. Spotify’s lack of transparency about its financial flows gives musicians further reason to suspect whether the service has their interests in mind, particularly in light of the microscopic royalties that Spotify has paid out to artists to date. This climate of suspicion has caused many artists to abandon the service and pursue alternative means of digital distribution and promotion. Even listeners have begun leaving Spotify on account of how it treats artists. Ironically, Spotify has managed to alienate the very audiences that it needs as allies: artists, who supply Spotify’s “unlimited” song library, and listeners, who fund the service through subscriptions and advertising. As such, the Spotify revolution is destined to fail—an unfortunate reality, as the streaming music business model has great potential to benefit artists and serve the underlying goals of copyright.

I argue that the most effective way to save the Spotify revolution is through a compulsory licensing scheme. This is because the primary impediment to Spotify changing its treatment of artists is its insulation from competitive pressures, which ultimately stems from the major labels’ formidable bargaining position in digital sound recordings. The labels have assumed a gatekeeping function in streaming music, demanding corporate equity in exchange for access to their sound recordings, which every streaming service needs in order to build a comprehensive catalog. As a result, the streaming music market has very few participants, all of which are partially controlled by the major labels. Compulsory licensing would make the major labels’ sound recordings more readily accessible to would-be streaming services. A more competitive marketplace will lead to greater transparency and fairer treatment of artists—and will ultimately enable the Spotify revolution to succeed.

Keywords
  • spotify,
  • digital music,
  • copyright,
  • digital copyright,
  • music,
  • streaming music,
  • music streaming
Disciplines
Publication Date
February 22, 2012
Citation Information
Jordan Teague. "Saving the Spotify Revolution: Recalibrating the Power Imbalance in Digital Copyright" ExpressO (2012)
Available at: http://works.bepress.com/jordan_teague/1/