Everyone Is Spotify, Boring Is Everyone
6 min read

Everyone Is Spotify, Boring Is Everyone

Hello, hello, hello, I hope everyone is doing well this week. I wanted to give a quick programming note. There won’t be a proper newsletter on July 4, because of the American holiday. I may round-up stories I liked from this year or if anyone has a better idea just shoot an email to pennyfractions@gmail.com. Otherwise, my only other note is that I tried to keep this week's newsletter a bit shorter because I got wrapped up in some work projects. Next week I'll hopefully return to a healthy rambling length. This is also a good time for new readers to check out Penny Fractions' archive if you haven't, as I do make a number of previous newsletter callbacks this week.

Yesterday music analyst Marc Mulligan wrote a piece called ‘Spotify’s New Rules of Engagement’ that examined the Swedish’s company dominant role within the music industry. Mulligan fixated on the fact that while Spotify is a large percentage of the music industry’s overall revenue (27%), the company holds an outsize space in the imaginations of the industry. My initial nitpick with Mulligan, who I often enjoy reading, is that he didn’t point out the rather obvious reason for Spotify and the music industry’s conjoined at the hip relationship. All three major labels (Sony, Universal, and Warner) along with Merlin representing independent labels invested in Spotify. Even if they didn’t create this system of promotion, playlists, etc; they were all ready to embrace it.

I won't deny the tension between Spotify and major labels, but it’s nothing like the industry’s historic disdain for a platform like YouTube. A few bigger named artists and smaller labels may speak out against Spotify every few months but major labels doubled down. Not without good reason, because those best served by Spotify aren’t small acts with engaged fan bases—try Bandcamp—nope it benefits labels through passive streaming, the endless recycling of back catalog, and with major label deals that offer big advances that most artists through streaming will never see another dime back. Why wouldn’t the music industry’s biggest players love this new world?

YouTube when crafting YouTube Music decided to mercilessly rip-off Spotify in a way that still makes me laugh to quote myself: “Lifting the Spotify aesthetic might have been forgivable if YouTube Music built upon its competition’s feature set, but instead, YouTube brings almost no new ideas to the table. Even YouTube’s curated playlists mimic Spotify: RapCaviar on YouTube is Rap Star Status, Clout Culture becomes Clout Rising, and Viral 50 morphs into Blogged 50.”

I’m glib because YouTube Music’s current offerings show a company unwilling to push new ideas in the music streaming space. I’ve written this endless times, but YouTube Music’s obsession with subscriptions over advertising runs counter to the way YouTube, and Google, make money that I don’t understand how they keep repeating this mistake. For that reason, I almost need to hand it to Lyor Cohen in convincing one of the world’s largest companies to just accept the whims of records labels.

Now Apple despite crafting the iTunes store and effectively transitioning music into the legal digital age isn’t doing much better. Outside of Beats 1, Apple Music just constantly cribs from Spotify’s playlist formatting—a form truthfully isn’t even all that unique to Spotify. Apple does try to do more bigger budget exclusive video projects, but that content rarely makes any waves. Apple and Google aren’t alone in copying boring features: Pandora introduced the ability to play an individual song and Soundcloud started making its own playlists. I want to just throw my hands up as all of the companies keep remaking themselves into a model that may not work for them and just floods the marketplace with me-too services.

I find this oddly frustrating because this is all done under the guise of proving to investors and board members that a company’s playlists or algorithms can control global music consumption. That’s why I still laugh at the dick measuring contest held between Apple and Spotify over the Weeknd’s EP My Dear Melancholy earlier this year.

The Verge reported that Apple Music (26 million streams) outperformed Spotify in the album’s first 24 hours despite holding an American user base of half the size. Spotify snapped back saying the album actually 29 million streams, even though Spotify’s own public data and Republic Records disagreed. Spotify got exclusive videos and promotional material and still didn’t win the content, which could diminish just how important Spotify must be if all of it marketing muscle still couldn’t just beat people opening Apple Music. Your favorite expensive phone provider doesn’t boldly claim to control the lives of music, but Spotify, at least to its investors, needs to appear as it does.

A recent research paper called 'Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists' by Luis Aguiar and Joel Waldfogel investigated just how much playlists factor in the lives of songs on Spotify. The paper’s most interesting findings were in the authors’ attempt to put a monetary number on getting placed within certain playlists. It reaffirms hearing conversations where labels in 2018 know once a song hits a particular playlist or stream threshold they've recouped that initial artist investment. Now of course labels want acts to go beyond that point, but reading the paper made Spotify’s role in the music industry feel oddly small. The company is just radio but labels, not songwriters, are the ones collecting on the checks. So actually maybe that just reaffirms how big it really is for labels that are fully committed to this form.

That’s why I’m a bit harsh on Apple and YouTube because they worked in this space much longer than Spotify but show little motivation to try new ideas. Instead, they follow Spotify’s trial of major label desires, because for them building a playlist team is far easier than completely re-imagining this space. It’s why last year when YouTube Music was still rumored to be called ‘Remix’ I was casually optimistic about its possibilities: “[There] are so many things YouTube could do to make itself dominate from an artist perspective that I'll be disappointed if their new service is just Spotify-lite.” What do you know, I got disappointed.

Until we’re in an augmented reality voice-first music consumption world I’ll keep repeating these complaints. Spotify’s playlist first model isn’t ideal for engaged music listening, but rather is most compelling for passive consumption that is best suited for lining major label pockets. Wouldn’t it be nice if the music industry wasn’t set up to be controlled by catalog holders that crave an endless recurring fee to get access to its content? One can dream.

Why the Music Industry Is Still Rooting For Tidal, Despite Chronic Payment Issues - Billboard

Part of the inspiration of this week’s newsletter was this mindless nonsense of this story. I totally believe the music industry wants more competition and would rather people pay $20 a month rather than $10. However, Billboard don’t take me for a fool and believes that record execs are fine with not getting paid to cause a small niche of users pays a few extra bucks to stream nicer quality songs. I said a couple of weeks back, but I won't be taking my eye off this Tidal story as it unfolds increasingly strange details.

Spotify Uproar Points to the Power of the Playlist - Wall Street Journal

I referenced this paper earlier in the piece, but I wanted to include a link to this Wall Street Journal story on it as well. Though I do want to say I wish the article compared playlist to radio and how much money can be made on radio for songwriters once a song hits Top 40 compared to how much a label makes for a song hitting Today's Top Hits. Just a thought.

Spotify Market Cap Soars Above $30 Billion in Wake of News It’s Directly Licensing Artists - Music Business Worldwide

I just gotta laugh at how desperate investors and potential investors want this Spotify to be Netflix. Lowers voice to a whisper: "Spotify won’t be Netflix, I’m sorry. Go buy some Powerball tickets."

When "disruptors" become the pipes for incumbents. - Water & Music

Cherie Hu’s newsletter is great and can never recommend it enough in her latest she observed the many ways that all the changes within the music industry fundamentally haven’t changed any of the ways the overall structures of the business work. That’s partly what I was even trying to get at with this newsletter. That so much music industry “change” for many players is just re-establishing their power in the marketplace not harming it.

Instagram Reportedly Wants To Be YouTube Now - Gizmodo

This was a short post I did last week about how Instagram is looking to expand into longer-form videos and more professional content. I haven’t used Instagram in months, but as it slowly just morphs into Facebook I’ll admit I can’t wait to see what kind of backlash will eventually hit the app in 2019/2020.

Tech Workers Versus the Pentagon - Jacobin

This is ostensibly a newsletter about music streaming, so I won’t just turn it into a space for labor issues. However that employees within Google were able to essentially get the company to end a potential military contract does my pro-union and anti-management heart good. Obviously no offense to any management reading this week!