Music News

In late May, Spotify CEO Daniel Ek made headlines when he tweeted, “Today, with the cost of creating content being close to zero, people can share an incredible amount of content.”

One person who took offense is deadmau5, who put up an Instagram post over the weekend offering feedback on Ek’s comment. “Incorrect,” the producer’s caption reads. “The cost of creating content was 25+ years of my life and much of those proceeds going to your company you complete f–king idiot.”

The post garnered nearly 38,000 likes and many comments, with one person writing, “We hate Spotify so much,” to which the Canadian electronic producer responded by saying, “feel that, I’m about to pull my catalog from these f–king vultures, enough’s enough.”

As of publishing, the producer’s catalog is still available on Spotify, where he currently boasts nearly 5 million monthly listeners.

“I’ve been saying for a long time that we as the IP owners, the artists, the artist managers and the major record companies have allowed these multibillion-dollar companies to build platforms and companies with our art and our fans, and now we’re locked out,” deadmau5’s manager Dean Wilson tells Billboard in regards to royalty rates on DSPs like Spotify. “We can’t talk to our fans on the platform with our art that we’ve built.

“When you say that out loud, it’s insane that we keep allowing that to happen,” Wilson continues. “They’re our fans that we drive to platforms with our art, and unless we pay [the platforms]…you can’t get to your fans. Or you don’t even know if you’re getting to your fans. It’s like, if you spend this amount of money and move this needle on that, you could get to maybe this amount of people. 

“Then how much data do we get back in return? The bare minimum they can give you. Ask me today, ‘How much am I getting paid per stream on Spotify?’ I don’t know. And that’s our job. How crazy is that, that that’s our business, and if you stream my record for more than 30 seconds today, I can’t tell you what that generated. It’s in this mythical bucket.”

In April, Spotify reported that its first-quarter revenue jumped 20% and gross profit topped 1 billion euros ($1.08 billion), helping return the 18-year-old streaming company to profitability and putting it on track to meet its 2024 growth target.

Earlier this month, the streamer announced that it’s raising prices for the second consecutive year, with its premium individual plan in the U.S. increasing by a dollar to $11.99 a month starting July 1. The platform’s duo plan will also go up by a buck to $16.99 a month while the family plan will be increased by $3 to $19.99 a month.

Despite the price hikes, royalty rates recently went down for songwriters on the platform. By adding audiobooks to premium offerings like individual, duo and family plans, Spotify claims these subscriptions are now “bundles” — a type of plan that qualifies it for a discounted rate on U.S. mechanical royalties given that multiple products are offered under one price. According to Billboard estimates, the change means publishers and writers will earn about $150 million less in royalties over the course of Spotify’s first bundled year.

Since the bundling change was first reported, Spotify has been targeted by the National Music Publishers’ Association (NMPA) on multiple fronts. In May, it was hit with a lawsuit by the Mechanical Licensing Collective over the discounted rate. In response, Spotify has called the NMPA’s accusations “baseless” and “misleading” and argued of the MLC lawsuit that “bundles were a critical component” of the Phono IV agreement struck between publishers and streaming services.