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Amazon started cutting jobs in the company’s music division this week, according to Reuters.
“We have been closely monitoring our organizational needs and prioritizing what matters most to customers and the long-term health of our businesses,” an Amazon spokesperson told Billboard in a statement. “Some roles have been eliminated on the Amazon Music team. We will continue to invest in Amazon Music, and spend our resources on the products and services that matter most to customers, creators, and artists.”
The rep did not provide any information on the extent of the cuts.
The latest wave of cuts adds to a brutal period for tech — and a rough one for the music industry. In the last 18-ish months, the tech behemoths, from Google to Meta to X (formerly Twitter) to Microsoft, have all laid off tens of thousands of workers.
Amazon has also gone through waves of big cuts already, first eliminating 18,000 jobs, and then cutting another 9,000. “The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole,” Amazon CEO Andy Jassy told employees in March.
In July, the site layoffs.fyi, which tracks the tech industry, estimated that more than 386,000 tech workers had been fired around the world since the beginning of 2022.
In music, Downtown Music Holdings, Warner Music Group, Spotify, Motown Records, Soundcloud, BMI, and more have laid off employees. (Downtown and SoundCloud have both done two rounds of cuts.) The language music executives have used in their layoff announcements has echoed messages from the tech world, often relying on buzzwords — think “efficiency” and “evolution” — and emphasizing the importance of “future success” as if that suddenly became an organizational priority.
It’s widely believed around the music industry that there are more layoffs to come.
Starting Wednesday (Nov. 8), Spotify subscribers in the United States can effortless transition from Britney Spears’ music to her recently released audiobiography, The Woman in Me, thanks to the launch of its previously announced offering of 15 hours of free audiobook streaming per month in Spotify Premium.
The Spotify Premium audiobook catalog includes more than 200,000 titles, over 70% of them bestselling titles from all five major book publishers (Hachette, HarperCollins Publishers, Macmillan, Penguin Random House, Simon & Schuster and RB Media) as well as independent publishers such as Bolinda, Dreamscape and Pushkin. Although Spotify has offered audiobooks since Sept. 2022, the user experience has been less than optimal. Users could listen to audiobooks in the Spotify app but, because Spotify wants to avoid costly in-app fees, users must purchase titles at its website.
Spotify announced its audiobook strategy on Oct. 3 and initially gave access to the company’s audiobook catalog only to subscribers in the United Kingdom and Australia. Rolling out audiobook streaming in its largest market will allow Spotify to better capture the expected benefits of offering free listening to a segment of its 226 million subscribers. “This greatly improves our offering, which will increase engagement on Spotify, which will then, of course, reduce churn,” explained CEO Daniel Ek at an Oct. 3 event.
Listeners who exceed the 15-hour monthly allotment can purchase additional listening time. In the early days of the audiobook offering in the United Kingdom and Australia, Spotify has “already seen consumers doing that in ways we probably wouldn’t have imagined, where some consumers are heavily upgrading and being really heavy audiobook listeners [from] day one,” Ek said during the company’s Oct. 24 earnings call.
To help listeners find audiobooks, Spotify offers an audiobook button on the search page and offers an editorially curated selection of popular titles at its audiobooks hub. Listeners can search by category — such as mystery & thriller or self-help — and scroll through lists such as “From book to screen” and “As seen on social media.”
The impetus for audiobook streaming harkens back to Spotify’s origins as a friction-less substitute for digital piracy that had decimated record label revenues by the time Spotify was founded in 2006. “We looked at the world and we thought the only way to beat piracy was to offer a much better experience,” said Ek during the Oct. 3 event. In 2018, Spotify applied the lessons it learned in music to a new format, podcasts, and, Ek claimed, added more than 100 million to podcast listeners to the ecosystem. “This created a win-win,” he explained. “The more people listened to podcasts, the more music grew. And the more people listened to music, the more podcasting grew as well.”
Now, Spotify sees audiobooks as the next opportunity to revitalize an underserved ecosystem with a single dominant player — Amazon-owned Audible in this case. “And just like in music and podcasting,” said Ek, “we’re really excited to be able to bring all the amazing tools that we built for creators and consumers alike to enable more discovery of these amazing audiobooks to the world.”
Most tracks on Spotify will not be eligible to receive royalties based on the company’s proposed royalty scheme that will go into effect in 2024. That’s because a track must reach a threshold of 1,000 streams within 12 months to receive royalty payouts, according to an article this week written by Kristin Graziani, president of music distributor Stem. A source with knowledge of the plan confirmed the details to Billboard.
According to Spotify’s Loud & Clear website, 37.5 million tracks had surpassed 1,000 all-time streams as of 2022. That’s out of a catalog of 100 million tracks at the end of 2022, per Spotify’s 2022 annual report. In other words, almost two-thirds of Spotify’s catalog has never reached the 12-month minimum stream count to be eligible to receive royalties. Given that’s all-time streams since the company launched in 2008, it stands to reason that fewer yet will reach 1,000 streams within a 12-month period.
While this 1,000-stream threshold affects a large number of tracks, it doesn’t impact much of Spotify’s royalties to creators and rights holders. Implementing the threshold will shift about 0.5% of Spotify’s royalty pool to more popular tracks, a source tells Billboard. That was equal to about $46 million in royalties in 2022, based on Spotify’s $9.27 billion cost of sales that year, which represents virtually all royalty payouts.
Tackling fraudulent streams could have a larger impact than a minimum threshold. Spotify’s new royalty scheme also imposes financial penalties for music distributors and labels when fraudulent activity has been detected on tracks they uploaded. That should incentivize distributors to locate and remove fraudulent tracks before they can get to streaming platforms.
Various estimates put fraudulent tracks’ share of listening — at Spotify and elsewhere — at 3% to 10% of total streams. With the 2022 global streaming market valued at $17.5 billion, according to the IFPI, up to $1 billion worth of streaming royalties globally is ending up in the wrong hands. Removing those fraudulent streams from eligibility means all other tracks will receive a greater share of the royalty pool.
French music company Believe would get a “significant double-digit” percentage growth in its market share at Deezer under the company’s new artist-centric royalty scheme, Believe CEO Denis Ladegaillerie said during the company’s Oct. 24 earnings call. The bulk of that impact comes from fighting streaming fraud and abuse, said Ladegaillerie, adding that Deezer has a “much higher” level of streaming fraud and abuse than Spotify and Apple Music. In contrast, he added, changing how royalties are allocated to artists would impact an “extremely marginal” amount of royalties.
A cleaner, easier way to improve all artists’ royalties — one resisted by streaming services until recently — is to raise subscription prices. Every time a streaming service raises fees by 10% — such as Spotify going from $9.99 to $10.99 per month in the U.S. in July — the royalties earned from those subscribers increase a commensurate amount. Deezer has raised its price twice in less than two years. Amazon Music, Apple Music and YouTube Music have also raised prices in the last year.
In the TikTok era, homemade remixes of songs — typically single tracks that have been sped up or slowed down, or two tracks mashed together — have become ever more popular. Increasingly, they are driving viral trends on the platform and garnering streams off of it.
Just how popular? In April, Larry Mills, senior vp of sales at the digital rights tech company Pex, wrote that Pex’s tech found “hundreds of millions of modified audio tracks distributed from July 2021 to March 2023,” which appeared on TikTok, SoundCloud, Audiomack, YouTube, Instagram and more.
On Wednesday (Nov. 1), Mills shared the results of a new Pex analysis — expanded to include streaming services like Spotify, Apple Music, Deezer, and Tidal — estimating that “at least 1% of all songs on [streaming platforms] are modified audio.”
“We’re talking more than 1 million unlicensed, manipulated songs that are diverting revenue away from rightsholders this very minute,” Mills wrote, pointing to homemade re-works of tracks by Halsey or One Republic that have amassed millions of plays. “These can generate millions in cumulative revenue for the uploaders instead of the correct rightsholders.”
Labels try to execute a tricky balancing act with user-generated remixes. They usually strike down the most popular unauthorized reworks on streaming services and move to release their own official versions in an attempt to pull those plays in-house. But they also find ways to encourage fan remixing, because it remains an effective form of music marketing at a time when most promotional strategies have proved toothless. “Rights holders understand that this process is inevitable, and it’s one of the best ways to bring new life to tracks,” Meng Ru Kuok, CEO of music technology company BandLab, said to Billboard earlier this year.
Mills argues that the industry needs a better system for tracking user-generated remixes and making sure royalties are going into the right pockets. “While these hyper-speed remixes may make songs go viral,” he wrote in April, “they’re also capable of diverting royalty payments away from rights holders and into the hands of other creators.”
Since Pex sells technology for identifying all this modified audio, it’s not exactly an unbiased party. But it’s notable that streaming services and distributors don’t have the best track record when it comes to keeping unauthorized content of any kind off their platforms.
It hasn’t been unusual to find leaked songs — especially from rappers with impassioned fan bases like Playboi Carti and Lil Uzi Vert — on Spotify, where leaked tracks can often be found climbing the viral chart, or TikTok. An unreleased Pink Pantheress song sampling Michael Jackson’s classic “Off the Wall” is currently hiding in plain sight on Spotify, masquerading as a podcast.
“Historically, streaming services don’t have an economic incentive to actually care about that,” Deezer CEO Jeronimo Folgueira told Billboard earlier this year. “We don’t care whether you listen to the original Drake, fake Drake, or a recording of the rain. We just want you to pay $10.99.” Folgueira called that incentive structure “actually a bad thing for the industry.”
In addition, many of the distribution companies that act as middlemen between artists and labels and the streaming services operate on a volume model — the more content they upload, the more money they make — which means it’s not in their financial interest to look closely at what they send along to streaming services.
However, the drive to improve this system has taken on new urgency this year. Rights holders and streaming services are going back and forth over how streaming payments should work and whether “an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof,” as Warner Music Group CEO Robert Kyncl told financial analysts in May. As the industry starts to move to a system where all streams are no longer created equal, it becomes increasingly important to know exactly what’s on these platforms so it can sort different streams into different buckets.
In addition, the advance of artificial intelligence-driven technology has allowed for easily accessible and accurate-sounding voice-cloning, which has alarmed some executives and artists in a way that sped-up remixes have not. “In our conversations with the labels, we heard that some artists are really pissed about this stuff,” says Geraldo Ramos, co-founder/CEO of the music-tech company Moises. “They’re calling their label to say, ‘Hey, it isn’t acceptable, my voice is everywhere.’”
This presents new challenges, but also perhaps means new opportunities for digital fingerprint technology companies, whether that’s stalwarts like Audible Magic or newer players like Pex. “With AI, just think how much the creation of derivative works is going to exponentially grow — how many covers are going to get created, how many remixes are gonna get created,” Audible Magic CEO Kuni Takahashi told Billboard this summer. “The scale of what we’re trying to identify and the pace of change is going to keep getting faster.”
Jung Kook’s solo career is breaking records. The BTS superstar’s “Seven” featuring Latto became the fastest song to reach 1 billion streams in Spotify history, the streaming platform announced on Monday (Oct. 30). Explore See latest videos, charts and news See latest videos, charts and news It’s been 108 days since the song was first released, […]
As part of our continuing efforts to serve the music industry and its creators, Billboard now features a royalty calculator for Spotify and Apple Music for readers. Explore Explore See latest videos, charts and news See latest videos, charts and news Created by Manatt, Phelps & Phillips, a legal and consulting firm that specializes in […]
As part of our continuing efforts to serve the music industry and its creators, Billboard now features a royalty calculator for Spotify and Apple Music for readers. The calculator below was created by Manatt, Phelps & Phillips, a legal and consulting firm that specializes in music industry law; and is based on the firm’s analysis […]
Taylor Swift has done it again. The pop star’s re-recorded 1989 album has made Spotify history in its first 24 hours of release. Spotify announced on Saturday (Oct. 28) that 1989 (Taylor’s Version), Swift’s 21-track album that arrived on Friday, is officially the most-streamed album in a single day in the streaming service’s history. But […]
On Tuesday (Oct. 24), Iñigo Quintero’s “Si No Estás” garnered more than 5.7 million plays in just one day, an impressive amount that pushed it to the top of Spotify‘s global chart. It’s the first time a solo Spanish artist has achieved this milestone (previously Canary Islander Quevedo accomplished the feat alongside Argentina’s Bizarrap with “Bzrp Music Sessions, Vol. 52”), and it’s all the more shocking because, at least outside of Spain, Quintero was until recently a total unknown.
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See latest videos, charts and news
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The song also reached the coveted top 10 on Billboard‘s global charts, peaking at No. 4 on Billboard Global Excl. U.S. and No. 10 on Billboard Global 200. And with daily plays surpassing such popular tracks as Miley Cyrus’ “Flowers,” Taylor Swift’s “Cruel Summer” or Young Miko’s “Wiggy,” the meteoric rise is also enigmatic in that it has occurred without any traditional promotion, publicity, press releases or information about the artist behind the sensation. (Billboard Español requested an interview with Quintero’s representative and the response was that he is not currently talking to the company).
With verses like “Esto es una alucinación/ Quiero ver tu otra mitad/ Alejarme de esta ciudad/ Y contagiarme de tu forma de pensar” (“This is a delusion/ I want to see your other half/ Get away from this city/ And immerse in your way of thinking.”) “Si No Estás” is a piano-pop ballad that alludes to an intense obsession and longing for someone who is far away, and the anguish and pain that result from that separation — a song of unusual depth for a 2023 pop hit.
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“Clearly, Iñigo’s songs are connecting with the people,” says Esteve Lombarte, founder of the Acqustic label, who represents the artist. “I think for a long time we’ve had more superficial songs focused on lives of great luxury — of cars, wealth and houses — and nowadays, there are a lot more connecting with day-to-day problems that talk about love, friendship and other issues related to people’s concerns.”
What is certain is the power of the song and its meaning, which has generated a great deal of debate on social networks. “Si No Estás” has been interpreted in different ways, from a song dedicated to God, to a reflection on a romantic breakup.
Lombarte explains that the song began to go viral organically through TikTok, and immediately connected with listeners. “From that initial boost we decided to amplify [the song],” he says. Quintero connected with the label through his other artist Besmaya, and in March 2023 they signed him.
“The truth is that the success of ‘Si No Estás’ is an unprecedented triumph in the industry, but we believe that what is behind this song is a very talented artist,” Lombarte points out. “And the rest of the songs are really doing very well too. The proof of that is that ‘Sobredosis’ is already in the top 100 in Spain, and there will be more and more songs, and we will get to know more of the artist little by little.”
He continues: “The clearest proof is that countries like France, Germany, Holland, Luxembourg, Switzerland — non-Spanish-speaking countries — have also connected with the artist beyond the lyrics. It is part of the magic of this art.”
Other projects that Aqcustic manages are Malmö 040, Besmaya, Ciao Marina, Maren, Yarea, Inazio and Hey Kid. “After this great success, what we will do is to continue working and preparing songs. The important thing is to sit down, compose and work to release music that connect as well as ‘Si No Estás’ has connected,” adds Lombarte.
Additional reporting by Franchesca Guim.
Spotify is planning to implement changes to its streaming royalty model in early 2024 that would affect the lowest-streaming acts, non-music noise tracks and distributors and labels committing fraud, sources tell Billboard.
Conversations have been going on for weeks with the major record labels, Universal Music Group, Sony Music Entertainment and Warner Music Group, as well as independent labels and distributors, sources say. While the new royalty system will keep its existing pro-rata model, it introduces new floors that will grow the pool for more established artists and rights holders.
The changes to Spotify’s royalty model, which were first reported by Music Business Worldwide, include:
A new threshold of minimum annual streams that a track must meet before it starts to generate royalties. The threshold, according to MBW, will de-monetize tracks that had previously received 0.5% of Spotify’s royalty pool.
Financial penalties for music distributors and labels when fraudulent activity on tracks they have uploaded to Spotify has been detected.
A minimum play-time length that non-music noise tracks, such as bird sounds or white noise, must reach to generate royalties.
The specific benchmarks of these changes and how financial penalties will be calculated or implemented are currently unclear.
Spotify will need new agreements to the royalty structure changes with most record labels and distributors to implement the plan, but that doesn’t mean entirely new licensing renewals. Changes can be made specifically for these elements, sources say. And since the major labels — which all negotiate their deal renewals with Spotify on different timelines — are likely to benefit from the new terms, they are all likely to sign onto them.
When reached for comment, a Spotify spokesperson said in a statement, “We’re always evaluating how we can best serve artists, and regularly discuss with partners ways to further platform integrity. We do not have any news to share at this time.”
The standard, existing pro-rata streaming model has been a major topic of consideration this year, ever since Universal Music Group CEO Lucian Grainge called for an “updated model” for the business that will be “an innovative, ‘artist-centric’ model that values all subscribers and rewards the music they love” in his annual New Year’s letter to staff. Following, UMG announced partnerships with Tidal, Deezer and Soundcloud to explore alternative models, and reports surfaced that similar conversations were underway with the other leading streaming platforms.
In July, during UMG’s second quarter earnings call, Grainge announced a “newly expanded agreement” with Spotify, under which he said “they have committed to continue to work to address” what he outlined as key components to the “artist-centric” approach: Fairly rewarding “real artists with real fanbases” for “the platform engagement they drive”; applying “stricter fraud detection and enforcement systems” and “ensuring real artists don’t have their royalties diluted by noise”; and “better aligning the relationship between artists and fans by promoting greater discovery and promotion of real artists.” Two out of three of these priorities are now being pursued by Spotify.
In September, UMG and Deezer outlined a new model for what they called “artist-centric streaming.” That model was similar, albeit more severe, than what Spotify is planning. It included royalty “boosts” for “professional” artists whose music streamed above a threshold, while promising to crack down on fraud and replace “non-artist noise content” with its own functional music that would be excluded from the royalty pool.
Unlike Spotify — which relies heavily on industry-leading algorithm-recommended playlists and auto-play, lean-back listening — Deezer’s plan also demoted passive listening royalties by “boosting” artists who are actively searched for by users. Unlike Deezer, Spotify is planning to roll this out will all major labels and leading independent labels and distributors.