After YouTube’s Indie Label Catastrophe, Why Did Spotify Let Google Buy Its Way Onto Their Board of Directors?

You’ve all been following YouTube’s absolutely tone deaf “take it or leave it” brinksmanship strategy with indie labels represented by Merlin and WIN.  This one sided “negotiation” appears to still be grinding on.  Why would it take so long?  Why wouldn’t YouTube simply say, we’ll treat you like everyone else and close up the problem.

So what is Google’s next move to calm the waters?  Google buys its way onto the Spotify board and the Spotify board allowed them to do it.

If we ever needed proof that Spotify intends to keep screwing artists and songwriters, we just got that confirmation.  Without so much as blinking an eye, Spotify embraces Google like a long lost brother returning to the family.  Whether this is just the first step toward Google buying Spotify or a step toward a “powered by Spotify” Google music service will be told in the future.

But what we definitely know is that two companies have joined together to pursue their common goal of paying minuscule royalties to songwriters and artists.

By welcoming Google onto its board, Spotify has lost the last shred of a fig leaf for screwing artists and songwriters.  With Spotify, you just get reamed because the deals are awful and you’ll never participate in any of the stock that Spotify gave to major labels and their senior executives (and probably some select superstars).   These under the table advances and equity shares in exchange for lower royalties are so bad that even the U.S. Copyright Office has raised it as a concern!

But with Google you get reamed because the royalty rates are absurdly miniscule when paid by Google’s legitimate front businesses like YouTube and are actually negative when you take into account the pirate sites Google profits from through its unscrupulous AdSense business.

Doesn’t Spotify have enough artist relations problems without adding Google to the list?

Not if Google writes a big enough check!  There’s a couple ways that Google could invest in Spotify.  They could buy newly issued shares (probably in a new series of preferred stock) OR…Google could buy existing shares from existing stockholders.  For example, if you were an executive of a major label who had gotten Spotify stock and you were thinking of “pulling a Jimmy” and getting some island money, one way you could do it would be to sell your shares to Google (sometimes called a “selling stockholder”).

But whatever happened, Spotify has now embraced the pariah of the music business.  Google is on their board, votes on everything the board votes on, including royalty rates, under the table money, the works.

Not only that, but why would Google allow Spotify to renew their deals through the Harry Fox Agency when Google owns Rightsflow?

If Spotify had artist and writer relations problems before, that’s nothing compared to what they’re going to have.

2 thoughts on “After YouTube’s Indie Label Catastrophe, Why Did Spotify Let Google Buy Its Way Onto Their Board of Directors?

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