Thom Yorke Vs Spotify : Why Doesn’t Spotify Speak Out Against Ad Funded Piracy?

Thom Yorke’s announcement to boycott Spotify is just the latest public acknowledgement that the pay rates and business models of streaming services need to adapt and evolve to pay sustainable rates to artists and rights holders. We’ve previously offered our own point of view on Spotify whereby we believe that current streaming based models are fundamentally flawed at the level of their pay rates and are especially devastating to developing artists.

Both Thom Yorke of Radiohead and Trent Rezenor of Nine Inch Nails were two of the first artists to explore and experiment with potentially new music business models on the internet. However, the realities of those experiments have become apparent this year as Thom Yorke spoke out about Google and Trent Reznor against music streaming services being unfair to artists.

But it’s also important to remember that despite our disagreements over the revenue distribution models of Spotify and Pandora these are legal and licensed services. The primary reason that these streaming businesses even exist is in response to a decade plus of infringing and illegally operating business who pay nothing at all, zero, zilch, nada.

Let’s get really real for one second… One of the primary reasons Spotify pays so little is because so many more pay nothing at all. Google alone is tracking millions and millions of infringement notices to over 200,000 known illegally operating businesses.

For those who unaware, Ad Sponsored Piracy is the mechanism by which illegal and infringing online businesses get paid to display advertising on their sites. These sites do not license any of the music they distribute nor do they share any of this revenue with artists or rights holders. In other words Silicon Valley corporate interests pocket 100% of the money and pay artists nothing.

Simply put, ad supported piracy is the practice whereby ad networks like Google’s Adsense profit by placing ads on pirate sites like www mp3skull com.

Brand $$$-> Ad Agency $$$-> On Line Ad Services $$$-> Ad Exchanges $$$-> Illegal and Infringing Sites Profit from Ad Placements.

Any legally licensed, legitimate internet music business has to acknowledge that mass scale, enterprise level, commercial infringement of music only harms their business. The devaluation of advertising inventory on infringing sites harms both the legitimate businesses ability to grow, and the ability to pay sustainable rates to musicians.

So why doesn’t Spotify join with artists by insisting on better controls and regulation of online advertising? Spotify’s existence alone is not the solution as the payments to artists and rights holders simply do not scale as we have previously pointed out (also note how much less YouTube pays than Spotify – more on this later).

Music Streaming Math, Can It All Add Up?

Maybe we’re missing something. If streaming is the future how does $2.5b in revenue from a massively successful Spotify replace the loss of $8.3b in annual earnings?

Solutions for Artist Rights must include the acknowledgement that the mathematical facts of streaming services is that they are unsustainable at current rates (see chart above). Therefore, there must be regulatory enforcement to protect artists and other creators (authors, filmmakers, etc) from Ad Sponsored Piracy.

We have previous identified over 50 Major Brands Supporting Illegal and Infringing online businesses here:

Over 50 Major Brands Supporting Music Piracy, It’s Big Business!

See more Corporate Advertising Funded Exploitation of Artists:
Tom Waits * Neil Young * Aimee Mann * Neko Case * U2 * Ben Gibbard/Death Cab For Cutie * East Bay Ray / Dead Kennedy’s * Billy Corgan/Smashing Pumpkins

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6 thoughts on “Thom Yorke Vs Spotify : Why Doesn’t Spotify Speak Out Against Ad Funded Piracy?

  1. Thanks for a very intersting article.

    I suspect, however, that when advertizers realize the very high numbers of web users like myself who employ various “ad blockers” whilst on line their interest in and financial outlay on product placement on such sites, irrespective of visitor numbers, will be reviewed. Aside from that the third party middlemen agencies who arrange the placements in many situations will also take a hammering.

    If we are to “get really real for one second” then let’s not forget both Mr Yorke and Mr Reznor (both of whom with several years of major label promotional backing and millions invested in them) spent a considerable time railing against and decrying the “old” label model.

    Embarrasingly Mr Reznor now finds himself back with the major label Columbia and Radiohead, having helped devalue music by offering “In rainbows” at whatever price people wanted to pay, can hardly bemoan low streaming returns with any degree of credibility, can they?

    Karma can be a bitch.

      • Interestingly that’s exactly not what I think. Sure, artists should experiment with new business models but they shouldn’t herald their experiments as the future business model of a business they are (at that particular time) disaffected with when they themselves have no real idea of the trajectory (as has been proven by both messrs Yorke & Reznor).

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