Spotify has been taking a beating in the press lately and we understand why. We have offered our own criticisms which mostly revolve around royalty rates and transparency. But we’ve also stated that Spotify is a symptom of a much larger disease of illegally operating, infringing businesses who make millions individually and billions collectively while paying absolutely zero to artists and rights holders.

As much as we disagree with Spotify over their rates and PR spin on several issues, we also recognize that they are legal, licensed and pay out royalties as they have been negotiated. Artists are able to opt out of Spotify individually (and also if their label permits).  It is for these reasons that Spotify are NOT the enemy.

However this begs the question, if Spotify are not the enemy, who is? Well, as we stated above it is the massively deceptive Ad Tech businesses who have been financing mainstream music piracy for over a decade. This is the Silicon Valley internet tech lobby (lead by Google) who seek to dismantle and destroy copyright protection for individual creators.

Yes, we hear a lot of lip service about how these people say they are really pro-copyright and pro-artist, but when every meaningful action and suggestion is to the contrary of protection and compensation of the artists work and labor it all rings a bit hollow. We now know after a decade plus of internet/tech snake oil salesmen there is no magic bullet and that “touring and t-shirts” is an admission of the failure of these online businesses to provide sustainable earnings for creators.

Piracy is NOT Promotion

Exploitation is NOT Innovation

In our ongoing “Exploited By…” series of posts we illustrate how major Fortune 500 companies, represented by Madison Avenue Advertising Agencies have been, and continue to finance the destruction of the creative community.

So we say this…

Let us focus first on the many who pay nothing at all to musicians while pocketing 100% of the Profit. Let us focus our energies on the illegally operating companies and corporations who have made infringement for profit their business model.

We are encouraged to see Spotify also take up this mutually beneficial fight against those companies and business who have so greatly devalued the work of musicians as well as impeding the growth potential of legal and licensed companies to create sustainable models for all stakeholders.

Will Page a Spotify spokesperson had this to say in The Register UK:

“Copyright infringing websites are big businesses … 2/3 of piracy sites have advertising, and 1/3 also include credit card logons. This competition is real: consider how ad pricing is distorted by those unlicensed sites who offer more scale and no content costs.”

This is the first step towards making real change that will remove the bad actors from the marketplace and move towards a sustainable ecosystem for all legal and licensed stakeholders.

We’ve commented before that we believe that Spotify is unsustainable at current rates. It is also worth noting that Spotify pays significantly MORE than YouTube, a business that was founded and built on the premise of infringement for profit. Although YouTube and Google have made improvements in their services for rights management they still fundamentally devalue the work of artists hiding behind the DMCA.  Google and YouTube also continue to create and distribute anti-copyright and anti-artist propaganda asserting that any “remix” of an artists work is “fair use.” It is not.

In the end Spotify needs to increase it’s revenue per stream so it can increase it’s royalties per stream to be sustainable for artists. The number one way to do this is to capture the millions or even billions in advertising revenue that are financing illegally operating and infringing businesses that pay artists nothing.

In closing, the enemy is not so much those who pay so little offering artists both consent and compensation, but more so those who are paying nothing at all and deny the artists consent.

Exhibit A:

Lou Reed Exploited By American Express, AT&T, Chevorlet, Chili’s, Lysol, Pottery Barn, Vons, Domino’s Pizza, Netflix, Galaxy Nexus and Ron Jeremy!