I was reading Billboard magazine when I came across an interesting blurb in a discussion about the American rock duo, The Black Keys. The blurb states that The Black Keys have refused to allow Spotify to stream their new music (from the album El Camino). It was simply a business decision for the duo. They explain that it would take an unprecedented number of full steams on Spotify to even equal the amount they would receive on one digital download. Billboard did the tough work and figured out exactly how many full streams would actually be necessary to equal that 99-cent digital download. Billboard found that it takes 64 full streams for an artist to make as much $ on Spotify as they would w/a single 99-cent download on iTunes.
The Black Keys are not the only artists to shun Spotify. Major names including Adele and Coldplay have limited what can be heard on Spotify in the past.
While Spotify provides an excellent platform for artists to easily publicize their works, it leaves much to be desired in the realm of compensation. Artists must recognize that they will not be able to earn a living off of Spotify streams, and then work with their management teams to determine whether the benefits of having new releases on the service outweighs the negative of basically giving away their music for free.
Further, artists would do themselves good to hire competent counsel in the negotiation of 360 agreements, which includes language for the distribution of revenue between the artists and labels. A good attorney will be able to negotiate the highest percentage possible for the artists in important categories such as concert revenue and merchandise sales, which are the categories that tend to provide the most money to artists in today’s day and age.