So, back in the day you would have bought a disc, a digital album, a cassette or even a record. This could have been a ~15€ purchase and then you'd stick that into the playback device of your choice and you'd be good to go. These 15€ would go to the label of the artist, who has a contract with the artist regulating their payout. In general, a label needs to balance its spending on manufacturing (CD's or cassettes cost money), employees, equipment etc. with their spending on the artist. This hasn't changed today (except you don't pay for CD's or cassettes anymore), but with Spotify in the mix it's now a bit more complicated. Consider this example: Instead of buying a disc, you now pay 13€ to Spotify and listen to Artist A exactly one time. Then, you log off and don't use Spotify for the rest of the month. At the end of the month it's payout time: First things first, Spotify takes a 30% cut for the amazing service they provide you with. Then the remaining 70% should go Artist A, right? Well, that would be the fair thing to do, but Spotify is smarter than that.

When you listen to music from Artist A, your “listen” is thrown into the pool of all listens out there. This means that if you listen to Artist A once, and you are Artist A's only listener, Artist A will get paid the same as every other Artist on Spotify that had only one listen. Even though you paid the price of what could have been a full CD from Artist A, they now get 0,004€¹⁾ and the remaining 12,99€ - 30% - 0,004€ ≈ 9,93€ now go to Taylor Swift²⁾.

The way this works is that the total amount of money collected from end users is, at the end of the month, distributed to all artists equally, proportionally to their share in plays. This isn't about how many plays they got in absolute terms, it's about how many plays they got in comparison to everyone else. Example: If 30% of all plays in a month go to Taylor Swift (completely made up number), she will get 30% of the available money. So, regardless of how much you play Artist A, 30% of your money put into the platform will go to Taylor Swift. Trying to change this, for example by inflating Artist A's numbers (which is mathematically impossible to do legally)³⁾. Spotify has - of course by “accident” - created a zero-sum game that will make everyone pay the big ones while small artists are fighting over the scraps. And the cool thing about not being one of the big artists is that it is essentially impossible to become one, because to do that you would have to the percentage of plays of other artists. If Artist A does somehow win, then that by design means that other artists will get (proportionally) less plays⁴⁾. If you, as an artist, become successful, you are doing that by increasing your proportional share of plays, which necessarily comes out of the share of plays of everyone else.

You can imagine this as trying to sell books from your garage, but you only get 0,004€ per book sale - not because your books are shit, but because Amazon just sells more. Amazon has whole warehouses of books that they sell using freighters, planes and trucks, and because they sell 99,999999999% of books in the book market, you're just shit outta luck. Again, not because there is a problem with your books, it's solely because you're not the monopoly holder. In music terms, this means that even if you are a local legend and hold concerts in your hometown with a few thousand listeners from your community, that still only puts you ahead of 0,00000245% of artists on Spotify. Therefore you get paid like a 0,00000245%.
Making Spotify a zero-sum⁵⁾ game means that it is - by design of the structure - impossible to win.

Another thing about Spotify is that people like its algorithm. We get music recommendations from Spotify, which has a pretty big influence over what kind of music people listen to. As an outstanding observer… Isn't it convenient how Spotify is structured in a way to benefit big artists and, with its algorithm, also gets executive control over who the biggest artists are in the first place? Like, it just so happens that Spotify went out of its way to create a monetization “system” that works like an oligarchy and with its recommendation system also has a major, if not overwhelmingly large, say in who becomes an oligarch? And here is a little, dark secret that you may not even want to know - if they control who most people listen to… they also control who will not be listened to. So, uh, any bets on who we think is not going to get recommended a lot by the algorithm? Because, I think I have the hunch that Spotify will like to use its algorithm to reinforce the rigid and hostile monetization structure.

Because, this isn't so much about the exact names of the oligarchs at the top as it is about keeping the total number of oligarchs low. The goal is closing the door behind yourself so that the top keep earning a lot more than anyone else.

The invisible loser is, always, the local legend, the community rock band or even just renowned bands from your state (especially those). Ask any actual music person who is passionate about their work and wants to immerse themselves and others with their artistic way of self-expression - nobody, nobody likes Spotify. The only reason they use it is because they have to. If you don't, you get overrun by the monopoly and eventually have to close down.

Satirical, made up strawman person: “But, you know, who cares about local artists, right? Those are all pussies, anyway. If you don't make enough you're not working hard enough. They should improve their music and cut down on unnecessary expenses. Less Netflix, it's a distraction, anyway. I make enough money to pay for a monthly Spotify membership and I get all the service I want. I get the music I care about, I can listen to it at 256kbit/s as opposed to the peasantly 128kbit/s (and can definitely hear the difference), the music I listen to is only from people who actually made it as individuals, so I don't have to listen to the riffraff.”

The problem in reality is, unfortunately, that you and I are riffraff ourselves. The same structural mechanics keeping people from earning livable wages on Spotify is (just about) why you and I are barely making any money in our own lives. If you can buy a Spotify membership you may not be a Taylor Swift, but you definitely enjoy a good amount of Privilege. That's good for you, but in this case the privilege is required. For many of us this problem is real. Very real. Some of us have to accept massive cuts in their quality of life if they want to do something as basic as listening to music through Spotify. And this may sound acceptable if you consider that Spotify is a service offered to you, but people have their entire music library on there. If you stop paying for Spotify for whatever reason, then that's it for you (Covid happens? Trump tariffs happen? Inflation? Price hike? Job loss? Healthcare/Surgery costs? Had to fix your washing machine? Just “didn't get as lucky and were born into a poor household”? Make your pick!). Even the music you downloaded, it's gone, you're fucked. You do not own anything on Spotify. When you submit yourself to Spotify, you accept that Spotify is in control of your access to music. If they don't like your face, or if you stop paying the membership fee for any of the three quadrillion possible reasons, you get kicked out.

When you're kicked out, you're done. Spotify is a deliberately designed walled garden with no way of migrating to another platform easily. You do anything on Spotify that you care about - for example finding new music or creating playlists - then now that's it. You have to keep paying Spotify until the end of your life, 13€ per month. If you live another 60 years then you'll be paying 9360€ just to keep being allowed to listen to your music. Does any normal person ever get close to spending anywhere that much on music? My friend, you could buy a car from that and listen to music on any other platform instead. Subscription prices rack up fast. And if you fail to pay, at any time, for any reason, you're excluded from the party.

And also, you will listen to music the way Spotify wants you to. So you will be using their audio player, regardless of whether you like it, you will not be getting access to the actual audio files to use them in personal/private projects, Spotify controls for you which music they allow or disallow on their platform, and if you want to do anything with their music you will use only the tools Spotify gives you to do it. If their tools don't allow you to do what you want to do, then you're just another subscription-paying customer. Spotify killed its external API's and 3rd party playback support. Everything is kept proprietary so that only Spotify has control over how their product is used⁶⁾. If Spotify changes their tune in the future and becomes more predatory to the consumers, either through monetization practices or restriction of functionality, then you can be outraged for a bit, but then you will go back to paying the membership again, because that's what you'll do anyway.

That reminds me, I have a story to tell you about how YouTube has been enshittified over the years but, because it is not a walled garden, people created tools to make it not shitty again. But Spotify is different. When Spotify enshittifies, and it's already on its way of doing that, the only option you have is to give up Spotify entirely, including all your playlists and everything, and restart form zero. Spotify by design offers no inter-compatibility, and uses only proprietary standards to make sure that your way out of Spotify is as hard as it can possibly be.

EVEN if you read a page about Spotify online and decide “honestly, yeah, fuck this platform”, you'll probably still think to yourself “well, but how am I gonna migrate away from it? There's no way to export your playlists and all”, which may or may not ultimately make you think that it's not worth the drama. Every good platform has the kind of inter-compatibility needed to leave you with a choice and to give you the data you need to exist and function independently of the platform… but not Spotify⁷⁾.

To executives, piracy is a variable to consider in business, not a matter of ethics where we are trying to “do the right thing” or “care about the artists” (right, about that…). Remember, these are the same kind of people that would prefer people dying and paying for the resulting lawsuits, rather than paying for proper staffing, maintenance and safety checks. You know, unlike executives, people are conceptually actually willing to do the right thing (especially when you make it as convenient as Spotify does). People be willing to pay if companies get the pricing right. That's why Spotify is working, at least a little bit, to reduce piracy.

Ultimately though, Spotify is another in a long list trying profit at your expense, with the objective “Reduce piracy” being a literal stand-in for “maximize profit margins”, not whatever you think is good about reducing piracy.

If you want, continue reading on Spotify (Level 2)