MBW Views is a series of exclusive commentaries from notable people in the music industry… who have something to say. The following post is by MBW founder Tim Ingham. It first appeared in December as an editorial in the latest issue (Q2 2024) of MBW’s premium quarterly sister publication for and about the UK market, Music Business UK, which is available exclusively to MBW+ subscribers.
Daniel Ek got himself into trouble in June when he tweeted that for modern music creators, the “cost of creating content is close to zero.”
After an outcry from musicians Ek apologized. “It’s clear that I was too vague… even with my clumsy definition of content,” he wrote. “I understand that it came across as very reductionist, and that was not my intention.”
This fuss made numerous headlines, but a completely different Series of social media posts by Ek has frightened me in the last few weeks.
The posts in question were neither offensive, nor economically insensitive, nor thoughtless, nor any of the things that usually make ‘the Blob’ angry at X. No; these comments by Ek were rehearsed, fixed… and pure propaganda.
I first noticed them in May. “Amazing to see more Artists from Great Britain be discovered on Spotify,” Ek wrote on LinkedIn. “In 2023 alone United Kingdom Artist have been discovered 13 billion times!”
I soon realized that this was not the first time Ek had made an uncharacteristically playful statement on this topic.
Two weeks earlier, Ek wrote in eerily similar prose on LinkedIn: “I love to see Brazilian Artist still on Spotify! Only last year, first-time listeners discovered Brazilian artists 10 billion times. (And) in 2023, Brazilian artists’ revenues through Spotify alone reached more than BRL 1.2 billion.”
If we turn the clock back another week, we will find that Ek wrote: “(Only) last year, Canadian Artist have been discovered by first-time listeners over 3.8 billion times. That’s huge!”
What was the trigger Ex sudden interest in the success of native artists in these great nations (and the enthusiastic celebration of that success)?
His own economic dangerNaturally.
At the beginning of June, Canadian Radio-television and Telecommunications Commission (CRTC) announced that a new “streaming tax” will be imposed on global digital entertainment players, including Spotify, Apple Music and Netflix.
These platforms must now contribute 5% of their annual revenue in Canada to programs that directly support local content creators. The subtext: said local artists are economically oppressed by the economy of streaming and require government intervention to earn a fair income.
Canada’s move follows a similar development in France, where Spotify and Co. are now forced to pay 1.2% of their local annual income to finance the music of local artists.
In response Spotify has its prices in the country of the tricolour.
The obvious question is: are the international dominoes now falling? Canada And Francewe could soon see a similar “streaming tax” in the United Kingdom?
If so, you probably won’t hear too many complaints from UK rights holders – as long as they get a few million more from Spotify Annual fund.
However, this idea carries risks: As in France, Spotify could respond by raising prices in the UK (i.e. passing the cost of the ‘tax’ on to consumers), which in turn could encourage cash-strapped music fans to cancel their subscriptions.
Another possible disadvantage: the Administrative costs to redistribute the revenue from such a tax.
Not only could this get complicated (and expensive), but as you’re probably aware, the music industry has a number of lucrative sectors (recordings, publishing, live promoters, venues, artist managers, etc.), each with their own claim to the windfall revenue from the “streaming tax.”
Whatever the case, know this: Whenever Daniel Ek uses a cheerful exclamation mark on LinkedIncheck his motives.
The cost of creating content may be “almost zero,” but music is a multi-billion dollar business – and Ek does not want to give up his share.Music business worldwide
