Spotify Charms Customers and Frustrates Musicians

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Spotify is taking flak from frustrated musicians and shooting the breeze with the customers the company charms. The music streaming company is making efforts to appease both parties but some demands just cannot be met.

At the Vanity Fair New Establishment Summit: The Age of Innovation, Spotify Chief Executive Officer, Daniel Ek, along with Firefly’s Tom Freston, spoke on the streaming revolution of the music industry. Ek had much to say about musicians’ profits and what they are doing to maintain transparency with the artists.

Spotify is quickly growing into the top streaming service and turns a 70 percent profit to rights holders in Sweden. Ek says the revenue has increased in the music industry. Artists were concerned with whether streaming was good or bad for them.

The music streaming company communicates with artists allowing them to see the number of tracks they have streaming. To maintain transparency with the artists, the company created a website for the musicians detailing how much money is generated from the hundreds and thousands of streaming tracks.

Transparency, however, has its consequences. The artists, in turn, have gone to their labels seeking more income. That dialogue has prompted music labels to pay their artists more frequently as opposed to on an annual basis. Some, however, are not reaping what they consider are the full benefits of their work being streamed.

Jimmy Buffett asked Spotify’s C.E.O. whether artists should expect a raise directly from Ek’s booming company in the future or continue “through the bullshit” that labels subject them to. Empathizing with young artists in particular, Buffett says he hopes the music service groups are considering the struggles greenhorn musicians face obtaining revenue and music rights.

Buffett notes that when going through the record label, artists do not see most of the revenue. He says a change would be nice. Ek agrees but never concedes to supplying Buffett’s raise. Buffett’s raise is limited to the discretion of the label that owns rights to his music. This year alone, Spotify expects to spend over $1 billion on rights and pays 70 percent to rights holders.

Buffet sought compassion from moderator, Irving Azoff – a legendary music industry manager and founder of Azoff MSG Entertainment – when commenting on how low 70 percent is compared to past revenue. But the discussion moderator was unsympathetic. Azoff said he too was looking for a raise and suggested that Buffett sell a plane.

The business of streaming music has frustrated artists other than Buffett. Many have complained about the scrap money earned from their music being streamed. Bette Midler, Thom Yorke, and the Black Keys are just a few of the performers demanding more money from Spotify. Ultimately, Spotify, along with other streaming services, has an obligation to rights holders which, in most cases, happens to be the label.

Spotify is more forgiving, however, to customers’ concerns. Unlike with frustrated musicians, Spotify’s charms their customers as they devote unique personal attention to requests.

Spotify’s customer support team personalizes each response with a playlist. Whether a request is being made for a birthday-related playlist or assistance with the user interface, the team responds in a unique fashion.

Jeff Levick, Spotify’s chief business offers, says they have been customizing playlists for seven years. Each playlist is prepared by a customer service rep and is unscripted. One list customized for a new user named Scott – who was having trouble using the service – contained 13 tricks whose titles read, Hey/Mr. Scott/Welcome To The Party/We’re Here for a Good Time/So/Don’t Worry About a Thing/We’ll Be Here When You Need Us/Just/Shout/And/We/Will/Come Running.

When Spotify customer, James, reported an error, he received a response with a track list titled, James is a Hero. The list contained 10 tracks titled, Sweet Baby James/You’re Awesome/The World/Is/A/Better Place/With You/In It/Stay/Classy. The list featured tracks from James Taylor, Linkin Park, and Maps & Atlases.

Spotify appears to have a handle on concerned customers but are deferring artists’ complaints the music labels they are signed to. The company is availing itself to appease artists and consumers alike but to a certain extent, their hands are tied. While their creativity with handling customers’ concerns are commendable, actually fixing the issues addressed will do more to maintain favor with consumers. Unlike the charmed customers, maintaining favor with frustrated musicians may require a little more effort from Spotify.

By Charice Long


The Verge
Huffington Post