I am Mark Dent, a journalist for The Hustle who dove deep into the economics of Spotify and discovered why their incredibly complicated and complex system for paying out royalties is bad for artists. Ask me anything about how Spotify actually works.

Hello,

What is the best alternative to Spotify?

And as a follow up, what is the best way to discover new music/bands as all the radio stations appear to be owned by the same parent company.

Thanks in advance.

Hey there -- I agree that Tidal is probably the best alternative, in terms of the size of the catalog being good for users and that it has the best revenue structure for artists of the major services. The average payout on Tidal is more than 2x as much as on Spotify.

Bandcamp is another good choice, though, which you can use for streaming and buying songs/full albums. Artists get back around 80-90% of all Bandcamp revenue.

As for alternatives to finding artists on corporate radio and Spotify, I'd recommend just reading lots of music websites and blogs: Pitchfork, NME, Stereogum are among some of the biggest sites. Those might be able to help you find more artists and then from Tidal or Bandcamp you could find more.

Mark

Hi, I've discussed with friends, and it seems it is common that Spotify plays the same songs on our Playlist when we hit shuffle. Is there a way to change this?

Hey -- I've noticed the same thing! But unfortunately I have no idea why and that's not something I've looked into. Sorry!

How did you calculate opportunity costs when determining whether or not the payment scheme was good / bad for artists?

I didn't calculate them in a scientific way. But artists told me that outside the cash payouts from Spotify the only advantage is exposure. That gets brought up a lot -- that Spotify can give you more fans, who will then go to concerts and potentially buy merchandise etc. They told me, though, that the exposure was overrated or at least not enough to make Spotify worthwhile for them.

Hi mark. Thanks for doing this. What alternatives do artists have to Spotify which offers better value for them and their listeners?

Hey -- absolutely.

For both artists and listeners, Bandcamp has been a great alternative. It has streaming, but people can also buy digital songs and even physical albums. These options make it much more lucrative for artists and also help their listeners easily buy products that can help out the artist. One singer, Sadie Dupuis, told me she makes more in Bandcamp in a month than she does at Spotify in a year, even though she's been streamed on Spotify millions of times.

To echo what I said above, Tidal is probably the best big streamer for artists and it has a good catalog of music, similar to Spotify.

However, almost any artist will tell you streaming, overall, is not really that great for them. Buying physical or digital albums of artists you really care about is probably the best way to benefit them.

Hi Mark, Is there a difference for certain artists or do all artists make the same tiny fraction of royalties? For example does someone like Drake make a larger percentage royalty as say a less known artist or is it all the same?

Hey -- that's a great question. Yes, artists like Drake who are on major labels tend to make a slightly larger cut of royalties, as it is the labels who negotiate with Spotify. Drake then negotiates to get a certain percentage of the revenue that the label gets back from Spotify (and that percentage is usually less than 50% for most artists, even big artists)

So even with Drake, the average per stream revenue comes out to a fraction of a cent. He's just better off than lesser-known artists because his songs are streamed SO MUCH that the money adds up.

Does Spotify use computer/AI generated "music" for their instrumental radio stations?

Sorry, I have no idea. I did not look into that.

Is it not true that the owner of spotify is also the owner of Moderna?

Spotify is a publicly-traded company. If you're looking for more info on who holds the most shares, I'd recommend reading this https://www.rollingstone.com/pro/news/who-really-owns-spotify-955388/

Is there any economic impact at all to Spotify from Neil Young leaving?

We'l find out more in a couple months when Spotify releases its quarterly reports. But it's possible that a lot of users will cancel their accounts over Young and other artists like india.arie protesting Spotify. We'd be able to see this if they don't experience nearly as much growth as expected during this quarter. Fewer users or less growth would lead to lower revenues for Spotify, which has never really been profitable anyway.

Just in the last couple weeks, Spotify's stock has tanked, although part of that is likely attributable to the general decline in stocks nationwide.

That said, there's a reason why Spotify just let Neil Young leave. They've invested a ton of money in Joe Rogan, and podcasting is a far simpler revenue model for Spotify. They're not hurting that bad..yet.

To really hurt Spotify, as artists told me, they would need to have a coordinated walkout from Spotify from tons of artists at the same time. This would be exceptionally difficult because record labels are the entities that negotiate with Spotify and own the rights to most artists' songs. And the labels do not want to leave Spotify.