SoundCloud, Spotify, and Independent Artists
Until recently, Soundcloud was one of the main platforms for people to try their hand at music. Soundcloud was marketed as a “social sound platform” for anyone to listen, create, and share music.1 There, creatives and artists were able to upload their work and share it easily across social media platforms. Because of Soundcloud, a new subgenre of rap music was formed — “Soundcloud rap” — which gave rise to some of the newer names in rap — Lil’ Yachty, Fetty Wap, Lil Uzi Vert, and 6ix9ine, to name a few. However, Soundcloud will no longer be the only outlet for aspiring artists.
As of September 20, 2018, Spotify began allowing independent artists who control their own copyright to upload their own music directly onto the streaming platform.2 Prior to this, content on Spotify had to be delivered either by a record label or a distributor.3 If an artist was signed to a label, then the label would be responsible for putting the music onto Spotify.4 If an artist was independent — meaning they did not have a record label backing — then the artist had to manage his own distribution and upload the music onto Spotify himself. Now, Spotify is making the process easier for independent artists to showcase their music with a new feature called Spotify for Artists.5 Artists can create their own profiles, monitor statistics to see how many people are listening to their music, and promote upcoming performances.6 With Spotify for Artists, artists are now able to circumvent distributors — such as Reverbnation or the Orchard, who only work with labels — and bypass record labels, who usually demand ownership of the records as part of any deal.7
Despite this new venture, Spotify has consistently denied any plans to transition into a record label.8
In November 2018, Taylor Swift became a free agent, after her contract ended with Big Machine Label Group.9 As independent artists, Swift and Bennett could upload their music directly to Spotify and retain ownership. Though artists would retain all royalties, for some artists that ownership may come with a paycut. Historically, Spotify pays about $0.006 to $0.0084 per stream to the rights holder, with the holder’s earnings being split among the record label, producers, artists, and songwriters.10 Without the record label overhead, artists can now minimize distribution costs and retain 100% of the royalties.11
But what about those artists who rely heavily on sampling? DJs and producers note that most of their works use other artists’ original music in mixes and samples. Spotify notes that any sampling must be cleared by the owner. This puts the responsibility on the artists to get permission; however, independent artists may struggle to obtain clearances.12 Some big record labels will ignore clearance requests from independent artists. Spotify may have to heavily monitor the uploaded content or run the risk of being sued yet again.
Soundcloud, https://help.soundcloud.com/hc/en-us/articles/115003570488-What-is-SoundCloud-.[ https://perma.cc/R8PX-FNXP]↩
Dan Rys, Spotify to Allow Indie Artists to Upload Music Directly to Service, Bypassing Distributors, Billboard (Sept. 20, 2018), https://www.billboard.com/articles/business/8476084/spotify-indie-artists-upload-music-songs-directly-bypassing-distributors. [https://perma.cc/S8Z2-XTNN]↩
Ben Sisario, A New Spotify Initiative Makes the Big Record Labels Nervous, N.Y. Times (Sept. 6, 2018), https://www.nytimes.com/2018/09/06/business/media/spotify-music-industry-record-labels.html. [https://perma.cc/F2Q6-5W4P]↩
Melinda Newman, With Taylor Swift’s Big Machine Contract Ending, Can the Label That Made Her a Superstar Keep Her?, Billboard (Aug. 27, 2018, 9:46 PM), https://www.billboard.com/biz/articles/news/record-labels/8472568/with-taylor-swifts-big-machine-contract-ending-can-the-label. [https://perma.cc/8R4N-6D7P][/footnote] Chancelor Bennett — known to fans as Chance the Rapper — made music history with his Grammy wins, despite never having sold a single album commercially.[footnote]Amy X.Wang, Why Chance the Rapper—who just made Grammy history—gives his music away for free, Quartz (Feb. 13, 2013), https://qz.com/908815/why-chance-the-rapper-who-just-made-grammy-history-gives-his-music-away-for-free/l. [https://perma.cc/DHF6-NXGE]↩
Khabir Sehgal, Spotify and Apple Music should become record labels so musicians can make a fair living, CNBC (Jan. 26, 2018, 11:04 AM), https://www.cnbc.com/2018/01/26/how-spotify-apple-music-can-pay-musicians-more-commentary.html. [https://perma.cc/5UX7-LBWJ]↩
See supra note 2.↩