A love story that only works in one direction. An article in Le Figaro on Wednesday reveals that "Spotify is taking a stand against the music industry". The music industry has suffered greatly from piracy for ten years and had found its boom in the rise of music streaming platforms. Spotify has enjoyed unprecedented international success since its inception 14 years ago, but continues to rack up losses. These losses amount to 186 million euros, despite turnover which has jumped 28% in recent months.
The current remuneration rules called into question
This paradox is explained by the staggering royalties - the remuneration of artists - that the platform must pay to the majors Universal, Warner or Sony who control half of the world music market. Their first source of income has become music streaming . Remuneration is calculated on the number of paying subscribers, and Spotify no longer wants these remuneration rules. Spotify is asking record companies to pay these fees based on what subscribers are listening to.
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The streaming platform could act by encouraging its subscribers to listen to something other than the artists produced by the music majors. Podcasts for example, an area in which Spotify and Apple Music invest a lot. Indeed, Spotify recently launched a podcast on philosophy. The platform also encourages its subscribers to turn to background music. Therefore, if 20% of subscribers listened to content that is not from the major record labels, the latter will have less weight and in fact, the remuneration will fall.