Spotify and the Future of the Independent Artist

On August 31, Todd Gautreau, the brains behind excellent area dream-pop act Crushed Stars, took to the band's Facebook page to sound off on a topic that's turned into a national debate among artists, record labels, music consumers and various streaming services, specifically and most notably Spotify.

Gautreau, who's received a great deal of deserved praise for his Crushed Stars catalog, delivered a message of frustration, as well as a plea to fans of independent music: "Spotify screws indie artists, which is why we do not participate. It removes any incentive for actually purchasing music and pays a minuscule royalty that amounts to virtually nothing compared to the loss of sales."

"I don't recall what triggered it that day," Gautreau explains later. "But I generally cringe at the very thought of Spotify. We do not allow any of our tracks on Spotify. We are, however, on Pandora, which I think is a fairer model, because it lends itself more to discovering new artists and is less of an on-demand service. I was hesitant to share my feelings with fans because I certainly don't want to tell people how to spend their money, but I wanted to point out a few things from the artist's perspective that perhaps they hadn't considered. I understand the lure of the bargain for music fans. But Spotify completely removes any incentive to actually buy music. Most folks I know who use Spotify do not go out and buy what they discover there."

Gautreau sees the monthly fee for Spotify as little more than something to clear the conscience of record labels and perhaps the consumer, a way to gain something while giving little.

"I really see streaming as just a legally sanctioned form of piracy," he says. "It's perhaps a harsh comparison, and it isn't meant to equate to piracy from the consumer's perspective. But in terms of benefit to the artists, there is often very little difference between streaming's minuscule royalty and the non-existent royalty from an illegal download."

There are plenty of fans — Spotify now has millions of monthly users — as well as owners of independent record labels and artists who disagree. Given that Gautreau is asking for music fans to spend a higher percentage of their income on physical albums or legal downloads, it's hard to argue with the simple economics he's decided to spar with.

Erv Karwelis, owner of Dallas-based record label Idol Records, understands that Spotify is a real part of the business of music, accepts it and understands how he and his artists can benefit from it.

"I feel it's a great way to get the music out there so people can check it out for free," Karwelis says. "The hope is that a certain amount of people will actually buy downloads or CDs and vinyl versions if they like it enough. All indications are pointing to the fact that streaming will become the primary way people listen to music in the future, so you have to embrace it. Meanwhile, there are always going to be people that want a physical product they can hold in their hand and read the liner notes and look at the artwork. The renaissance of vinyl is proof of that, and there will always be people who want to collect the records and CDs of their favorite artists."

R. Loren, owner of Handmade Birds, one-time label to Pinkish Black, thinks the time for Internet buzzing over Spotify is well past usefulness.

"I would equate talking about Spotify with assigning 1984 to high school students today," says Loren, who sells vinyl and cassette versions of his label's albums. "It's fascinating and uniquely relevant, but it's a discussion that's been long played out. We have passed discussing 'downloading' or 'streaming,' just as we have passed talking about 'The Man' that's going to come take us over."

It's not shocking record label owners are willing to accept technology that helps them distribute their product and create awareness of their rosters, but there are also independent artists who don't share Gautreau's pro-artist take on the issue. David Ponder, the lead guitar player for Somebody's Darling, is a Spotify user himself, and he sees it as a necessity for indie acts in the current marketplace.

"I think Spotify is pretty vital," he says. "From a consumer standpoint, once you cross over and start relying on Spotify, I think you get hooked fast. It's become maybe the most important tool for finding new music for me personally. There's no reason a band like Somebody's Darling wouldn't want to be on Spotify."

It's not all fun and almost-free musical discovery for Ponder, though. He admits that the fractions of pennies Spotify pays in royalties counter his instincts as an artist.

"The small pay-out negatively impacts my feelings," he says. "I wish the pay-out system seemed more fair, but right now, there's just no arguing with the upside of Spotify. All of that music at your fingertips is incredible."

Gautreau feels that the success of Spotify will doom many independent artists who may not be able to come even close to earning back their recording costs, if they continue to lose album-purchasing customers to streaming services.

"If customers want to see the indie artists they love continue to be able to make music, they need to support them on a greater level than what Spotify royalties provide," Gautreau says. "Many great records never recoup their costs, but with streaming models, these costs have to be recouped at the rate of less than a penny per stream. In many cases, that's just going to be impossible, so fewer acts will get signed and fewer records will get made."

What music fan doesn't want their favorite band to create on a regular basis? Of course, Spotify answers the consumer-based wishes of both the young and old. For those who grew up and discovered music before MP3s and file-sharing, Spotify offers full albums, not snippets or single songs, for a fraction of the cost of buying the complete album, physically or digitally. The downside for the music fan is practically nonexistent when viewed from that angle. A price is being paid to a legal service with willing participants — stealing or piracy, this isn't.

In actuality, the hopes of Gautreau and other notable artists such as Grizzly Bear's Ed Droste aren't in step with reality or technology. Fortunately or unfortunately, depending on which side one falls on this topic, the habits of the consumer matter more than the economics of the artist.

While Loren sees debate regarding Spotify as passé, he feels even stronger regarding the need to simply accept the popular, modern tide.

"[Streaming services] exist. People that resist it are like turds screaming at the sunset — helpless."

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Kelly Dearmore

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