How Spotify Remade the Music Industry w/ Liz Pelly
Feb 6, 2025
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In this conversation, Liz Pelly, a music journalist and author of "Mood Machine," dives into the seismic shifts Spotify has caused in the music industry. She discusses how streaming services manipulate artist compensation and explores the rise of curated playlists that shape listener experiences. Pelly emphasizes the importance of collective action for independent musicians facing industry giants. The dialogue also touches on innovative community initiatives that seek to revalue music beyond profit, showcasing local libraries' role in supporting artists.
The current streaming model heavily disadvantages artists, leaving them struggling financially due to low compensation from platforms like Spotify.
Spotify's transition from human-curated playlists to algorithm-driven recommendations has transformed music discovery, affecting user engagement and connection to music.
Calls for a user-centric streaming model aim to directly support artists but face opposition from major labels attempting to maintain control over the industry.
Deep dives
Impact of Streaming on Artists
The current streaming model significantly disadvantages artists, with companies like Spotify often seen as prioritizing profit over fair pay. Many musicians receive minimal compensation for their work, making it difficult to sustain a living from music. This situation is further compounded by powerful major labels that negotiate favorable deals with streaming services, leaving independent artists struggling to get fair royalties. The podcast highlights the need for change in the music industry and raises questions about how streaming impacts artists' livelihoods.
Spotify's Origins and Business Model
Spotify was established in 2006 by Daniel Ek and Martin Lorentzon, whose backgrounds were rooted in advertising rather than music, influencing its business model. The platform's initial advertising-funded strategy evolved into a subscription model, primarily focusing on user data for profits. This model has created a two-sided marketplace where Spotify profits from both users and artists, yet the royalties paid to artists often reflect a small fraction of the revenue generated. The emphasis on advertising and user engagement has shaped Spotify’s identity as a significant player in the music industry.
Shifting Listening Habits and Spotify's Algorithms
The podcast discusses how Spotify's approach to playlists has transitioned from human curation to algorithm-driven recommendations, emphasizing a 'lean back' listening experience. By encouraging users to engage less actively with music selection and rely on curated playlists, Spotify has changed how listeners discover and connect with music. This shift prioritizes engagement and retention, which ultimately benefits the company's bottom line but may dilute the personal connection users have with the music. As a result, listeners may overlook the artistic value of music in favor of algorithmically generated playlists.
Proposed Changes in the Streaming Ecosystem
Calls for a user-centric streaming model, where subscription fees go directly to the artists users actively listen to, offer a solution to the inequities of the current system. However, major labels have suggested an alternative model that sidelines smaller artists while targeting bots and 'non-serious' musicians, positioning themselves as defenders of quality music. This proposal threatens to further marginalize independent artists whose work may not meet arbitrary streaming thresholds set by big labels. The friction between these two proposals illustrates the ongoing conflict surrounding artist compensation and the structure of the music industry.
The Role of Libraries in Music Accessibility
Libraries are highlighted as an innovative model for promoting local music through digital collections, creating a community-focused alternative to commercial streaming services. By licensing music from local artists, libraries can offer a platform for discovering music that might not be available through larger streaming services. These initiatives also emphasize fostering connections between artists and listeners, rejuvenating the role of music in local culture. The podcast argues that public institutions can provide valuable resources that prioritize community and creativity rather than profit.
Paris Marx is joined by Liz Pelly to discuss how Spotify changes how we listen to music and the broader impacts it has on the wider music industry.
Liz Pelly is a music journalist and the author of Mood Machine.
Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Support the show on Patreon.
The podcast is made in partnership with The Nation. Production is by Eric Wickham.
Also mentioned in this episode:
You can read an excerpt of Liz’s book in Harper’s.
The CEO of Suno AI said people “don’t enjoy” making music.
