Is Spotify becoming a record label?
Since the dawn of recorded music the industry has been dominated, like most big industries, by a small amount of big companies. In this case, it's what are usually called "major labels" like Sony, EMI, Warner etc. Even since the internet has made it possible to publish music without the help of a label, these companies are the still the gatekeepers to stardom. Spotify's new initiative may change that.
According to a report from the New York Times, Spotify has begun, over the past year, signing deals directly with independent artists, cutting out the middleman of the record label. The benefit of the deal, for the artists, is "full ownership of their recordings" and a much bigger cut of the streaming revenue:
Spotify typically pays a record label around 52 percent of the revenue generated by each stream, or play, of a given song. The label, in turn, pays the artist a royalty of anywhere from 15 percent to, in some cases, 50 percent of its cut. By agreeing to a direct licensing deal with Spotify, artists and their representatives are able to keep the whole payout.
The new Spotify deals, which have been in the works for the past year, "are not exclusive, leaving the artists free to license their songs to other streaming companies, like Apple Music and Amazon."
Spotify's CEO Daniel Ek–maybe afraid of losing the deals they have with the major labels–was careful to stress that Spotify is not becoming a record label, saying that "Licensing content does not make us a label, nor do we have any interest in becoming a label. We don’t own any rights to any music, and we’re not acting like a record label.” Although nominally not a record label, Spotify may be charting a course for the future of the music industry, where the medium of distribution and the label are not separate.
The artists signed to Spotify have, at the time of writing, yet to be announced.