With Direct Uploads, Spotify Changes the Streaming Game

Spotify just made a huge announcement that is going to change the music streaming landscape. Soon, musicians will be able to upload their music directly to Spotify.

“But wait,” you might say. “Artists can’t do that already?” The answer is: hell no.

Currently, artists and labels must use a 3rd party called an “aggregator” to get their music on the platform. Reminiscent of the middle-man-market of the 90s inflated music industry, it was basically the symptom of Spotify being too large of a platform to work with artists as individuals. Therefore, they needed a middle-man to handle all the needs of a musician and mold them into the giant machine that is Spotify. With their move of going public as a company in April of this year, Spotify has been taking their title as “Biggest Streaming Platform” in stride and ultimately planning to go even bigger.

They recently released “Spotify for Artists” which allowed musicians to individually control their Spotify profiles by changing pictures, adding bios, linking concerts, and even promoting certain tracks. Even so, this feature was only available through Spotify’s trusted aggregator partners. These partners charge fees, sometimes over periods of time, sometimes per album or song.

Announced today via a blog post and a subsequent guide, Spotify’s new direct upload feature is currently in Beta and available via invite only. It sends artists their royalties directly to their bank accounts every month, and includes some basic projections for the future of their profiles. It will allow artists to upload and edit their tracks and metadata fluidly, which will be a big advantage over the game of telephone artists currently have to play with labels, aggregators, and Spotify. (I myself had an annoying issue with a mixup that took weeks to get resolved).

When it rolls out in full, it will change the current landscape of streaming music. Firstly, aggregators are going to tank. If an artist or label wants to do the work themselves (they will), then why would they pay to have a 3rd party handle things for them? Not to mention, the easy access will undoubtedly add to the waning list of why labels are even relevant in today’s music industry (musicians’ tendency to be terrible at doing business and saving money will still keep most labels intact). Then, there’s the Soundcloud migration.

Spotify was attempting to buy Soundcloud for a third time in September of 2016, and ultimately pulled out of the deal because they didn’t want to pay what Soundcloud was asking. Now, two years later, Spotify has made the move that will seal Soundcloud’s fate. Dominated by underground hip- hop and EDM, Soundcloud’s appeal was the no-bullshit approach to uploading songs and delivering them to fans. With basically no monetization, it’s a low effort, no reward medium. Now that Spotify is going to be low effort, but promise monthly payments for streams, it’s basically game over. Soundcloud will have to lower the price of their paid services (I’m the only person I’ve ever known to pay for SoundCloud, and that was just to host a couple days’ worth of my old podcast) and will be sharing, and eventually losing much of its listenership.

It’s basically the music streaming equivalent of Snapchat’s fate when Instagram rolled out their stories feature.

So, is this good for the music industry? My thoughts are: yes and no.

Yes, because I’m a lazy p.o.s. Who rarely leaves Spotify to listen to the badass underground hip-hop I know lives on Soundcloud. Other than listening to Matt Monday’s track, “Lingo” and creating private press streams for tracks released on my label, I don’t use SoundCloud at all. Maybe 30 minutes a week. I’m on Spotify 20+ hours a week. If I can get access to even more stuff in one place, it’s ultimately going to enable me to listen to and discover more great music. That’s great for everyone.

Yet, there’s the No. I think the surge in Spotify’s presence is going to come predominantly from groups of people who aren’t going to give Spotify a dime. The free listening crowd of Soundcloud. While the cost of running ads on Spotify will definitely go up, it’s not going to counterbalance the surge in overall streams. And these overall streams will be distributed amongst a much broader song library (SoundCloud currently has110,000 free, user-uploaded tracks). This will directly translate into Spotify’s pay rate per song to go down, and Spotify already has one of the worst payouts in the industry.

Not only that, but Spotify is ultimately creating a free market within their service. By working with major labels and aggregators, if Spotify decides to lower their rates again, all the big players can band together and say “no” and drop out if Spotify tries to play dirty. With a completely individual artist-base, Spotify will hold all the cards, and can ultimately do whatever the hell they want. Copyrights and songwriters organizations can’t save musicians from a completely optional service, and nothing short of unionizing would give the artists any kind of power in the Spotify of the future.

HOW-EV-ER, free markets aren’t always a bad thing, and with all the competition out there, no artist will be forced to use Spotify’s services. In the meantime, musicians are going to be flocking to Spotify’s new direct upload features, and that probably means Spotify’s paid subscribers are going to increase too. Spotify is king of the hill, and it looks like they’re going to stay that way for years to come.