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Why Radiohead's Thom Yorke is pulling out of Spotify
"Someone gotta say something. It's bad for new music"
Thom Yorke to Spotify: I don't belong here.
Thom Yorke to Spotify: I don't belong here. Henry Ruggeri/Corbis
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adiohead frontman Thom Yorke, who in February said Google and Apple made music "worthless in order to make their billions," has lodged a new complaint against the digital distribution of music. Yorke and longtime Radiohead producer Nigel Godrich have pulled some of their side projects, including Atoms for Peace album AMOK, from Spotify, one of the leading music-streaming sites.

The reason, as Godrich put it: "New artists get paid f*** with this model."

In a solid 12-Tweet rant on Sunday, Godrich elaborated:

The music industry is being taken over by the back door.. and if we don't try and make it fair for new music producers and artists, then the art will suffer. Make no mistake. These are all the same old industry bods trying to get a stranglehold on the delivery system...

Meanwhile small labels and new artists can't even keep their lights on. It's just not right. Plus people are scared to speak up or not take part as they are told they will lose invaluable exposure if they don't play ball. Meanwhile. Millions of streams gets them a few thousand dollars. Not like radio at all...

Some records can be made in a laptop, but some need musician and skilled technicians. These things cost money. Pink floyds catalogue has already generated billions of dollars for someone (not necessarily the band) so now putting it on a streaming site makes total sense. But if people had been listening to spotify instead of buying records in 1973 I doubt very much if dark side would have been made. It would just be too expensive. Anyway thumbs hurting now... ;)

Godrich isn't the first musician to bemoan Spotify's pay equation. In 2012, Brooklyn band Grizzly Bear tweeted they were paid just $10 for 10,000 plays of their tracks, and singer-songwriter Erin McKeown told National Public Radio her pay averaged out to less than half of one cent per play.

For the uninitiated, Spotify sells subscriptions to its 20 million-plus song library, not individual songs. It makes money two ways: From the six million subscribers who pay a fee each month (it's $9.99 for the premium package in the U.S.), and from brands that advertise against Spotify's free service, which results in ads being interspersed between songs like on the radio. Spotify claims on its site to pay out the majority of the revenue — "approaching 70 percent" — to publishers, labels, artists, and performing rights societies.

Spotify keeps the exact nature of the agreements secret, but explains this much:

In general, however, Spotify pays royalties in relation to an artist's popularity on the service. For example, we will pay out approximately 2% of our gross royalties for an artist whose music represents approximately 2% of what our users stream. A popular song or album can generate far more revenue for an artist over time than it historically would have from upfront unit sales.

It's easy to see how popular artists bank, and emerging artists get burned.

Despite all the protest, Spotify's model has its supporters — beyond the subscribers who can cheaply explore every music genre to their hearts' content. This spring, What Culture's Thom Bruce argued that Spotify may be helping the music industry grow again, for the first time in over a decade.

A rise of just 0.3% was measured for 2012 by the International Federation of the Phonographic Industry. It’s a small number but a very big deal considering the year on year loss since 1999, largely due to illegal downloading...

Spotify may not be the perfect solution, and perhaps there are many who are still too blinded by greed to see other opportunities, but we’re getting somewhere. For the longest time, record labels and lawmakers told us we were in the wrong for wanting our content given to us in a different way. But by embracing digital distribution and the new service models it can provide, they’ve seen their first sign of growth in thirteen years. It isn’t perfect, we all know things need to be improved and deals need to be better negotiated. I just can’t help but to think that we might be a little further ahead had the new age not been resisted for so long. [What Culture]

Spotify responded delicately (and rather vaguely) to Yorke and Godrich's protest. "Right now we’re still in the early stages of a long-term project that’s already having a hugely positive effect on artists and new music," Spotify told Tech Crunch. "We’ve already paid $500 million to rights holders so far and by the end of 2013 this number will reach $1 billion. Much of this money is being invested in nurturing new talent and producing great new music."

Carmel Lobello is the business editor at TheWeek.com. Previously, she was an editor at DeathandTaxesMag.com.

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