2016-02-02T00:08:16+00:00 2016-02-02T13:28:22+00:00

How much can you pay Spotify to become a platinum artist?


Using streaming services to consume our music is a way of life and just too big to ignore, but somehow the music industry's measurement of an artist's popularity is about 15 years behind. The outdated measurement of physical albums sold was no longer relevant with the introduction of Napster back in 1999. In the era of music platforms like SoundCloud, many musicians release new tracks to a global audience the same day their work is finished. (Yes, we still fully acknowledge the work that goes into producing a full album).

Today, the Recording Industry Association of America (RIAA) , who have been entrusted with presenting platinum and gold certificates since 1958, announced the inclusion of on-demand audio and video streaming, along with the traditional album sales, in awarding a record platinum or gold. Besides being incredibly late to the scene, these new changes actually generates a substantial amount of new concerns.

The RIAA announced that 17 artists have been awarded with newly designated gold or platinum record titles: Kendrick Lamar's To Pimp a Butterfly, Big Sean's Dark Sky Paradise, and Coldplay's Ghost Stories to name a few (the Weeknd's Beauty Behind the Madness went double platinum but that's rightfully so). Even with Kendrick’s album now platinum, CEO Anthony Tiffith – of his record label, The Dawg Entertainment – took to Twitter with his disapproval, saying, "We don't stand behind this RIAA bs."

First, how do these new changes work? Here’s a simple breakdown:

1,500 on-demand audio or video streams = 1 album sale.

(On-demand streaming refers to services like Spotify and Apple Music, not internet radio sites like Pandora.)

Here are 3 major problems from this change. 

1) The RIAA's announcement didn't include any explicit details on how the 1,500 streams will differ if one stream of a hit track will count the same as one stream of a full album. Will 13 plays of just the hit single count the same as playing the full 13-track album?

2)  "Payola" is the shady practice of paying radio stations cash under the table to put certain albums and tracks into their rotation. It was outlawed in 1960s but that doesn't mean it went away. This pay-for-play still exists in promotional forms we like to call “record studio lobbying." Still, the number of times a disc jockey played a track wouldn’t count directly as an album sale. But what's to stop Spotify teaming up with Sony to direct people to certain artists or strategically insert tracks into top playlists? Nothing actually.

In a detailed report released in 2015 by The Verge, a contract was obtained between Sony Music Entertainment and Spotify concerning the streaming service's license to utilize Sony Music’s catalog. The contract highlighted the various ways Sony pays to have their music streamed to the sites 20 million paying subscribers. At the time, the major conversation in the music industry was focused around how much (or how little) artists were being paid from the amount of times their music is played. However, there is one section that now pertains to the current conversation at hand:

“..it (Spotify) is also required to give the music label free ad space on its service. The "credit for advertising inventory" clause mentioned in section 14(a) grants Sony Music a total of $9 million in ad space ($2.5 million in the first year, and $3 million and $3.5 million in the subsequent years).”

“..in section 14(p), the contract states Spotify must offer a portion of its available unsold ad inventory to Sony Music for free to allow the label to promote its own artists”

Basically, streaming services became even more powerful.  

3) In 2004, Prince went on tour promoting his Musicology album. He included a copy of his new album with the ticket price and every fan was given a copy of his album when they arrived at the show. Every one of those albums counted toward his total Billboard and SoundScan (a point-of-sale tracking system) numbers – a very backward way of getting into Billboards "Top 100." Thankfully, people caught on quick and regulations were put in place to prevent that but what about free digital download codes? How are we regulating those? Even worse, if you remember when Apple had their iPhones automatically including that recent U2 LP, were those albums included in their final measurements as well?  

Cary Sherman, CEO and chairman of the RIAA, released a statement:

For nearly six decades, whether it’s vinyl, CDs, downloads or now streams, the Gold & Platinum Program has adapted to recognize the benchmarks of success in an evolving music marketplace. We know that music listening—for both for albums and songs—is skyrocketing, yet that trend has not been reflected in our album certifications. Modernizing our Album Award to include music streaming is the next logical step in the continued evolution of Gold & Platinum Awards, and doing so enables RIAA to fully reward the success of artists’ albums today.

The music industry continues to evolve alongside technology. Unfortunately, the way it does business is too slow to keep up.  RIAA will need to provide further details on how they expect to lay out explicit measurements for streams coming from clicked ads, digital download codes and more. 

With all of these changes and new concerns, we also need to ask the bigger question: Do people really even care about "platinum" any more?

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