Living In the Future Part 1

If it ain't fixed, don't broke it.

Liz Pelly makes some great points about the intersection of music and tech in her recent book Mood Machine, The Rise of Spotify and the Costs of the Perfect Playlist.¹ It’s well established that emerging technologies have impacted music business and creation. Pelly takes the idea further by pointing out that music has simultaneously influenced and impacted technology. Music’s popularity creates engagement and, potentially, revenue for developing tech platforms. It’s the necessary content that flows through the pipes. For example, Apple didn’t build the iTunes Store to save the music business; Apple created it to sell hardware, namely the iPod.

Spotify got its start as a digital ad platform featuring music acquired from pirate sites. Licenses came much later. Just as apple capitalized on an opportunity to use music to sell devices, Spotify leveraged music to make money from advertising. The premium Spotify platform of today is a compromise between Spotify and some its earliest equity owners: the major music companies that held many of the copyrights necessary to offer a streaming service that offered virtually all recorded music ever made.

I’ve come to believe that creative music people can’t trust most technology companies. Tech platforms utilizing music have tended to extract value from music, resulting in devaluation. We’ve seen this happen consistently over the past 20 odd years. One could also argue - in fact I do argue - that tech companies saved our greedy, myopic, dysfunctional industry from self-destruction by introducing models such as iTunes and Spotify that resulted in a sort of re-valuation by creating new markets for music. Because, after all, any value in the space is better than “everything is free on the Internet.” That is, if you’re on the side of musicians getting paid, as opposed to “information wants to be free.”

In its earliest incarnations, Spotify simply made music available for consumption. It didn’t try to tell you what to listen to. More recently Spotify has created an algorithmic discovery platform to serve (or create) passive listeners with vibes and moods for work, exercise, and just chilling out - background music for all occasions. One of Pelly’s key arguments is that Spotify’s algorithmic models for “functional” music have devastated creative music communities, particularly what we have come to know as indie music.

As you’d expect, I have thoughts about this. First, let’s talk about Spotify’s user base. Most of Spotify’s users - in fact, most first-world humans - don’t really care all that much about music or musicians. “Lean-in” listening appeals to a minority of the population, music fans. That’s why Pandora blew up as a non-interactive online radio format. Most people want to keep music in the background. Most people who purport to love music have little interest in discovering anything new. They love familiarity. The “lean-back” experience is just fine for many of us. Not for me, and not for you if you’re reading this.

For those of us who DO care deeply about music - music fans, musicians, (most) music workers - is Spotify really the death of creative communities? First a reminder that Spotify is far from the only place to consume; isn’t even the biggest streaming service in the U.S. (that’s YouTube). Spotify is big but it isn’t the entire music business. Spotify’s influential model has clearly impacted music communities, but so have other technologies over the years. The indie community of the first decade of the Millennium came to exist as a result of disruptive technologies, namely MP3 sharing, MySpace, and personal blogs. “Indie” as we know it existed prior to the Millennium, as in the genre dominated by independent labels. Disruptive technologies gave rise to the blog rock era. The obsolescence of those very technologies brought an end to the era within a single decade.

For the record, I do not share Pelly’s opinion that the aforementioned blog rock era was some idyllic time of creativity and community. Tech changed the game, but we were still deep in the era of gatekeepers. For an artist to have success in indie world, first you had to win over critics. Shopping deals didn’t work anymore because, like now, an artist usually had to be anointed to get the attention of labels, publishers, agents, and managers. These days they rely on quantitative date measuring audience response. Back then they looked to Pitchfork Media.

Pitchfork set the tone for the entire music blogosphere, and the tone was toxic. If you don’t believe me, just ask Travis Morrison, Liz Phair, or Jet if they have any thoughts. Pitchfork had great writing, editing, deep expertise, and humor; but man the vibe sucked. They shit-posted and ridiculed even the most popular and acclaimed acts they covered. There wasn’t really any way to appeal to Pitchfork or blogs that followed their tone; they lavished a handful of acts with attention and utterly ignored everything else. The blog rock era was a nightmare for artist development.

It was the era of gatekeepers; Indie deals weren’t what would be considered artist friendly by today’s standards. Artists needed a label, and many well-heeled indie labels took full advantage. The vast majority of all record deals were multi-option, life of copyright, royalty deals. Some labels offered licenses and 50/50 profit shares. Pelly cites the 50/50 deal as some sort of gold standard of record deals, but that isn’t even necessarily a great deal from a major in 2025. Indie had dumb rules such as a general objection to licensing music for TV and advertising. I have a hard time believing that anyone opposed to music licensing really gives a shit about artists having the opportunity to make a living. If it’s about artists getting paid, at least let them be entrepreneurs.

Of course, the independent world is alive and well. Indie, as a genre, may be on the ropes, and if so it’s likely because of Spotify. Indie label sources note in Mood Music that music we’ve thought of as indie has been relegated to the less popular rock playlists, as mainstream pop has begun to populate the indie playlists. It’s as if Spotify is changing the definition of indie, which is now essentially a mainstream sub-genre dominated by major label product. Meanwhile, witnessing stunning indie (current business definition as in no label) breakouts like Shaboozey and Red Clay Strays has been inspiring. Let’s see…deals are better….lots of development in the independent sector…great music….maybe there is another dimension to this conversation!

The headline-grabber from Mood Machine is the Fake Artist Scandal, whereby Spotify populates its functional, passive-listener playlists with low-royalty library music from Swedish studio hacks punching a clock. If you didn’t expect this sort of thing, you haven’t been paying attention to the music business over the past 100 years. Every commercial platform in the history of the music business has found ways to limit their royalty burden. The broadcast radio industry has spent millions of lobbying dollars trying to remain one of the four countries in the world - along with North Korea, China, and Iran - to refuse to pay a royalty for playing recordings on the air. Virtually every record company audit finds money owed to the artist, once the artist can afford the exorbitant cost of an audit. It’s the playbook.

Soon, I believe, most functional music will be from generative AI, further reducing the cost, and hardly anyone will care. What’s the difference between Swedish hacks pretending to play classic jazz and an algorithm? I’d bet on the AI for a higher quality product. Musicians will care, like so many who will soon lose their jobs to generative AI. It is real tragedy, but I believe it won’t displace all musicians. Real artists with real fans won’t be displaced. Their work will become significantly more valuable as training data for future AI. That’s the future - passive listening and active listening will become different businesses. As a longtime devotee of the Artist Business, that’s why I’m leaning in. That’s why artist development is SO important.

With that intro, let’s talk about Discovery Mode. Discovery Mode is a program whereby a rights holder agrees to take a reduced royalty for algorithmic plays in exchange for greater push on the platform through algorithmic programs such as Radio. Pelly frames Discovery Mode as a form of Payola, meaning pay for play schemes for broadcast radio airplay. I disagree with this characterization, and with her framing of Discovery Mode as a wholesale disaster for artists. I’d prefer that they didn’t turn it into a profit center for Spotify, but I have found it useful in artist development.

I looked up Payola in the dictionary, and here’s what I found. Payola is “[t]he practice of bribing someone to use their influence or position to promote a particular product or interest.” A bribe. What’s a bribe again? A bribe is “Persuading someone to act in one’s favor, typically illegally or dishonestly, by a gift of money or other inducement.” It is hyperbole to call Discovery Mode Payola, because by that definition DM is NOT Payola! It’s a promotional offering on a platform that is open to all INDEPENDENT artists. It isn’t offered to projects on major distribution platforms.

In 2015, Pitchfork sold to media giant Condé Nast after a long decline in relevance. This ad, featuring an act that competed on America’s Got Talent, is all you need to know about how it’s gone since the sale.

Here’s what I can tell you as someone on the front lines of indie artist development today. I’d gamble on Discovery Mode over Pitchfork any damn day. Pitchfork was a net negative for artists, because it unfairly clogged the gates for many artists who deserved a shot. Indie label heads interviewed in Mood Music actually complained that DM leveled the playing field. “We have to do it because everyone else does it.” This means they are losing a competitive advantage to self-release artists, which in my opinion is a GOOD THING. God, what a self-own. Independent labels should only exist if they bring value to artists. If tools are available directly to artists and not gate-kept by labels, then labels have to do better or get out of the way.

When I talk to developing artists about DM, always taking time to explain the royalty reduction, they almost always opt in. It’s a competitive edge over some major label projects that gets music in front of a streaming audience. Once it’s pushed out to an audience, it becomes more effective when listeners respond in positive ways - listening to the end, saving, sharing. I’m helping a hobbyist artist right now, a guy with a career and a family, who has had millions of streams on his self-released album since opting in to DM and other promotional programs Pelly cites as anti-artist. He rarely posts on social media and he’s never played a show. His music reaches hundreds of thousands of listeners each month, largely from listeners who discovered his music via algorithmic push. Are there any actual fans who’d pay for a ticket or buy a T-shirt? I don’t know, definitely some. But I do know there’s a line of record labels, including majors, trying to get in on the conversation. It works because - in my subjective opinion - the music is great. But objectively, it’s connecting with an audience that’s actively seeking out new music on Spotify.

Nothing in Mood Machine is false or dishonest in the slightest. It’s an important conversation. As noted in the book, those fat cats at Spotify are getting fatter, with Daniel Ek currently wealthier than any living musician. He’s a disruptive tech entrepreneur, and he’s great at it. He has become incredibly powerful in the music industry, and he’d probably achieve that status in any industry he chose to disrupt. Spotify an imperfect model from an imperfect company, in a deeply flawed industry that’s never had anything approaching a perfect model for artists. If you’re shocked by the revelations in Mood Machine, you’d be horrified if you knew how major labels have operated for a century.

Grotesque wealth of it founders and top executives aside, I’m not really convinced the streaming model is as extractive as the marketplace for physical products. Spotify has acquired wealth from scale, not from brutal revenue splits. The record label industry standard for decades has been about 80/20, label to artist. Spotify’s model is something like 70/30, rights holder to Spotify. 70% is passed through and subjected to the label’s royalty split, which is similar to physical distribution. If you take the label out of the equation, the artist gets 70% of the money.

But what about not paying artists on the first 1,000 streams? I’m a hobbyist artist. That policy directly impacts me. I don’t agree with the program, but it won’t get me off Spotify, either as an artist or as a listener. It doesn’t matter all that much to me because I’m not advocating for artist who are mad about not getting paid on relatively tiny numbers of streams. I’m in the business of helping artists build a real audience that will become lucrative in today’s business. I’m not an activist railing against Spotify because I want to have a good professional relationship with Spotify, just as I want to have a good relationship with major labels, publishers, and management companies. It’s how I do my job. If I feel a platform is so anti-artist that it shouldn’t exist, then I’ll become activist. That’s how I feel about Suno and Udio (as I’ll no doubt rant in future posts).

The number of active recording artists is exponentially bigger than it was when my band made our first album back in 1987. I remember how impressed everyone was when my band made a CD in 1989. Now, a significant majority of music creators on platforms aren’t even trying to gain an actual audience. It’s something special when a small artist grows an audience because there is so much competition and noise online. In the consumption era, artists get paid when they reach an audience - even a completely passive, algorithmic audience!

Pelly notes various solutions to the problem of streaming destroying music communities and economically crushing artists such as union organizing, legislation, and basic income. I don’t want to speak out of turn, because I’m all for any of these options to serve the interests of artists. I think if we’re at the point where the government would provide basic income for musicians, then we’re at the point where it should be given to everyone. I’ve personally observed plenty of musicians who don’t bring joy, inspiration, or meaning to anyone else, BECAUSE THEY ARE HOBBYISTS and if they were honest they’d admit it’s for their own joy and satisfaction. I’ve long believed that simply playing music, even at the professional level, doesn’t entitle anyone to income - even if they spend a lot of time doing it! I’m a strong believer that professional musicians should be paid for their labor, but ONLY if it is actually valuable to someone.

I am deeply concerned about real musicians who have dedicated their lives to their craft losing their livelihood to AI. I’d be more concerned about musicians struggling on streaming platforms had I not observed so many instances of independent artists building amazing real-life, ticket buying audiences solely from social media and streaming. In my experience, in many ways, algorithmic gatekeepers are better than human gatekeepers because algorithms aren’t programmed go be assholes. An algorithm won’t give your album a 0.0 rating, it will simply ignore you. It’s a wonderful time for artists with an audience, and there are so many more tools available to developing artists to build their audience. I find this to be, comparatively, a golden age for artist development after a particularly garbage time during the Blog era. And I worked with some of the era’s biggest winners.

It isn’t great that passive listening is becoming more and more automated, but it’s probably inevitable. As Pelly notes, that industry is an evolution of the Muzak model - not exactly sexy. The Artist Business, that’s where the action is, that’s the sexy part or the business. The game is changing so that developing artist can use the tools of streaming and socials to find real fans, and then you give those people all of the humanity you can pack into a song or album or show. Real fans don’t want AI replicas of human music, they want as much humanity as their favorite artists will provide. That’s a business that won’t be disrupted by tech platforms and AI. The more technology seeks to isolate us, we will increasingly build community through music.

1. As a funny aside, I listened to the book on Spotify as part of my premium subscription.