A tight Spotify: Is there a better way to make music streaming sites pay?

From The Independent:

Depending on how poetic you’re feeling, you might describe music as a gift, a best friend, a sanctuary, or a universal language that unites us all. Its emotional worth is undeniable, but figuring out its financial worth has, since the rise of digital media, become a conundrum. Easily shared, enthusiastically copied and covertly distributed, digital music has distorted traditional economic patterns into shapes that the music business has had huge difficulty interpreting.

Spotify, originally founded in Sweden by Daniel Ek in 2006, was one attempt to bridge that gap between unprecedented demand and reluctant supply that had caused music piracy to spiral out of control; its model of free, advertisement-funded streaming on-demand (with monthly subscriptions for loyal users) was hailed as a master stroke.

Until, that is, the first royalty statements started appearing. In November 2009, a startled music industry heard that Lady Gaga had received a mere $167 for a million Spotify plays; the company quickly responded that these sums were misleading – but, crucially, it wouldn’t provide more-accurate figures. Its royalty rates continue to be obfuscated by non-disclosure agreements, while the amounts ending up in artists’ pockets are eroded further by harsh clauses in their recording contracts – some of which were signed in a pre-broadband era when the word “streaming” was understood only in the context of colds and flu.

Continue reading the rest of the story on The Independent