How Spotify shapes how we listen to music
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This is On Point. I'm Anthony Brooks. When Spotify launched in 2008, it promised a brave new world of nearly universal access to music for just a few dollars a month and a robust business model for the big recording companies. It also promised musicians a fair cut of the action. So how's all that worked out? Well,

Well, Spotify has delivered huge profits, billions of dollars, to an increasingly consolidated recording industry, including hundreds of millions of dollars to its CEO, Daniel Ek of Sweden. But hardworking independent musicians have ended up with just fractions of pennies per download.

Not cool, says music critic and author Liz Pelley, who says Spotify has also dumbed down the way millions of us listen to music. Computer-generated algorithmic playlists deliver round-the-clock background music, what Pelley calls neo-musac. Frictionless, easy listening that's killing our ability to explore and develop individual musical tastes.

It's what happens, she says, when we place too much faith in over-eager tech entrepreneurs who claim their new apps will fix everything. This hour on Point, Liz Pelley and her book Mood Machine, The Rise of Spotify and the Costs of the Perfect Playlist. And Liz Pelley joins us now from New York. Welcome, Liz. Great to have you. Thank you.

Hi, Anthony. Thank you so much for having me. Yeah, it's great to have you. I've really been enjoying the book. It's provocative and really important, I think. Before we get to some of the big questions that you raise, take us back to the mid-2010s when you were working as a music journalist. What launched your interest in this subject?

I became really interested in researching Spotify at a time when it became really clear that the idea of independent music was changing. So I'm a person with a background in music journalism, but also a longtime participant in independent music scenes and independent music scenes that phrase has always articulated something having to do with independence from the major record labels. But this was a time when

What it meant to be independent, it was becoming clear also needed to involve some sort of interrogation of these big tech companies that the major labels were increasingly making their partners. So from my perspective, it was this question of if the concept of independent music is to hold any weight in the mid 2010s, we should also be thinking about

these big tech companies and asking hard questions of them. Right, right. So walk us through Spotify's origin story. Some of us remember the pre-Spotify world of Napster. There were big concerns about music piracy. But along comes Spotify, born in Sweden. What did it promise to listeners and to independent musicians that you are referencing there with a lot of concern?

Yeah, I mean, I think we should really understand the story of Spotify and music streaming more broadly. And in addition to understanding the promises made to listeners and the promises made to musicians, we also need to understand the promises made to the music business. Because the reason why this model was able to take hold to begin with was because the mid...

2000s was a time where the music business was really looking for new models, new revenue streams. It was years, for years and years, the music industry had been looking for solutions on how to quote unquote, you know, solve the problems that had been brought on by the era of file sharing and piracy. 1999 was the year when the, you know, CD era reached its peak.

and the global recorded music business during that year was worth $39 billion. And in the decade that followed between 2000 and 2010, the recorded music business watched its profits from the sale of physical media decline by over 50%. So the music industry was looking for solutions and

If you talk to people who worked in the music business at the time, you know, owing in part to the fact that the record labels were watching music become this sort of more ubiquitous commodity, a lot of people who worked at the labels and in the business sort of seemed to believe that subscriptions were going to be, you know, as one major label activity.

Former major label executive put it to me, subscriptions were going to be the savior. It was just a matter of when the right company came along. So by the time Spotify was created, the company was created in 2006. They launched in 2008 in parts of Europe.

there had been a handful of streaming services that had tried and failed to take hold. So the major labels had created their own streaming services. You had services like Rhapsody. There's this company called iMeme, MySpace Music.

AOL Music, all these different efforts. And, you know, if you listen to people who were in the industry at the time, there were a bunch of different reasons why Spotify specifically was able to take hold. Right, right. Well, let's hear a little tape. So as you mentioned, Spotify officially launches in 2008. And here's Spotify founder and the CEO, Daniel Ek,

who later said that the platform had a single ambitious but clear mission. And that is to bring all the world's music to everyone in a way that's great for fans and great for the artists that create the great music. And this is now a reality.

And this is now reality. So great for fans and great for the artists that create the music. You write that what we actually got were playlists heavily dominated by major label acts. So who were the big winners in the rise of Spotify? And certainly not the artists, those independent artists that you were referencing early, right?

I'd argue that the winners were the platforms themselves, so Spotify, other streaming services, and the winners were major labels. Something that I write early on in the book is that it didn't take long into the streaming era to realize that this question of saving the music industry wasn't exactly the same thing as saving music.

You know, in order for a service like Spotify to exist, but really any streaming platform to exist, for a consumer to be able to have the experience where they open an app and they can search for any song in the world. You know, people who are really into music will tell you that these platforms don't have every song in the world. But the vast majority of what you could think of when you think of the history of popular music is

In order for that product to become a reality requires the participation of Sony, Warner, and Universal Music Group. They have to sign deals with these platforms saying you can have our content in exchange for, you know, in the first negotiations, it was massive advances, equity in the company, etc.

free advertising and other perks like that. So because of the outsized negotiating power that these three companies have, you know, when Spotify launched, it was more than three, but music industry consolidation has created a situation where now there's three major labels that sit on the rights to most of the music that people think of when they think of the history of recorded music. That puts them in an outsized situation.

Right. And so the artists, the independent artists are left with very little. And can you explain a little bit about how artists are actually paid? You have a chapter entitled The First Artists.

0.0035 is the hardest. And the name of that chapter refers to 0.0035 of a penny, which is what musicians get per download. So what kind of pay does that actually add up to? If you talk to many, many, I'd say most independent musicians, they'll tell you that it doesn't add up to a very meaningful amount.

amount of revenue. So something that's really important to understand is that musicians in the streaming era are not paid per stream and they're also not paid directly. So, you know, like I just mentioned, these companies that have the deals with the streaming services, Sony, Universal, Warner, they're considered the rights holders. So

anyone who wants to get their music onto a streaming service has to have the music delivered to the service through a rights holder. So that might be your label. If you're on an independent label, a lot of the independent labels go through this company called the Merlin Network. Or if you're a DIY musician, you might be going through a company like DistroKid or CD Baby. And those are the companies that hold the contracts with streaming services. And then those rights holders in turn hold contracts with

artists. And the payments are made to the rights holders based on a really complicated revenue share model called pro rata. So if you are a major label and your catalog in a given royalty period is

accounts for 20% of all the streams that happened on the platform, you would be entitled to 20% of the eligible royalty pool according to your contract with the streaming service, what that contract dictates the eligible royalty pool is.

So you'd get your slice of the royalty pie, and then according to the contracts that you have with your artists, according to a usage report that says how many streams each artist got, then the label or other rights holder then in turn pays the artist. So it's very complicated. Complicated. And what I learned from you is it leaves a lot of people not getting paid at all.

Excuse me. I mean, I'm reading that the service recently instituted a policy in which a track that gets fewer than 1,000 streams in a 12-month span earns no royalties at all. And according to some estimate, that applies to like two-thirds of the catalog. I mean, that doesn't sound like a very good deal for lots of folks.

Yeah, and something really interesting about that new royalty model that I think is really illustrative is that that policy gets referred to as part of the artist-centric royalty scheme. And it was a vision for the future of Spotify that was put forth by Universal Music Group. And according to reporting in the Financial Times, the

A couple of years ago when Universal Music Group renewed its contract with Spotify, they required that this art-centric vision of streaming be adopted as part of their contract negotiations. And I think in some ways it proves or illustrates how much influence the major labels continue to have over not just how streaming works for them, but how streaming works for everyone. Yeah.

Right, right. We're discussing the rise of Spotify streaming service and how it's changed the way millions of us listen to music and how little it pays its independent musicians. We're talking to Liz Pelley. She's the author of Mood Machine, The Rise of Spotify, and The Cost of the Perfect Playlist. And we're going to take a break. But when we return, we'll talk about what Spotify has done to the way we listen to music, according to Liz Pelley. Stay with us. I'm Anthony Brooks. This is On Point. On Point.

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A recent episode dives into potential solutions. Follow wherever you get your podcasts and stick around until the end of this podcast for a preview of the episode. And let's get a perspective on Spotify from a working musician. It's good and it's bad and it's helpful and it's...

Good, bad, helpful, harmful. That's Aloe Blacc. He's a Grammy-nominated artist also known for the Avicii collaboration Wake Me Up. He says Spotify is complicated. Blacc started his career decades ago when listeners could find his music on the radio through friends at school or in record store listening booths. He says that organic discovery offered a kind of magic that Spotify lacks. Now the discovery is

Coming from an algorithm that basically perpetuates the same kind of sound and thoughts and ideas based on what they think is going to make you happy and continue to consume, which isn't really the same thing as a true discovery as you would in reality.

in real life. And I think that kind of is a gatekeeping function. Black also takes issue with the payment structure of Spotify and other streaming services. Millions upon millions of people pay their subscription, and all of that income goes into a bucket. And then it gets doled out on a pro rata basis, artists based on streams. And the artists with the largest amount of streams will get the largest percentage of that

of that subscription income. It robs an artist of being able to make a living as they would have in the past. According to Black, Spotify's streaming model has reshaped how many musicians make their music, which in turn shapes what music reaches listeners. That's because artists don't get paid for streaming a song unless it's streamed for at least 30 seconds. The results? Musicians focus a lot of their efforts on the beginning of their songs.

Because now the artist is compelled to quickly retain the attention of the fan or the consumer, the listener, by doing dog and pony tricks that may or may not have anything to do with the art. And in some cases, it's not art. It's just a dog and pony trick.

just to make the algorithm work and the payment tick. Even so, Black says Spotify offers something important to both musicians and listeners. There's this carrot in the promise of visibility and awareness and amplification, and then also just ease, you know, frictionless platform to be able to get the music to your audience or an audience.

the care for the consumer is access to every single song ever made in the world. That is quite attractive.

That's musician Aloe Blacc. His most recent album, Stand Together, was released this past February. Liz Pelley, a couple of things in there that I want to talk to you about. Aloe Blacc used the word frictionless, and that's an idea that comes through in your book, that the way we listen now is becoming increasingly frugal.

frictionless. I mean, these playlists are set up with an algorithm. It doesn't really require a whole lot of thinking on our part or selecting in the old way that we used to sort of curate our music collections. What do you make of that? You write a lot about this in your book.

That was a really interesting clip because I definitely, I think I'm a person who agrees that there's no issue with technologies that are contributing to making music more accessible or more universally accessible. I think that music being more accessible,

is a good thing, but from my perspective, it's actually this sort of obsessive pursuit of frictionlessness as part of the business model in conjunction with the business model that I think has been really disastrous for culture. Especially like when you think about this in the context of the broader platform economy, like, you know,

social media platforms have certain tricks or ways of influencing news feeds in order to engage users and to boost engagement. And when you look at streaming recommendation and streaming personalization and the way these systems have evolved, it's been really with a similar goal in mind, you know, to hook you on the platform for as long as possible. These sort of algorithmic recommendation systems have

They're all different, but in a lot of cases, they're optimizing for things like keeping you on the platform longer, extending session length, you know, sort of hooking you.

And I think that that has a lot of consequences. Yeah. I mean, one of the consequences, it seems to me, is it just makes us much less involved in the music that we're listening to. I mean, I'll talk about my own experience with Spotify for a moment. And I'm going to confess to you, Liz, that I subscribe to Spotify.

I used to be someone who spent probably too much money and too much time in record stores and then CD stores. And I would talk to owners of stores, to anyone I could. I'd sort of take gambles and buy stuff that didn't work out. But in that exploration, I sort of learned about music, which was sort of a hobby of mine. But in this age, I don't do that anymore. And I depend too much on Spotify. And I...

I don't like what it gives me. I mean, I'll start with an artist that I like, and then I'll allow Spotify to sort of generate the playlist for me, and it just goes nowhere. But the problem is, because it's so easy, because it's so frictionless, because I can start making dinner and open it up on my phone, and there it is, hit play, I spend a lot of time listening to it and being frustrated by it. So that's my experience. Does that resonate with you?

It resonates with other things I've heard people say. You know, something that came to mind while you were speaking is for the book research process, I interviewed a lot of former Spotify employees and people who have worked in the music business around streaming. And one of the most

from my perspective haunting interviews that i did during the research process or one of the most haunting things i heard someone say was this quote from this former spotify employee who told me that the goal of their playlist system is to get users to um it's to reduce the cognitive work that users have to do when they open the platform and you know this idea being you open the platform and you get the perfect recommendation every time

And as a music journalist or critic, you know, person who has worked in independent radio, I think that when I hear reduced cognitive work, I think, you know, the goal is to get users to think less or to not have to think as much when they are selecting their music or going to listen to some music. And as a critic, you know, I think of criticality.

criticism as another way of saying thinking and I want people to think about music you know that experience you just described of like going to a record store talking with people you know following curators and critics whose taste you trust like you know these are these sort of like frictions that not only like

help us to learn about music, but also are sort of where connections to music and music history and context are made. Yeah, you know, so much of thinking about the way in which streaming has changed not only music, but has attempted to reshape how we find music really quickly.

gets back to this bigger picture of like context and in what ways do we want music to be contextualized? And in what ways does context like serve and not serve musicians and listeners? So let's hear from a couple of listeners. Here's Mark Knotts. He's a truck driver out of Providence, Rhode Island. And he says Spotify has actually become a big part of why he loves his job. Spotify. Yeah.

actually has changed my listening habits quite a bit. They know my listening style and they know what I like and they send me stuff that I might like. And some of it I do, not all of it, but some of it I've found some new favorites.

So Spotify has helped my love for music. But here's a different perspective from Mohamed Mack. He says his music collection was at its high point during the heyday of software sharing sites like Napster and LimeWire. Mack says he built a reputation as a good music curator and a mixtape specialist, but now he's worried that Spotify has diluted his taste.

Every time I send a friend a song or make a mix on Spotify, like a playlist,

Invariably, my friends always tell me they've heard the songs before. So we're all listening to the same music. The algorithm is having us listen to the same music. And when I turn on sort of the recommendations for Spotify, it's always songs that all belong to the same genre of music. So that last point, Liz, I really want to sort of you to expand upon. And let me start...

I want to talk about playlists. And let me start by asking you to explain where the title of the book comes from, Mood Machine, The Rise of Spotify and the Cost of the Perfect Playlist. Where does that come from? So the phrase mood machine, you know, I think that when I was thinking about that phrase, I was thinking about a few things.

One of the things that's been really interesting to me over the years is the way in which streaming curation has sort of ushered in this era where for a lot of users when they're choosing music, they're thinking less about an album or an artist they might be seeking out and instead are selecting music according to these mood playlists, like a

study vibes playlist or chill vibes playlist or some morning wake up music or wind down soundscape. And then the machine side of things, I was thinking about what are the impacts of this kind of rise of Neo Muzak or this rise of what the industry calls functionalization.

functional music listening on artists and in which ways does this system just sort of like squeeze listeners for data, squeeze musicians for revenue. So thinking about both of those things. But you know, it is, I think it could be also useful to remember where the streaming playlist

ecosystem even comes from because in the early days of streaming services, the experience of using streaming was more like a search bar. You'd have to know what you wanted to look for. You would have to know what kind of artist or album you were searching for. And it was really a couple of years into the existence of Spotify when they were trying to

grow their user base and expand beyond just like the enthusiasts that they introduced this concept of first the editor curated official Spotify playlist. So things like your favorite coffee house, today's top hits like morning commute. And then eventually also

the concept of an algorithmic playlist. So, you know, things like Discover Weekly or Release Radar, these sort of personalized daily mixes, things like that. Yeah, I mean, it really raises the question, who's making the decisions about what we're listening to? I mean, once upon a time, we were making those decisions. But we're leaving that, as you said, to these algorithmic calculations that tend to homogenize so much of the music. We heard that in that listener tape earlier.

Related to all this, and you write about this in the book, and I want you to explain it to our listeners. Talk about ghost musicians and how they contribute to sort of what's going on at Spotify. So this is a story that I wrote my first article about Spotify. It came out in 2017. And almost immediately, as soon as that article was published, I started hearing from people who worked in music.

at independent record labels around the music business saying you have to research these fake artists on spotify and at the time there were some uh reporting that had already come out on this i think it was as early as 2016 music business worldwide had which is one of the music industry trade publications had published an article reporting that sources in the music industry were saying spotify was filling its

popular playlists for studying, relaxing, sleeping with these so-called fake artists that didn't exist. Spotify always denied that they were creating these artists themselves, but didn't really deny that there was perhaps some sort of broader arrangement at play, which I think really made people continue in the industry, continue to be interested in this.

So when I started working on my book, I knew I would have to do some interviews around this. In 2022, the Swedish daily newspaper DN was able to get some copyright documents and they were able to reveal that there actually was this small handful of songwriters who were responsible for dozens of tracks, sorry, dozens of artists monikers.

thousands of tracks across the platform that were getting placement in these really popular Spotify playlists. But they were all under these monikers for artists that didn't really exist. Right. And so what's the purpose of that? I mean, how is that benefiting Spotify by sort of employing these sort of ghost musicians who are pretending to be someone else or who are sort of invisible but creating lots of content for the platform? Right.

So through my own reporting, what I was able to unveil is that internally at Spotify, they actually have a phrase that they use to refer to this type of music. They call it perfect fit content. And their internal definition for it is music commissioned to fit certain playlists and moods with increased margins. So

that signals that this is some sort of cost-saving initiative internally at Spotify. So they actually work with this handful of production companies who then in turn commission the music from composers. And it seems through the reporting that I was able to do clear that there is a different type of

you know, royalty deal worked out for these production companies. So we've got a couple of examples of this. So this track is "Therament" by the artist listed on Spotify as "Zephyrical." And it's one of the songs identified, as you mentioned, perfect fit content by the Spotify team. And this means it was commissioned by Spotify to fit certain playlists or moods. And this song has been streamed more than 23 million times.

All right, so here's another example. This next song you're going to hear is Stress Reliever by Tuscany Flow, and it's been identified as a track commissioned by Spotify to fill its playlist. The song has more than 31 million streams. Here it is.

All right, so Liz, this is what you refer to as the neo-musac or part of that sort of neo-musac thing. It sounds like it's music designed to put your brain to sleep.

Yeah, absolutely. And I think these are examples that would come from a sleep playlist or a relaxation playlist, which is one of the areas that this practice is most prevalent in, but it also impacts...

genres like jazz, neoclassical, and lo-fi hip-hop beats as well. Hold that thought, Liz, because we're coming up against a break, and we're going to come back and pick right up where we are right now. So we're discussing Spotify's rise as a streaming platform, what it means to musicians and listeners with Liz Pelley. I'm Anthony Brooks. This is On Point. We'll be right back.

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I love Spotify and it has completely changed my relationship with music, both as a listener and as a consumer. Spotify, yeah, how to screw songwriters and musicians. I feel like Spotify is disappointing me. I find myself listening to the same artists.

just in a different order. You know, it keeps serving me up playlists of the same bands that I like and just on repeat.

I love Spotify. It is my main source of music where I keep all my various lists. It has actually broadened my music agenda. I've been a subscriber to Spotify for about six years now, but no longer. I've just been hearing the same stuff over and over again.

A range of views there from On Point listeners Murphy Pisa, Don Roland, Miriam Hardwood, John O'Brien, and Stephen Holder. They're just a few of the 675 million active Spotify users, according to the company's data.

And by the way, we did reach out to Spotify asking if someone from the company would join this discussion. They sent back a statement that says that Liz Pelly's book contains inaccuracies and misinformation throughout. Unfortunately, Spotify was not contacted for fact-checking from which we could have helped clarify or even comment. So that's what we got from Spotify.

Liz, Peli, before the break, we were talking about ghost musicians, and that inevitably leads to the next level of concern around the rise of AI. And you write that Spotify has experimented with an idea called Soundscape, an endless AI-generated, personalized, ambient stream of music. Sounds delightful and horrible. Tell us about that.

Yeah, so that was while I was reporting my book. That was one of the things that I came across in my review of internal...

But it kind of seemed to be just sort of like an extension of the broader ghost artist scheme that we were talking about earlier, where they work with these production companies. And to be clear, these production companies that they work with then commission music from composers that they sort of crank out, you know, dozens of tracks in an hour for these mysterious, like lower royalty rates. And...

It has a lot of impact, I think, both on listeners because this type of music is not labeled at all on the platform. You're being, in some cases, served tracks that you're being served due to an ongoing commercial deal without having any indication that that's the case. And then it also has impacts on musicians because...

They are, well, one being left in the dark about a lot of the terms under which their work is being commissioned. Like I had the chance to interview a handful of these, quote unquote, you know, what I refer to as ghost musicians. And I specifically refer to them as ghost musicians and not fake musicians because I want to be really clear that these are

musicians who are being commissioned to make this music. In most cases, I was finding that it was not generative AI music. I was finding that it was actually composers being commissioned by these production companies.

And, you know, yeah, they're also being commissioned under unfavorable terms where in some cases they're being asked to give up certain royalty rights and, you know, different terms depending on which company they're working with. But it's equal concern on both sides of those equations. And also, you know, from my perspective, one of the biggest issues of this

this whole phenomenon is that this type of material is not labeled at all on the platform for the listener. And I should say that it's not the only type of material

commercial deal that influences the type of music users are being served that without being labeled, another would be the payola-like practices more broadly. Right. Okay. So one of the big—I want to move on because our time is running short, but one of the big questions you pose at the end of your book is one that I think a lot of people want an answer to. You know, if you care about being fair to working musicians—

What's the ethical alternative to Spotify? It's not a simple question, I know. And before you answer that, if people are concerned about a lot of these issues that you raise, should they disconnect from Spotify, cancel their subscriptions? Do you take a position on that?

I specifically, there's no point in my book where I say, "Everyone delete your accounts." And part of the reason for that is that I specifically am of the belief that consumer boycotts should be called for by mass movements, not by individuals. So if there was a mass movement of organized musicians who were specifically organizing a boycott of one company, I would

report on that, but it's not something that I specifically recommend. And also because, like I say, I write in the book, you know, I think the...

equation for how to contribute to a more sustainable cultural ecosystem is much more complicated than just choose this app rather than this app or go here instead of here. I definitely do think that in the current media landscape for fans who really want to support musicians, especially independent musicians,

The most direct thing that you could do is buy music directly through artists or support artists directly through other means. And also, you know, oh, yeah. No, sorry. I didn't mean to interrupt. But I mean, related to that, you outline a couple of alternatives, at least, well, a handful of alternatives toward the end of the book. And one is this sort of so-called collective approach, right?

You talk about something as an example, the catalytic sound, a collective of 30 musicians. So it's a small operation, but it provides a workable mode to stream music and treat its musicians fairly. So give us an example, an explanation there. How does catalytic sound work?

So one of the things that I write in the book is that one of the problems with the streaming landscape is this idea of a one-size-fits-all solution for all artists and musicians. And in imagining alternatives, we should think about what types of solutions would work for different types of musicians and musical practices. And catalytic sound, I think, is one example of that.

collective of 30 musicians, mostly from the sort of free jazz and avant-garde music scene who have come together to create this website that is as much like a collectively run merch booth as it is kind of like a collectively run digital archive of music. And if you pay $5 a month, you can get access to

all of this music by these 30 artists, plus music that they make specifically for this website. And rather than paying the musicians in the collective per stream, they take the pool of money and they divide it up equally 30 ways amongst all of the participants every month, which

I think is really interesting for a lot of reasons, one of which it being that it's a way of modeling what a streaming platform or some sort of subscription service could look like that kind of

gets away from the per-stream valuation of music. You know, one of the things that is so unfair about streaming economics for certain types of musicians is this idea of the per-stream valuation of music. There's so much music that so many of us find to be valuable or meaningful that we wouldn't necessarily keep on looping the background all day while we're working or eating dinner, etc.

Yeah, but you want it and you should have it and you want to go to it when you decide you want to go to it. Another intriguing idea that's underway in some cities is streaming services run by public libraries. And you write that it's underway in Seattle, Austin, Pittsburgh, Minneapolis, Eau Claire, Chapel Hill, Salt Lake City, Denver, among other cities. So tell us about that model. So something that is really interesting to me about the library model. So these are cities where the public library has invested funds in creating these pretty basic...

pretty bare bones, oftentimes browser-based streaming programs where they'll do an open call every couple of years for local musicians to submit their records. And then they'll have a kind of jury of people involved in the local music community choose a selection of albums to add to the service. And then they'll pay a flat fee to those musicians in order to have their music licensed.

for a couple of years and then it's free to stream or library cardholders can download it. And something that I really like about this model is that it

kind of provides an example of what it would look like if people in local communities had a say in being involved in the creation and governance and operations of digital tools that they rely on in their everyday lives. It's also a very technologically simple solution. You know, these are not like

complicated tech projects. These are ways of taking a pretty basic setup, like this basic streaming service. It looks pretty similar to Bandcamp. Most of them look pretty similar to Bandcamp. What's innovative about it is not necessarily the streaming service on a technological level, but on a social and cultural, political level, economic level. Yeah.

There's another aspect in all this, and I'm really curious to hear you talk about that, and that is legislative efforts to address the unfairness that musicians are dealing with. And I wanted to ask you about the United Musicians and Allied Workers, a music industry trade union formed in 2020 that's lobbying members of Congress on behalf of musicians. And they're pushing something called the Living Wage of Musicians Act.

Is there something in the legislative approach that could make things better for folks trying to make a living on platforms like Spotify?

I would definitely recommend anyone interested in this conversation to look up Yuma and the work that they're doing on the Living Wage for Musicians Act. They're actually more of like a musician solidarity organization than a trade union because in the United States, independent musicians are considered independent contractors and can't actually form unions, but they can form these sort of solidarity groups. And the Living Wage for Musicians Act is a

that they've created alongside Congresswoman Rashida Tlaib's office, and it would create a new revenue stream, a new royalty stream, in addition to the pre-existing royalty stream that would be paid directly from the streaming services to the musicians. So it wouldn't go through this complicated equation through the rights holders, the way streaming royalties work right now. And it's based on some pre-existing...

precedent that exists currently for online radio. So yeah, definitely think that's worth checking out. And then in addition to ways that new royalty models could be introduced or new royalty streams could be introduced or legally mandated, there's also other examples around the world. Like in Canada, there's a kind of streaming tax where the revenue from streaming services is taxed in order to create a fund for

to what they call to fund Canadian content or to support musicians and artists making music locally.

And then I also, you know, in my book, I point to a couple of other things that the FTC could do around digital payola that would be helpful not just for musicians and listeners on streaming, but for people who make work that is shared digitally kind of across the internet.

You know, you make such an important point that if the Spotify model teaches us anything, it's that ultimately the problems that face the music industry can't really be solved by technology, by tweaking or reinventing the next app that magically appears on our cell phones. It's a much deeper issue. I mean, I think that's one of the big takeaways that I took away from your book, certainly. Yeah.

Yeah, I think something that I write in the book is that the problems created by venture capital aren't going to be solved by more venture capital. There's never been any shortage of people's new apps claiming that their new app is going to solve everything. But I think it also, as much as it has to do with creating or looking to collective ways of reimagining digital music or just sort of rethinking...

how we interact with music online. I also think a big part of it, especially when I was listening to some of the clips earlier of people calling in and things that they were saying around the way that they feel like streaming has impacted their listening, you know,

I also think it's just a matter of kind of remembering how meaningful it is to be a curious listener and, you know, remembering that a lot of the value of music comes from a deep commitment to, you know, deep listening, curious listening, asking questions of what you're being shown and why, and remembering all of the

the different ways to receive music outside of streaming services, whether it be through critics or independent radio stations or going to see bands live or recommendations from friends. Yep. Yep. Remember the word friction. I think sometimes being an active and engaged listener and lover of music means to embrace friction sometimes. Yeah.

I'm going to just read one final thing. I'm just going to read this as a way of wrapping this up that you write toward the end of your conclusion. To address the root causes of our ailing music culture, we need to have deeper conversations about why music matters, why universal access to music matters, and what systematic political and economic realities currently prevent so many people from engaging deeply with music.

It is always worth remembering that our shared music culture would be so much more compelling and diverse if so many did not need to abandon the arts for jobs with health insurance. Amen to that. A good point to end on. Liz Pelley, she's author of The Mood Machine, The Rise of Spotify, and The Cost of the Perfect Playlist. Liz, thanks for the book and thanks for your time today. We really appreciate it.

Thank you so much for having me. I'm Anthony Brooks. This is On Point.

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Support for this podcast comes from Is Business Broken? A podcast from BU Questrom School of Business. When the same big investors own shares in competing companies, innovation can suffer. That's why economists Fiona Scott Morton and Glenn Weil propose limiting any firm's investment to 1%. Listen on for a preview of their conversation with host Kurt Nickish.

So critics might argue that limiting ownership stakes to 1%, right, in one competing firm undermines diversification, hurting passive investors, pension funds, you know, that would reduce their low-cost diversification, increase market volatility. You obviously thought of that. Like, how do you respond to those concerns? That one turns out to be super easy.

If you want to diversify your portfolio, you don't actually want to hold four airlines. You want an airline, some banking, some consulting, some computer chips, some mines, you know, random, all different kinds of stuff. You don't need the S&P 500. You maybe need the S&P 100. You just don't need all four airlines. And if you simulate this using past returns, you get...

almost nothing from holding additional more than one airline. And when you look at the very wealthy, what do they do? They don't even hold all stocks. They're in golf courses and foreign assets and no one's holding four airlines. How would an institutional investor offer this to customers? How do you imagine that? They're not selling the S&P 500 index fund. They're selling what? I mean, I thought of it by analogy to something like fantasy football.

You know, when you have a fantasy football team, obviously you don't just have one of every person in the whole league. You don't have every running back. But on the other hand, everyone has a running back.

So you would probably pitch yourself in a more differentiated way as we've got our this and our that. It would be much more similar to the way that a conglomerate typically works. You know, in a lot of developing countries there are conglomerates that have a firm in just about every industry. And they're all the reliance this or the, you know, Tata that or whatever. And I think probably, ultimately, this would end up with a little bit of that type of a flavor.

Find the full episode by searching for Is Business Broken wherever you get your podcasts and learn more about the Mehrotra Institute for Business, Markets and Society at ibms.bu.edu.