There is more behind Spotify’s artist direct download strategy than it looks

In a surprise announcement, Spotify will now allow independent artists to bypass distributors like CD Baby and TuneCore and upload their songs directly to the platform. Best of all, there will be no charge to do so, which frees artists from paying the nominal fee that distributors charge for the service. The download feature will be available through the Spotify For Artists section of the platform, which has around 200,000 users to date. An artist must first have a verified account before they can join Spotify For Artists.

That said, the feature is in invite-only beta, and only a few hundred US artists are receiving the offer. The company says it will open it up to everyone on the service in the future, but no date for the full launch has been given.

There is a strategy at work here

There is actually more strategy behind the direct download feature than it looks. On the one hand, direct downloads are becoming a big differentiator between platforms, as main rival Apple Music is such a closed environment that it’s unlikely to ever be open to something similar. Many independent artists are likely to download only from Spotify (not a good idea in the grand scheme of things, but it’s easy to just pick the market leader), giving the platform what equates to a lot of exclusive content. They might not be the best hits, but it could add up dramatically over time, even at a freelance level.

Second, it can increase the number of users, as artists who were not subscribed now have to do so to download their songs. This could be a way to keep the most influential users away from competing platforms, which has been a difficult task until now because once a user has made a decision on a platform, it is difficult to make them change. With content more or less exclusive to Spotify, fans of the artist will also have to subscribe to listen to it. It may not be millions, but it may be enough to move the needle.

Finally, it is a way to increase catalog volume, which can be another differentiator in the market. While in reality the number of songs in a platform’s catalog is ultimately not important for a subscriber (they listen to a limited number), it is for a potential new subscriber. Spotify currently boasts 30 million songs in its library while Apple Music has 40 million. Imagine that you are a potential new subscriber by comparing the platforms. All things being equal, why not choose the one with the most songs? This could be a way for Spotify to quickly bridge the gap between libraries.

The inconvenients

Now a major downside to direct download is that it creates an opportunity for massive fraud, where anyone can register as an artist, extract a recording of a song from another artist, and download it as an artist. his. Since Spotify does not yet have a content management system like YouTube’s Content ID, this opens up the platform to pressure from copyright owners to control the situation, and the costs of this could. void any benefit provided by the direct download feature.

Another potential downside could be that even though Spotify has announced that the download service will be free, there is a lot of speculation that it will only be for a limited time, as the market and shareholders could eventually force the platform. to institute fees. Yes, it’s a new source of income, but for an artist, why not go back to a distributor if there is a fee? Charging for the service would defeat the purpose of direct downloads.

The distributors

CD Baby, TuneCore, Ditto and DistroKid are distributors that will take an artist’s songs and distribute them on all streaming platforms for a fee. Until now, this was the only way for an unsigned band with a label to get their music on Spotify and Apple Music, along with a host of competitors, at the same time. Ideally, an artist should be on all platforms to make sure they are adapting to their fans’ preferences and racking up revenue, but since Spotify is the king of streaming right now, many less savvy artists will believe that just being on that big platform alone may be enough.

As a result, look for distributors to take at least one hit in the short term, but that won’t lead to their demise. One platform presence is not enough and artists will eventually learn that it is and understand that the service provided by a distributor can be very beneficial. On the other hand, the distributor will need to focus on the benefits for artists other than being a mere middleman in order to continue to prosper.

The effect on SoundCloud

Many predict the demise of SoundCloud due to Spotify’s direct download feature, the idea being that artists will no longer need the platform if they can download directly from the market leader. What they don’t realize is that SoundCloud actually provides a valuable behind-the-scenes lens for an artist.

Artists often use SoundCloud’s private settings to share unreleased songs with labels, managers, agents, and collaborators. Sometimes the material is only at the demo stage and not available. Sometimes it’s an exclusive version but limited to superfans only. In other words, it is a safe haven for a small number of listeners to access the music. Spotify does not have this feature and therefore SoundCloud is still very useful for artists and will remain so unless Spotify launches something similar.

Ultimately, Spotify’s direct download strategy has many facets under the radar that will likely make waves in the near future, but likely won’t end up being a game-changer in the long run.

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