Spotify’s major royalty changes are solidly poised to benefit major labels over independent artists — for obvious reasons. The biggest labels get more streams, but Jeff Price says major labels longer control the music sector, are losing marketshare, and have turned to inefficiency as a business model.

Digital Music News spoke with Jeff Price of Word Collections, a global publishing administration company, about some of the biggest pain points artists and music companies face in getting paid what they’re owed. Price flatly says the biggest obstacle is major music companies.

“The problem for the major music companies is they no longer control the music sector and are not needed for distribution, manufacturing, promotion, or recording. A massive and multibillion-dollar ecosystem of indie labels and DIY artists have emerged, gaining more and more market share as the majors’ market share declines,” Price told DMN.

Digital Music News is hosting an online webinar exploring fraud prevention and liability reduction in music. That includes recent shifts in streaming monetization, with Price a key panelist in the mini-conference discussions.

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“Rather than focus on innovation, working to find more artists that would thrive in their ecosystem or creating a lucrative business to support these developing artists—the majors instead come up with new schemes to take other artists’ money. Inefficiency is now a business model. Rather than ensure all who earned the royalties in the global $3B+ ‘black box’ system get paid—the majors insist this is not done and take this money in market share allocations. The consequences for these actions are dire.”

Jeff Price should know. He launched music distribution and publishing administration platform TuneCore in 2006, giving musicians and other rights holders the ability to self-distribute their music to digital service providers (DSPs) like Spotify. In 2013, he founded and launched Audiam, which works to locate metadata for sound recordings of specific compositions—recovering mechanical rights revenue for songwriters, composers, and music publishers.

Audiam was acquired by Canadian collection society SOCAN in 2016, with Price leaving in 2020 to launch Word Collections. Word Collections focuses on getting comedians and other spoken word performers paid for the broadcast and use of their works.

With Spotify’s new royalty model favoring major music companies (Universal, Sony, Warner), what can independent artists or music companies do if they think they’re owed royalties?

Price recommends checking sound recording statements for stream counts as broken out by DSPs and territory to compare against PRO and mechanical statements. “On the sound recording side, there is little you can do unless you can get an audit of the DSP itself and go through their source code and usage logs.” An audit for the DSP itself, you say, Jeff? That could be on the table for 2024 as Bridgeport Music initiated an audit of The MLC—which has notified all major DSPs of its intent to audit their reports in 2024.

Curious to know how Spotify’s royalty changes will impact smaller artists? Jeff Price’s breakdown of the new royalty changes paints an accurate picture showcasing how major music companies will benefit from these changes—while independent artists and musicians will suffer.