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Hey everybody!
Welcome back to another edition of the Indie Insider, your go-to newsletter for all the latest happenings in the independent music industry. Today is Friday, June 7th which means A2IM (American Association of Independent Music)'s Indie Week is already next week. If you’ve never been to Indie Week, I highly recommend attending. It’s a great place to do some serious networking and to immerse yourself in the conversations that are impacting music businesses of all sizes. If you’re running a label, and you’re not an A2IM member, drop whatever it is that you’re doing, check out their website, and get signed up. It’s a great organization that advocates for independent music at all levels.
I’ll be in NYC for the conference Sunday through Thursday, so if you want to learn more about how Habitat Financial can help you save money and time on financial operations tasks like royalty processing and payments, you can use this link to set up a meeting with me. Otherwise, drop me a line and we’ll figure out a time to meet in NY. Labels attending A2IM are eligible for a 6-month free trial of Habitat Financial.
Let's get started:
Spotify is hiking its Premium subscription prices in the U.S. once again. Starting next month, individual plans will go up by $1 to $11.99, Duo by $2 to $16.99, and Family by $3 to $19.99. The Student plan will stay put at $5.99. This is Spotify's second price increase in the past year, aligning with its global strategy to bolster revenue amid rising operational costs and a push toward profitability. At this time it seems unlikely that artists will see any increase in payments as there has been no announcement that Spotify plans to increase the size of the royalty pool that they use to compensate rights-holders.
Despite these price hikes, Spotify is banking on customer loyalty to minimize churn. According to a recent Antenna study, Spotify users are the least likely to cancel their subscriptions compared to users of other major streaming services. Less than 1.5% of Spotify subscribers canceled in April, a testament to the platform's strong user retention despite big-tech-owned DSPs offering cheaper plans that they can afford to operate at a loss. In real life, we will have to wait and see how these most recent hikes affect user attrition—on Wall Street, however, investors seemed to welcome the decision as Spotify’s stock price increased two percent in the day following the announcement.
Why It Matters:
There is a real risk that increased prices might push some subscribers to cheaper alternatives, potentially reducing the overall user base at Spotify. This would have an immediate effect on artists and labels as you’d want to shift an appropriate amount of marketing resources away from Spotify and towards whatever alternative these listeners gravitate to.
What You Should Do:
Canada’s new policy mandating a 5% revenue contribution from digital service providers (DSPs) to support Canadian content creators has stirred quite the controversy in a country known for its robust grant funding programs for musicians of every stripe. Streaming services like Spotify, Apple Music, and Amazon Music are up in arms, calling it a discriminatory tax. This tax, effective September 1, 2024, will funnel money into various Canadian content programs, including support for local radio, Indigenous music, and new local news initiatives.
Why It Matters:
For indie artists, especially those in Canada, this could be a double-edged sword. On one hand, the funds collected are designed to support local content creation, which could mean more opportunities and resources for Canadian artists. On the other hand, the DSPs’ resistance suggests they might pass these costs onto consumers through higher subscription prices, potentially reducing the number of subscribers and, consequently, your streaming income. Ultimately, this will likely not make a large or immediate impact—rather it’s yet another example of streaming services saying the quiet part out loud. They are not here to support artists, they are here to maximize value for their shareholders. There is nothing inherently wrong with that—capitalism has spurred many an innovation—but where arts are concerned, we do need to ensure we treat artists with the respect and compensation they deserve.
What You Should Do:
Merlin, the digital music licensing agency representing independent labels, has launched Merlin Connect. This initiative aims to provide emerging tech platforms with access to licensed indie music, addressing the complexities and high costs of music licensing. This move is particularly significant given the growing concerns around AI-generated music and its potential impact on original artistry.
Why It Matters:
Merlin Connect is specifically set to address the influx of sub-par AI generated music that requires limited licensing for commercial use. The goal is to steer tech platforms away from artificial music and towards music created by humans. Like many tools that address big sweeping changes in user behavior, Merlin Connect aims to make it easier than ever before to license music. This initiative could help independent music gain more visibility in innovative tech spaces, including apps and services that might not traditionally focus on music.
What You Should Do:
That’s all for this month, folks! Stay tuned for more updates and feel free to reach out if you’re in New York—I’d love to connect over a coffee or a drink.
Cheers,
