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Hey Everybody,
Welcome back to the Indie Insider newsletter. Today is Tuesday, May 21st and I’m your host, Calvin Windschitl. We are a few days late this week. My birthday was last weekend, and my wife had her final performance with The Big Muddy Dance company over the weekend. We had all kinds of friends and family in town, so I had to delay our newsletter a couple of days.
That said, it served as a reminder for me to slow down, spend time away from work with people I love, and find some balance in life. If you haven’t taken some time to yourself recently, I highly recommend making the space to do so. I’m back this week charged up and full of love for what I do. If you need some help making the time to step away from your music business—I know, there is always something to do in this industry—consider checking out my platform Habitat Financial to automate some of the more time consuming and less exciting parts of your business. It can automate everything about signing a new record from signing to payment. With powerful royalty processing tools and affordable pricing Habitat will help you make more time for the important things.
Alright on to the news.
In a surprising twist, the The Mechanical Licensing Collective (MLC) has taken legal action against Spotify for allegedly underpaying songwriters and publishers. The lawsuit was filed in response to Spotify’s recent reclassification of its Premium subscription plans to bundled offerings, a move that will cut the mechanical royalty rates that it pays to rights-holders nearly in half. Spotify’s reclassification was linked to the inclusion of audiobooks, but the MLC argues the service has remained unchanged, suggesting Spotify's move is a strategy to pay less in royalties.
For indie artists and songwriters, this legal showdown is another battle in the ongoing struggle to secure fair compensation. Lower mechanical royalty rates mean less income for the creators who fuel platforms like Spotify. While it might seem like a distant legal squabble, the outcome could set significant precedents affecting how streaming services classify and pay for music content.
That said, I think it’s likely that many artists listening to this podcast are unaware of what a mechanical royalty is, or how they collect it. Mechanical royalties are a publishing royalty paid out every time a digital or physical reproduction of a composition is produced. Unless you’ve opted into a publishing administration agreement with an aggregator like TuneCore, are a Sentric or Songtrust client, or if your label is collecting it, it’s likely that you’re not collecting this royalty anyway. This is not a public performance royalty so it will not come through your PRO. So, if you’re a songwriter, and you don’t collect mechanicals, get signed up with Sentric and Songtrust to maximize your revenue. If you do, then pay attention to this lawsuit as its outcome could determine how much you get paid.
In China, Tencent Music entertainment Group (TME) reported a staggering 39% surge in subscription revenues for Q1, hitting a cool $500 million. The company now boasts 113.5 million paying subscribers, marking a significant increase from the previous quarter. This growth is attributed to improved membership privileges, expanded content, and savvy promotional campaigns.
Tencent’s success story highlights the power of strategic marketing and diversified content offerings. As indie artists, there’s a lot to learn from TME’s approach to increasing user engagement and willingness to pay for premium services. With the global music market becoming increasingly interconnected, trends in one region can often signal broader shifts.
Take a page from Tencent’s playbook—invest in creating exclusive content and engaging experiences for your fans. Membership models, fan clubs, and special content can boost your income and create a loyal fan base. Also, don’t shy away from international markets. Platforms like Tencent could be a valuable avenue for reaching new audiences.
Udio , a generative AI product is now producing an astonishing 10 songs per second. With over 600,000 users and significant backing from investors like Andreessen Horowitz, Udio’s output is accelerating the ongoing conversation about AI’s role in music creation. The sheer volume of tracks raises questions about the future of music consumption and copyright, not to mention quality and authenticity.
AI-generated music presents both opportunities and challenges for independent artists. While it opens new possibilities for collaboration and innovation like in the case of GrimesAI, products like Udio are water-logging an already saturated market, making it harder for individual tracks and artists to stand out. Moreover, the legal and ethical implications of AI-created content using existing music frameworks are still evolving.
I’m currently encouraging artists to utilize AI as a tool rather than a threat. The cork is out of the bottle and there is no use trying to stuff it back in. Use it to augment your creativity—whether it’s generating ideas, beats, or even entire compositions. However, maintain a unique, authentic voice that sets your music apart from AI-generated content. Keep an eye on evolving copyright lawsuits to stay up to date on how various policies are dealing with the various problems and questions that we are all grappling with. The most optimistic part of me thinks that it can usher in a new era of human creativity, but I also think that music is an intensely embodied craft. It is our corporeality that makes music special. It’s what makes live performance so engaging and it’s what makes dancing such a marvelous act of spontaneous joy. So, keep that in mind as you create.
Ok everybody that’s about it for our newsletter, but before we hop off, I’d like to ask you to think of one person who might benefit from these discussions. Send them a link subscribe and let me know what you’d like to hear more of in the comment section.
Cheers!
