Hi folks, believe it or not but in October 2023, Affine Records turned 15 years old. Some of you have been with us since the beginning, others have only recently discovered us. But there are more important things than retrospectives at the moment. Label operator and founder Jamal talked to Christoph Benkeser in an in-depth conversation for musicaustria.at about the current state of the streaming economy. Spoiler: Jamal calls for a collective exit from the streaming economy as we know it right now. How and why you can read below. The orignal piece has been published in German. But there is also an English version that was published via Austrian Music Export which you can also read here in the blog.
Let’s talk about the streaming economy.
Jamal: I’d like to use Affine Records’ 15-year anniversary to describe the effects of this streaming monopoly and what we can do to break it. And I don’t mean just taking stock of the situation or having an academic discussion about it: I’m talking about solutions, about finding a way for us as independent labels – and the artists we represent – to collectively get out of this streaming straitjacket and develop a better system.
You’re talking about getting out of the streaming system completely, not just changing existing structures. Why?
Jamal: For over a decade now, we’ve been living and working with these streaming giants. It was a dysfunctional system when we stumbled into it, and we hardly questioned the relationships and perspectives. They seduced artists and labels with the old “infinite growth” trick. And now we’ve had ample time to gain experience and reflect on it.
I want to identify three major reasons why the streaming economy doesn’t work for the huge majority of the music business, probably more than 90%. One reason is economic, of course, but there’s also an artistic or creative component, and connected to that, a mental health aspect.
Let’s start with the economic aspect.
Jamal: To understand that, you have to understand the pro-rata model that streaming platforms have always worked with. It’s the worst of all possible payment models – together with the playlist fetish, it’s led to a massive devaluation. Essentially, we’re working for Drake and Taylor Swift, and we’re apparently satisfied to be useful idiots.
Then why do so many people cooperate?
Jamal: One player controls the market. This dominance makes it difficult, if not impossible, to pivot to other areas – unless we break it with a new collectivism. I say ‘new collectivism’ consciously, because it’s going to require a new approach – and a lot of persistence – to make it happen.
The streaming services say that the music business has to speak with one voice, which is difficult when everyone – from the CEO of Universal Music to the indie label association – has a different perspective.
Jamal: That statement is calculated: while some people waste their time on infighting, conditions continue to get worse. For instance, now there’s “Discovery Mode”, an invention that basically legalizes payola. The monopolist’s long-term goal is to reduce all payouts to artists and labels by as much as 30%. That’s why they offer artists and labels a deal: if you waive part of your streaming income, Spotify’s algorithm will treat you preferentially. It’s like the carrot held in front of a donkey’s nose, but it’s a false promise. A better share of nothing is still nothing.
But some musicians still hope for a competitive advantage over others.
Jamal: That’s why so many people participate, and that false hope will lead a lot more to join up if no one stops it. A lot of people really believe that they’ll get more, or lose less, that way. In reality, though, the vast majority have lost as soon as they sign up – it’s a game that de facto can’t be won. But offering this phantom hope is a strategy that works very well for Spotify.
Separating artists from labels is another of their goals: they want artists to deal directly with them because it increases their dependence, because it cuts down administration, and – in the end – because it will reduce their payouts. We can’t naively continue to believe that this ecosystem can work for us; that’s clearly not the case. Spotify has misused indie culture’s values – remember, companies are primarily responsible to their investors. They don’t care if some indie band from Hamburg is getting what they deserve. In reality, the curated playlist system has created an artificial scarcity; it’s the perfect manifestation of this rat race.
What do you mean?
Jamal: Imagine you have 50 buckets, and you empty sand over them. At the end, they’re all full, but most of the sand is actually scattered on the ground around them. Also, most of the buckets were already full before you started pouring the sand – with major-label repertoire, ghost artists, and – increasingly – AI productions. The buckets are playlist placements – which are in huge demand; they’ve become like money in the streaming ecosystem, though they encourage passivity in the listener. And if you do manage to land a song on a big playlist, it doesn’t necessarily lead to more ticket sales; there are a lot of different factors at play.
What you’re describing…
Jamal: …shows that the system can’t function for the vast majority! Individual success stories just prove the rule; they get promoted because the system needs them in order to uphold this “anyone can succeed” narrative and survive.
Who does this narrative work for?
Jamal: For big major acts, for individuals who develop a business template and tailor their creative output to it. It also apparently works for people who make kitschy, easy-listening piano music. Spotify has no interest in creating a system that works for the majority. They’re increasing subscription prices now, which will reportedly increase their revenue by a billion dollars. But at the same time, they’re firing hundreds of employees.
And with everything else, it’s easy to forget that Spotify isn’t even concerned primarily with music – their main focus is the lucrative podcast business. That’s why we players in the indie market have to recognize that this system was never for us, and never will be. We have to stop chasing a promise that will never be kept; to finally rid ourselves of the illusion that we can change a monopolist from the outside. It’s a waste of time. The recent (re)sale of Bandcamp should be warning enough that we can count on nothing when it comes to investor-driven platform capitalism.
The same goes for TikTok, which is positioning itself as Spotify’s new competition. TikTok is the biggest social network in the world, and now it’s rolling out a streaming service in selected markets. The difference is that here, the promise of visibility will be much greater. A gigantic carrot that will be waggling everywhere soon. It’s a kind of a re-education of artists to become content creators.
That means artists won’t be competing against other artists anymore, but instead…
Jamal: It’s been everyone for themselves for a long time anyway; a downward spiral of content snacks. But when streaming services and social media platforms continue to merge and 15 seconds becomes the new standard, the dopamine kick from the preview buffet will be enough for a lot of people. How do you establish a fan base like that? I don’t blame users for frequenting these platforms; they’re often well-designed and seductive. Especially the generation that has grown up with them – blaming them is simplistic and it smacks of snobbishness. I think that’s wrong. It’s about creating attractive alternatives – these established mechanisms aren’t carved in stone.
You wanted to talk about two further aspects of the streaming problem – the creative aspect and the mental-health aspect.
Jamal: When you’re stuck in a system with hardly any perspectives, you look for distractions, and – unless you belong to the priveleged class – you’re forced to create ‘side hustles’ to make money. “Make your own merch!” people say, or “start a Patreon channel!” They don’t mention that those things also take time, energy, and money – and for various reasons, they usually don’t make sense anyway.
You have to earn your art, otherwise you can’t afford it anymore.
Jamal: Yes, and at the same time, you have to keep getting louder in order to get noticed, which leads to desperation marketing. The fear of being forgotten or ignored is constant for a lot of people. It can be debilitating, and it often results in mediocre art, because people spend the bulk of their time on other things than art. Or they spend it making art, but under difficult conditions. Today’s technical standards and artificially shortened attention spans have much too large an effect on creative processes – no matter whether you’re producing EDM, indie rock, or pop. It robs art of its integrity. If songs only count as a full “play” after 31 seconds, we shouldn’t be surprised when people structure their songs accordingly. If you’re constantly defending your position in a toxic, turbocapitalist environment, it’s no wonder that the burnout rate in the music industry is rising, and it feels like every third promotional campaign is about mental health.
This ties a number of aspects together – but how?
Jamal: The dynamics of the streaming economy have effects on other areas. Take for example public broadcasting systems throughout Europe: far too often, incompetent decision-makers enter into competition with streaming services – even though it’s not necessary – because they think they can get young people interested by imitating the streaming monopolists. But in the end, they become copies of a copy of a copy, and then they wonder why young people are losing interest, or never even take notice of them in the first place. And in the meantime, they’ve established structures based on the market and not on their public service responsibility. The public broadcasting model is clearly beneficial; it’s a laboratory for new ideas and a potential unique selling point. The fact that it’s being voluntarily given up is a scandal. FM4 is unfortunately spiraling downwards right along with the rest of them.
So, public radio is destroying itself.
Jamal: Yes. If people working in radio fail to defend themselves and define the boundaries of what’s acceptable, you abolish yourself. Particularly when the music and format overlap too much with the mothership (in FM4’s case, Ö3), it gives people looking to downsize an excellent argument for consolidation. And there’s another effect caused by drawing the wrong conclusions: institutional support for Spotify. When label X in Vienna curates a playlist under the pretext of promoting Austrian music, but the purpose is actually to push their own catalogue, it’s deceptive. And the worst thing about it is, they’re directing public funds into the wrong system.
So that’s where we are now. At the beginning, you mentioned a way to change the system. How can that work?
Jamal: First: we need to stop being victims. We need to get out of the back seat and into a self-conscious position in order to start taking control. The tipping point is already here: the issues might be somewhat different, but the so-called Hollywood strike may be a good opportunity to generate more public awareness. In any case, the point is to create a new reality. This present streaming economy isn’t a natural law.
We’re getting to the new collectivism you were talking about.
Jamal: Yes. The first step is to get into the relevant national committees – in Austria, the indie label trade association and FAMA. When that’s accomplished, you assess and describe the status quo. That shouldn’t take too much time. If there’s the political will to change something, the third step is to develop sustainable positions, so that the branch is nop longer fragmented, but speaking with one voice.
Grassroots work, from the bottom up.
Jamal: And developing a position that the majority can sign on to, that is robust and sustainable, a position that questions the existing hierachies – that’s the main point. Ideally, this process serves as an example for other countries, their committees and associations. If the thing is to gain real momentum, primarily the big countries – Germany, France, Great Britain – have to get involved. Because the decisive step is developing enough force to put pressure on Merlin, the international indie label representative.
Jamal: It won’t be enough if just Austria, Luxembourg, Slovenia, and Malta band together. It has to be as large a region as possible, with the largest possible partners – like Merlin – to communicate the positions and reasons to drop out of the streaming economy. At the same time, you have to generate public interest for the process; it has to be open and transparent. Platform and web developers have to realize that the potential of independent catalogues – which are still 30% of the entire market – is being redistributed.
So that a new platform arises?
Jamal: Yes, but one with new rules, where indie players can retain control. It shouldn’t become a new monopoly that just creates new dependencies in order to blackmail them. The point is to develop solid standards – a mutual basis that new platforms can build on. Like a Bandcamp for streaming – except that, ideally, it won’t be just one player but several, coexisting with one another.
A co-op of independent labels.
Jamal: You could call it that. In any case: independent labels, working with new platforms or with existing outlets that support exactly these new standards – Soundcloud has a new user-centric model that has made a positive impression – and make their own rules, instead of the majors dictating them to us. We turn the process around.
That ‘we’ requires real solidarity – ‘we, the independent scene’.
Jamal: Exactly. It’s about the collective rejection of a system that almost nobody profits from. I’m positive that this position can be formulated, with plenty of facts and experience to back it up.
What seems inevitable has to be shown to be just one alternative.
Jamal: It’s about creating new standards to break the current mold, and it can be done if we all rebel. I don’t mean going on strike against like Spotify; it’s about no longer recognizing that kind of company as a legitimate participant. I’m tired of feeding a machine that pushes us ever closer to the edge, a machine that will consume us in the end.