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The “Long Tail” of the Music Industry

With over 3 million artists to its name, Spotify has been one of the most popular music streaming sites since streaming became a thing. How has streaming changed the way we access music? Additionally, how has streaming affected the way we view popular versus niche artists? How does a platform offer such a diverse range of music, and support it economically? To understand the inner workings of Spotify, we must first understand how popularity in the music industry works.

The Long Tail of Popularity Distribution

We have learned in class that popularity often follows a power law, or “a function that decreases as k to some fixed power” (“Power Laws”). By nature, these functions concentrate the majority of popularity to a small set of individuals, while dispersing little popularity across the rest of individuals known as the “Long Tail.” When we think of the music industry, we can imagine just how massive the pool of artists is, yet count the subset of popular artists and genres on a single hand. In short, there are definitely more pirate metal bands producing music in their basements than multi-millionaire pop stars producing in LA. Yet, Spotify offers an extensive selection of both the most popular artists and the “Long Tail” of niche artists. How exactly does Spotify’s business model support this variety?

Revenue and Profits

Spotify’s two methods of generating revenue are from premium subscriptions and advertisements. Of that revenue, Spotify uses 60% to pay artists, while keeping the remaining 30% for itself (Desai). For each stream, Spotify pays between $0.00331 and $0.00437 to artists, then those artists split that money between themselves and their music labels (“Do Artists Get Paid”). Even the most popular artists make little money based on these numbers, and niche artists make even less. For many artists in the “Long Tail,” it costs more for them to produce and publish music on Spotify than they earn back in streams, resulting in a net loss (“How To Upload Music”). Spotify can afford to pay a diverse library of artists because many of them do not generate more than a couple thousand dollars. However, there are other features of Spotify that can actually help niche artists make money.

Diversifying Music Taste

When music consumption shifted from broadcast radio to streaming services, a revolutionary change in how we experience music occurred. Broadcast radio only provided space for popular music to be heard, whereas streaming services allow for many more artists to be accessed. Spotify in particular provides numerous features to diversify its users’ music exposure. These features include Daily Mixes curated to a single user’s music taste, the Discover Weekly playlist that provides weekly music recommendations, and hundreds of other homepage-promoted playlists related to every mood and theme imaginable. With all of these features, users have a much higher chance of exploring new music and artists. One study on music streaming services found that people who used them increased the number of unique artists they listened to by 32% (Kiger). As users diversify the artists they listen to, niche artists have greater chances of being discovered than ever before. This exposure can ultimately help “Long Tail” artists generate more revenue and gain popularity that never would have been feasible with the broadcast radio model.

Personal Remarks

I have always enjoyed everything from mainstream pop to local midwest emo bands. As a 6 year user of Spotify, I definitely believe it has encouraged me to try new music. It is because of Spotify’s music discovery features that I have found some of my favorite songs of all time. In fact, my top song of 2020 was one that I found on my Discover Weekly playlist. I have always appreciated Spotify’s extensive library that has provided me an outlet to listen to my favorite artists in the “Long Tail.” In the spirit of promoting artists that reside in the “Long Tail” of the music industry, I have created a 10-song playlist of my favorite niche songs, many of which I never would have found without the help of Spotify. Give it a listen if you would like!

https://open.spotify.com/playlist/6cqSjwGIHNSO418vrTQwey?si=usQCxnUjQjuzi0bJ6ekQcQ 

 

Works Cited

Desai, Mittul. “How Spotify Makes Money - Business Model.” Medium, Uncovering Music Tech, 29 Apr. 2019, medium.com/dissecting-music-tech/how-spotify-makes-money-business-model-ca0a71a19163. 

“Do Artists Get Paid Every Time Their Song Is Played on Spotify?” Planetary Group, 16 Nov. 2020, www.planetarygroup.com/do-artists-get-paid-every-time-song-played-spotify/

“How To Upload Music To Spotify: 5 Different Ways.” Cymatics.fm, cymatics.fm/blogs/production/how-to-upload-music-to-spotify. 

Kiger, Patrick J. “How Spotify Broadens Your Musical Tastes.” Stanford Graduate School of Business, 1 May 2018, www.gsb.stanford.edu/insights/how-spotify-broadens-your-musical-tastes

“Power Laws and Rich-Get-Richer Phenomena.” Networks, Crowds and Markets: Reasoning about a Highly Connected World, by David Easley and Jon Kleinberg, Cambridge University Press, 2019, pp. 543–560.

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