Impala Questions Spotify’s Royalty Model

In response to Spotify’s recent announcement to overhaul its royalty calculations, European independent music body Impala has released a comprehensive response, expressing both approval and reservations. The streaming giant’s plans aim to redirect around $1 billion towards emerging and professional artists over five years. Impala commends the crackdown on fraud and the restrictions on functional content but voices concerns about the proposed royalties threshold.

While supporting the goal of addressing revenue dilution, Impala opposes what it terms a ‘blunt instrument’ that could disproportionately benefit popular tracks. The organization emphasizes the need for checks and balances to ensure smaller and emerging artists, as well as diverse genres and territories, aren’t adversely affected.

Impala welcomes further debate on Spotify’s policies and advocates for an ‘opt-in’ system, suggesting a safety net for affected artists and labels. Questions regarding the transparency and fairness of Spotify’s algorithms, impact assessments on discoverability and competition, and considerations for mental health impact on artists are among the detailed queries raised by Impala.

The body seeks data from Spotify on aggregated impacts per artist and label basis, shifts between catalog repertoire and new releases, and the calculation behind the promised $1 billion revenue boost. Additionally, Impala presents its own streaming reform proposals, including considerations for diversity, local artists, and alternative revenue streams.

Acknowledging shared goals with Spotify in fostering a fairer streaming ecosystem, Executive Chair Helen Smith underscores the importance of ensuring a balanced approach. While welcoming some aspects of Spotify’s proposal, Impala insists on assurances and adjustments to prevent unintended consequences, particularly for smaller and emerging artists and diverse genres.