Spotify Technology SA wrote in a blog post Thursday that the company invited a few hundred United States-based independent artists to upload their songs to its streaming service thanks to new tools to release music without a record label. Chicago rapper Noname and Haitian DJ Michael Brun, both tested the feature out already.
By allowing artists the ability to upload music directly to Spotify, it reduces the need for a record label or third-party distributor, which take a cut of revenue, according to Bloomberg.
The new feature will also help Spotify deliver regarding its pledge to bypass intermediaries. The world’s most popular paid streaming service actually loses money occasionally because it must pay out labels and distributors a fraction of revenue that they collect from users.
Kene Anoliefo, who works on the Spotify team that builds tools for musicians, says the new uploading feature is a way to “encourage artists to release music on their own terms.”
When Bloomberg attempted to contact three major record companies, all declined to comment or didn’t respond to calls regarding Spotify’s new feature. However, this proves to be yet another way the streaming service is competing with its largest partners. The tension between rights holders and Spotify intensified as they move into a new round of negotiations for music licenses.
According to the Recording Industry Association of America, U.S. music sales grew 10 percent in the first half of the year and are on track for a fourth straight year of growth. Out of the total sales, streaming accounted for 75 percent of sales, and almost all of the growth. Physical CD sales declined by nearly 42 perfect in the first half of the year, while online music sales declined by more than 25 percent.
“Music continues its comeback story,” Mitch Glazier, the president of the RIAA, said in the report. Although, many musicians say they aren’t receiving enough of the spoils. Musicians relied on record label to fund recording sessions for quite a long time. They also looked to these record labels to provide creative feedback, plan marketing campaigns and distribute music around the world. In exchange of the support provided, labels will typically own the copyright to the work, giving artists only a percentage of the actual sales.
Spotify wants to diminish this system and the way musicians make music by creating a two-sided marketplace in which artists and Spotify would both receive a larger portion of sales. Musicians who use the “Spotify For Artists” program can see how their music will appear in the app and track their royalties.
The company mentioned it doesn’t want to own any music personally, which is why Spotify will not be building a label, but it has started to replicate some music company tasks including funding large marketing campaigns and building tools for distribution. Spotify also landed direct deals with artists enabling them to release music on their own.