we7: “We pay for every play”
UK streaming music service has moved to distance itself from Spotify, following an article on the Guardian’s website earlier this week on whether artists will see a penny of any profit their labels make from equity in Spotify if and when it’s sold.
The company has seized the opportunity to state that “no music company has equity in we7 – meaning that there is no possibility of other influences affecting the way the company develops”. What’s more, it has stressed that every song played on its service is paid for, whether from a signed or unsigned artist.
Which is fair enough. But it’s worth stressing that Spotify isn’t a villain here. The problem is more between labels and their artists – and it’s wider than streaming music, encompassing unlimited models like Comes With Music too.
Artists are increasingly mutinous about the idea of labels profiting – whether from advance payments or equity stakes – and not having to pass that money onto the artists whose songs it was based on.
we7 isn’t immune from artist concerns either. Witness Bob Dylan ordering his songs to be removed from both we7 and Spotify this month.
We can’t help thinking that a.) the likes of we7 and Spotify would be better off working together on issues such as artists rights, rather than point-scoring, and b.) that the issue of how equity stakes translate into money for artists is only going to become more controversial as time goes on.
August 20th, 2009 at 4:55 pm
Does we7 pay the artist directly or the labels for the plays?
August 20th, 2009 at 9:50 pm
Hi Adam and team. Its really not about point scoring. Its about intent. we want Bob Dylan and all artists to know our intent. We7 is pro-artist.
We started we7 to help artists get paid in a world where ‘cant’t pay’ or ‘won’t pay’ had become rampant. That is why we are proud of Peter Gabriel’s high profile involvement in the company: as ethical an artist as you will find. A musician’s musician. We7 is pro-fan: we don’t have closed playlists that only operate in a single application to lock you in to a closed world. if you have a web browser you have we7. we7 helps labels reach as wide an audience as possible on-line. No application to download. No barrier to adoption. we7 is as easy to use for music as Google is for search.
we7 is pro-ownership. We see that fans use we7 to listen legally to what they like, and then buy and download what they love via an integrated iTunes store. We don’t want to displace iTunes or other applications like it. Many fans find it a really good music application. And they already have a significant investment in music they have bought. Why ask them to junk that?
And we7 is pro-transparency; we7 has never been secretive about its equity ownership. Why would anyone want to hide that information or refuse to confirm it? Its not easy to think of a good reason.
we7 can refer to third parties, like Hitwise and other companies, who can validate for advertisers the key traffic statistics. They appreciate that openness. Artists do too. And so do fans. Who also appreciate choice. Hope this helps. Lets all get behind rewarding the artist fairly. Without them we have noise, but no music…..
John Taysom, Chairman and Founder, we7.
August 20th, 2009 at 10:10 pm
Thank John for the good info, but you didn’t answer my question. Do you pay the labels or the artists? How much money is given to the artist when I play a track on we7?
August 20th, 2009 at 11:16 pm
“no music company has equity in we7 – meaning that there is no possibility of other influences affecting the way the company develops”
er… isn’t peter gabriels realworld company one of we7’s major backers???
August 21st, 2009 at 5:04 pm
Mr John Taysom,
How much do you pay an artist per song played?
August 22nd, 2009 at 1:12 am
You state “how equity stakes translate into money for artists is only going to become more controversial as time goes on”. Yes, but particularly for those services who have given their equity away in return for a stellar rise in valuation like Spotify have. You obviously dont have to do it that way as we7 proves. So for Spotify to give away equity to labels is their choice clearly for valuation benefits. Spotify know the issue of label equity is really sensitive in the wider music community – which is why they have previously denied any labels having equity so often. Werent they trumpeting they were the indie labels friend not so long ago? So what do the non Merlin indie labels feel now they know about their equity holdings – why hasnt musically asked them?
Read a good insightful blog on wired tonight about this (excerpt and link below). None of this means Spotify are demons, but it does mean that not all services are the same.
“….Labels are the other significant stakeholders in Spotify. All four major labels and super-indie Merlin together own 17.3 percent of the company, either in return for actual money, as advances on royalties, or as some combination of the two. Wired.com highlighted a major problem inherent with this strategy in May of 2008, when News Corp. gave the labels equity in MySpace Music in return for the right to use their music.
The problem with exchanging equity in return for the right to play music from certain labels is obvious: It means bands must sign to a major label if they hope to receive equal compensation from start-ups like Spotify. This state of affairs runs counter to everything the internet promises about dis-intermediation, and returns us to the days of only certain gatekeepers controlling access to culture.
Say Microsoft buys Spotify for four times its current valuation, or $1 billion. All four labels, the indies that belong to Merlin — and now, Li Ka-shing — would see a big payday, and would presumably filter some of that money through to the artists they represent. Meanwhile, indie bands and labels whose music is included in the service but who lack equity deals would only receive whatever they’re owed under their standard licensing agreements….”
August 27th, 2009 at 9:53 am
songwriter wrote: “all four labels … would see a big payday, and would presumably filter some of that money thorugh to the artists”
Ahh, bless…
August 27th, 2009 at 10:33 am
Hi Dan
That wasnt my comment. It can from the wired article I mentioned in my comment. Certainly not my view – I live in the real world where the majors thirst for ‘unattrituable income’ (money not passed onto anyone) is well known. This includes rapid valuation rises from equity they hold in overhyped services which makes their balance sheet looks great! What Spotify is doing giving the majors equity is just another way majors can use to con their artists by not sharing. Spotify cant put their head in the sand and say this is to do with the labels and not them. Other services are building business without giving majors equity. So lets not be naive. Spotify did this because is the quickest way to getting their hypervaluation earlier and long before they prove anything about their business model.