During their last earnings call on November 1, CEO Daniel Ek attempted to answer some difficult questions. The company’s goal is to maintain their profits for more than just one quarter, and they believe this can happen through their”Spotify for Artists” program. Ek believes that through deciphering who an artists’ true fans are, they can capitalize on their “freemium” business model.

In response to a question regarding charging artists for access to Spotify services, Ek responded:

“Our strategy in our marketplace side of the business is the same as we have on the rest of Spotify, which is it’s a freemium business, meaning there will be a certain amount of products which artists and labels can get for free, and there are others which we will charge money for. So, that’s an evolving strategy when it comes to our product portfolio. Data specifically is very unlikely to be one of those things that we’ll charge for.”

With over 250,000 artists currently connected to this platform, the time for its monetization is now. Spotify’s sights are set on indie artists, who are seen as up-and-comers who will use their tools and platform to launch careers. In wading through the details, this model does seem quite similar to Soundcloud‘s platform for content creators.

But what else can be done?

When asked about e-commerce, such as ticketing and merchandising, Ek was hesitant and deflected this question. Companies like Apple Music and Amazon’s Alexa have taken over similar markets due to better product placement and marketing strategies. However, this did not deter Ek from his central message of charging artists for their services.

Hopefully this will help assist Spotify’s current $26 billion valuation, down from $29.5 billion in April. Spotify also must toe the profit line carefully, as they continually see resistance from fair, “artist-centered” earning platforms such as the Gareth Emery-backed Choon.

You can learn more about Spotify for Artists HERE.

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Gareth Emery has a massive fan base and speaks from experience as an artist with the Spotify platform. He disagrees with CEO Daniel Ek’s statement that the streaming platform is a two-sided marketplace for both fans and artists.

“Spotify has always been run for the benefit of the major record labels – all of which are shareholders – whilst artists get crumbs from the table.”

Emery explains that the entire process for artist compensation is no straightforward matter. A process that can take up to two years, and won’t guarantee a liveable income for an artist like him with over 1 million listeners and tens of millions of streams. He lambasts the statements from Ek, as the touted profits of Spotify benefit the major shareholders, who also happen to be all the major record labels.

Gareth is trying to make waves in the industry to disrupt the still-traditional methods of artist compensation. His article is in line with the new cryptocurrency-based streaming service he intends to launch soon, called Choon. The service based on the Ethereum cryptocurrency is designed to eliminate the middle-man and let fans pay artists directly through Smart Contracts. Instead of the traditional process of royalties being paid to major record labels trickling down to the artists, and in Spotify’s case as Emery said, “while the way fans consumed music has changed, artists’ compensation is stuck in the dark ages.”

During their investor day Spotify boasted increased margins and a revenue of €4.09 billion for 2017. Emery says:

“…when you factor that the people that actually create the product (artists) get almost nothing, you realize the current music streaming industry is an elaborate smoke & mirrors system where all the money conveniently ends up with intermediaries and middleman: the world’s major record labels.”

With Choon, Emery hopes to “smash the old system, disrupt the hell out of it, and build a new music industry from the ground up.” More and more artists are starting to release their own currencies, with Gramatik launching his GRMTK crypto around the same time as Emery. Gareth Emery is certain there is room to evolve the industry and bring it to the 21st century.

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