Spotify recently launched a new feature in the US which will enable independent artists to upload tracks to the service directly, without any requirement for a third-party aggregator or record label, which was the case before.
The feature currently is in invite-only beta mode and only a few hundred US artists are being ushered in but in the future, the company will bring ‘upload’ to even more artists, labels, and teams.
Artists will be able to access the upload function via a separate Spotify For Artists platform which stood at more than 200,000 verified acts amongst its monthly user base at the end of June 2018.
The new upload tool will only be open to parties that own the copyright of their recordings and filters have been put in place to ensure that infringing content doesn’t get on the platform. Cover versions can also be uploaded on the platform.
This move makes Spotify a two-sided marketplace which not on serves listeners but also musicians who are not yet popular. Spotify’s upload is completely free, which is the biggest shocker in this scenario where companies are finding new ways to earn money. The platform isn’t charging any upfront fees for uploads, no matter how many tracks are submitted and also isn’t charging artists any additional commission on the royalties generated by this music which makes it a missed lucrative shot at a good, accountable digital music management feature.
This approach sits in stark contrast to existing third-party digital aggregators/distributors such as CD Baby, TuneCore, Distrokid amongst others, all of which require either a one-off upload fee or a yearly subscription payment from artists. Spotify might be expanding in different directions to explore other engagement possibilities.
Spotify is willing to absorb the costs of running a user-upload service, in order to quickly build a global community of engaged musicians which might translate to starting to charge for this and other tools down the line.
This move represents an aggressive move into user-uploaded audio content for Spotify which has been the main domain of SoundCloud, which essentially offers artists the chance to upload unlimited tracks, plus access to insight tools when they sign up to a Pro Unlimited account for $15 per month or $135 per year. SoundCloud also offers a free, limited option which caps a user’s total uploads to three hours of material. This move can directly impact the profits of an already slowing in-profits SoundCloud.