Spotify-Apple spat puts artists on losing end?

Headphones are seen in front of a logo of online music streaming service Spotify.
Headphones are seen in front of a logo of online music streaming service Spotify. PHOTO: REUTERS

LOS ANGELES • An escalating battle between Apple and Spotify is leaving some musicians caught in the crossfire.

Spotify has been retaliating against musicians who introduce new material exclusively on rival Apple Music by making their songs harder to find, according to people familiar with the strategy.

Artists who have given Apple exclusive access to new music have been told they will not be able to get their tracks on featured playlists once the songs become available on Spotify, said the sources, who declined to be identified.

Those artists have also found their songs buried in the search rankings of Spotify, the world's largest musicstreaming service. Spotify said that it does not alter search rankings.

However, one of the sources said Spotify has been using such practices for about a year, though others said the efforts have escalated over the past few months. Artists who have given exclusives to Tidal, the streaming service run by rapper Jay Z, have also been retaliated against, the source said.

Apple's music service has emerged as the largest challenger to Spotify over the past year, signing up more than 15 million subscribers since its debut last June, the company said two months ago. Exclusive deals for new music from artists such as Drake, Chance the Rapper and Frank Ocean are central to Apple's strategy.

Spotify has more than 30 million subscribers globally.

Apple Music also has ways to promote artists, such as highlighting their songs in its Top Tracks section, giving it ways to play favourites with musicians.

The dust-up over exclusives comes at a critical time for Spotify, which is in the midst of renegotiating licensing contracts with the world's biggest record labels.

The company is aiming to hold an initial public offering by the end of next year, but needs more favourable long-term agreements with the labels to attract a higher valuation from investors, according to a person familiar with the plans.

The company is not profitable despite generating more than US$2 billion (S$2.7 billion) in revenue, in part because it has to give 55 per cent of the money to labels and an additional cut to publishers.

It is not clear whether major artists such as Drake and Ocean have been affected by Spotify's measures and their representatives did not respond to questions.

In any case, artists of their stature need less help from Spotify to draw attention to their music.

Emerging acts rely on the service to find new listeners. The company has threatened to use its retaliatory practices on lesser-known artists who introduce music on a Beats One show hosted by DJ Zane Lowe, an architect of Apple's radio service, the sources said.

One representative of a singer- songwriter said the client cancelled plans to debut a song on Lowe's show because of concern that the artist would lose promotion from Spotify. Lowe, a former BBC radio host, has introduced new tracks from his first day on the air with Beats One, and his show has become an important platform to debut songs worldwide.

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A version of this article appeared in the print edition of The Straits Times on August 29, 2016, with the headline 'Spotify-Apple spat puts artists on losing end?'. Print Edition | Subscribe