Mr. Page Opens “William!” In Geneva

It Was Actually Just the Worst of Times

I bet you didn’t know that former Spotify Chief Economist Will Page recently went on the attack against artist compensation at WIPO. This defense of his former employer (and likely his Spotify stock options) is only important because he did it in front of a room full of copyright policy makers and commercial interests including Spotify and the suitably noncommittal Digital Media Association. This presentation has become known as William! for reasons that will become obvious. Of course, thanks to Mr. Page’s presentation as their proxy, the Big Tech commercial interests could appear to float above the fray, but fooling no one. He was engaging against creators so Big Tech didn’t have to directly, thus continuing the charade that they are on our side. And Mr. Page seemed to be fulfilling that mouthpiece role with great enthusiasm, studied condescension and concentrated venom as we will see. Let no one say he can’t bend it like Lessig.

His rhetorical approach is apparently unintentionally well-summarized by his own reference to Charles Dickens’ Oliver Twist. Mr. Page dismissed artists and songwriters who complain about abysmal streaming royalties in the face of the enrichment of Spotify executives on their backs:

“We can not have the scene from Oliver [presumably the movie and West End show Oliver!], when you say, please, so can I have some more money.”

While Mr. Page asserts “we” (whoever “we” are) cannot have a real life version of the revolutionary scene from Oliver Twist (or Oliver’s many descendants including Norma Rae with her “UNION” sign), he doesn’t seem to have gotten the memo: too bad, too late, you got it already.

In one breathtakingly smug insult, I think Mr. Page showed both his alarming lack of understanding of the plight of songwriters and nonfeatured artists as well as his utterly grasping commentary on popular English literature. For a rhetorical vehicle Mr. Page uses Charles Dickens of all people, one of the great social justice polemicists of all time. And not just Dickens, but Dickens applied to the streaming economy. Streaming, particularly market centric streaming royalties, are the contemporary Poor Laws that were the subject of Oliver Twist, Charles Dickens’s classic critique of child labor imposed on society by the rich and powerful and the bullies they employed. Not to mention Dickens’ own efforts against piracy, largely dismissed by the contemporary press as “mercenary” motives because authors should be grateful for their popularity and promotion. You know…exposure. Sound familiar?


Mr. Page’s William! blunder ranks right up there with his former Spotify colleague Daniel Ek telling artists they need to work harder, or ex-Spot Jim Anderson’s disastrous encounter with artist Ashley Jana when Mr. Anderson told the world that Spotify was designed to solve a distribution problem, not to pay artists money. Lord knows there are many, many more examples of Dickens’ workhouse culture at Spotify.

But let’s take him more seriously than he takes us because I was taught not to mock the afflicted. After all, it’s becoming apparent that Mr. Page may well be offering us an insight into Spotify’s elite executive culture. For that evidence we should say “thank you.”

Who is Mr. Page?

So who is Mr. Page? He has held the “Chief Economist” title at both PRS and Spotify–one must imagine that a big difference between the two jobs might be the number of zeros in his compensation. To the left of the decimal place, that is, one must always specify when discussing streaming. I’m just a country lawyer and not as smart as these city fellers, God knows, but even I can figure that out though I don’t have a PhD either. (As a PhD candidate tutoring some of us undergraduates told me, never confuse a professional doctorate with a real doctorate, so I won’t.)

I think it’s a safe bet that when Spotify registered shares on the public market, any of the company’s very well-compensated executives with a “C” in their title like Mr. Page probably were also well-compensated in registered shares in the Spotify DPO. Spotify’s initial public offering was one of the biggest value transfers in the history of music, certainly recorded music. It was an extra special windfall for those who got shares when Spotify was a private company depending on whether they cashed in on COVID riches.

So Mr. Page was the Chief Economist at Spotify and in that role appears to have been what we might call the “father of the feast.” Spotify’s hated pro-rata artist royalty calculation (and its close cousin for songwriters), or what is sometimes called the “market centric” royalty structure, was perfected on his watch. As “Chief Economist” one could logically conclude he had something–perhaps a lot–to do with that perfection.

Witness to Streaming History?

I would also imagine that Mr. Page may have been a witness to Spotify’s plans or decision to use its market power to effect the object of fixing prices in the streaming market. Sadly it does not appear that the relevant authorities have sought his potential evidence as an eyeball witness. Thus demonstrating yet again that you can’t find what you don’t look for.

We all know how much Mr. Page loves his evidence; maybe he’s got some for us that can demonstrate why the controversial subscription price for streaming has been magically held firm at $9.99 for so long (one way or another). Mr. Page is eager to inform us that he is an expert witness for government inquiries; perhaps he is underutilized and could provide more compelling evidence as a fact witness regarding pricing policies established while he was at Spotify. He does appear to have preserved his documents. (There may still be time for songwriters to get the benefit of his wisdom alongside his old boss and testify in the Eight Mile Style case in Nashville. Mr. Ek is a very busy man, you know, very busy. These details were no doubt left to people like Mr. Page to implement, Henry II style. Just sayin’.)

In case it wasn’t obvious, it is these two components of streaming rates–market centric and fixed prices–that caused artist and songwriter royalties to vanish to the right of the decimal place which in turn caused artists and songwriters around the world to loathe streaming. In fairness, someone had to agree to these terms but we can see that agreement evaporating with an ever larger group that now includes Universal’s CEO. I’m still looking forward to the other labels coming forward to follow this path that Universal, Tidal and Deezer have taken.

Mr. Page doesn’t really look too hard at the streaming royalty model he evidently had a role in birthing and which is clearly failing creators around the world. (This was actually the point of the WIPO meeting he spoke at, not a table read for his William! production). Dickens’s example of a child’s reaction to torture in the workhouse by slow starvation in Oliver Twist is more telling than Mr. Page may have realized. While there is a certain black humor to it, especially in the movie Oliver!, if you have a heart there’s actually nothing funny about it.

Let’s recap that classic scene. Oliver’s workhouse starvation continues to the point of rebellion. The workhouse children hold their own counsel and elect Oliver to ask for more gruel. And here’s how one of literature’s most famous last stands was recounted:

Child as he was, he was desperate with hunger, and reckless with misery. [Oliver] rose from the table; and advancing to the master, basin and spoon in hand, said: somewhat alarmed at his own temerity:

“Please, sir, I want some more.”

The master was a fat, healthy man; but he turned very pale. He gazed in stupefied astonishment on the small rebel for some seconds, and then clung for support to the copper. The assistants were paralysed with wonder; the boys with fear.

“What!” said the master at length, in a faint voice.

“Please, sir,” replied Oliver, “I want some more.”

The master aimed a blow at Oliver’s head with the ladle; pinioned him in his arms; and shrieked aloud for the beadle.

This should all sound relatively familiar treatment in the streaming world, especially to nonfeatured artists.

A Pie in the Face

Rightly or wrongly, streaming is personified by Spotify’s dominant, if not monopsony, market position. The unfairness of the streaming value transfer is compounded by Spotify’s wretched excess. Evidence would be Spotify’s multi-billion dollar stock buybacks, executive compensation and overpriced office space, but especially Discovery Mode (sometimes called payola) and in-your-face edifice complex like its $300 million naming rights deal with Barcelona’s football club. And I haven’t even mentioned Joe Rogan. So when Mr. Page starts treating artists, musicians and songwriters for all intents and purposes like they’re just not that bright, he should not be surprised at the reaction regardless of intent. It comes off like a Calvinist sermon about hard work from someone who has never humped a trap case.

I want to point to an issue about which Mr. Page and I agree but which I think he doesn’t quite get to the bottom of. I think compelling evidence of his misapprehension is what he rather paternalistically calls “more mouths to feed,” a very Oliver-esque turn of phrase. He also gets caught up in what he calls the “democratization of music,” and who could oppose “democratization”, right?

“More mouths to feed” is roughly the equivalent of what I call the “Malthusian algebra” of Mr. Page’s market centric model that is compounded by Spotify’s curious and sustained refusal to increase subscription rates. The market centric model anticipates that if Spotify never removes or “cuts out” recordings from their offering, every time anyone releases a record they are competing with the entire history of recorded music plus they are sharing their ever-more-meager slice of “the pie” (more on pies later) with every record ever released. This is an important reason why there are “more mouths to feed”–the mouths live forever but the royalty pie does not meaningfully increase in size at a rate that offsets the increase in the number of recordings. Particularly if you fix prices.

So I would say Mr. Page is right for the wrong reason regarding mouths to feed. It doesn’t have so much to do with the raw numbers of recordings released as it has to do with the fact that Spotify has managed to get labels and publishers to accept the idea that every record that ever existed or that will exist in the future must scrap over a combined 70% or so of defined revenue which is based on a subscription price that services all hold constant in a remarkable example of simultaneous discovery. That split is divided up by the number of total streams, a number in the billions that could increase daily.

This then is the famous “pie”. Yet Spotify still has billions of dollars for stock buy backs and hundreds of millions for a naming rights deal with Barcelona. Not to mention executive compensation and pricy real estate. Where does that money come from? I’d like to see that pie. Apparently not from revenue, which is the pie they want artists and songwriters to focus on.

So when Mr. Page raises “fair division” or more precisely, “fair pie cutting”, it’s important to realize that in addition to who holds the knife and who decides the size of slice, there is an unseen figure, let’s call him Harry Lime, who decides on which pie is to be cut. Harry is in the shadows making up his own rules, kind of like Fagin. So far, we have yet to get a piece of the real pie. So until Harry shows up with an explanation and an envy-free division, I’m not buying the pie cutting idea at all.

I would suggest that it comes from a different pie that we are not allowed to share in. Spotify has been operating since 2006 and has lost money–a lot of money–every year. Where does Spotify’s operating capital come from? How did Daniel Ek become an investor in the military-industrial complex? There’s really only a couple of places it can come from other than revenue: perhaps venture investors or debt. This is why I have tried to focus on the total value conferred on streaming platforms by artists and songwriters rather than what they want me to focus on which is their self-serving revenue pie definition. If Spotify can afford the most expensive office space in the known universe and big executive salaries, expansion into personality-driven podcasts, etc., to the tune of hundreds of millions while at the same time failing to pay a sustainable wage to musicians, then they should expect that they will have to rethink their business model or at least be sharply questioned about it.

Mr. Page also suffers from the same myopia as other streamers which is that they misidentify the trade off for musicians, speaking of trade offs. The trade off for all but the top 5% or so of artists is simply to withhold their tracks from streaming services altogether.

However, the problem of withholding tracks from streaming services is the way that live shows are tied to streaming and specifically Spotify streams. The first thing that a talent buyer will do when asked to book a band they don’t know is look them up on Spotify to see how many streams they have which forces artists to participate in the thimblerig who would not otherwise choose to play. This tying relationship compounds the Dickensian aspects of the Malthusian algebra. If you withdraw from Spotify, you will need to be able to deal with the tying problem with venues. This topic rarely gets discussed; I would not be quite so glib about there actually being no antitrust concerns in streaming just because the CMA gave up their investigation after intense lobbying.

Another factor that Mr. Page did not mention is an encouraging development in cost shifting that has occurred in the United States with the Music Modernization Act among all of its many flaws and short sighted drafting. The MMA now requires the costs of the Mechanical Licensing Collective to be borne by the beneficiaries of the compulsory license for streaming. In theory, this eliminates the cost-benefit analysis of every other CMO in the world that operates by deducting its costs from payable royalties. If it doesn’t eliminate the cost factor, it certainly changes it because if the offsetting fees paid by the music users as the “administrative assessment.” At least, that is how it was sold. Of course, the MLC maintains this absurd “play your part” slogan as it tries to pass off the cost of creating its very flawed database onto songwriters, but it does seem that cost shifting should form a significant part of the pie analysis and should be considered for other markets. There is obvious moral hazard, but it seems like an objective analysis should take this development into account even if it costs Spotify more money.

There are many other points of discussion with Mr. Page’s presentation which we will return to in coming days; others may have a point of view about those, too. Having suffered through the condescension, we will be able to draw upon his straw man slides in the future when Spotify tries to sell his message to various governments. It seems about as organic as the Spotify Netflix series. Each come from someone who is absolutely fascinated with having originated a product that is clogging the arteries of generations of artists, songwriters and session musicians and vocalists but seems totally oblivious to the widowmaking harms that will eventually catch up to them all.

I actually had to sit through a similar sermon at Duffus Kirk that was about the lessons we could all learn from Frank Smith and his ingenious wee blue twisty of a pinch of salt in Smith’s Crisps. This religious experience was some form of punishment that was imposed on two schoolmates and me–they in the roles of Beetle and M’Turk for Kipling fans–and we struggled mightily to suppress peals of laughter sitting in the pews praying for it all to end before the pastor threw us out of God’s house by the ear or some other body part.

I don’t know what about Mr. Page’s head patting lecture reminded me of those very old school days. But it was something.