In late September, Grant for the Web, a $100 million fund dedicated to developing open, fair, and inclusive web monetization, announced that it would be backing Ampled, a new co-operative, in exploring alternatives to current music-streaming services. The announcement comes amid the music industry’s seemingly paradoxical development of record-high stock prices for platforms like Spotify — and impoverishment for musicians, who earn less than a fraction of a cent per play.
“It’s a Milton Friedman-esque culture that values shareholder profits above the basic needs of other stakeholders, like workers, customers, or, in this case, creative producers,” says Ampled’s cofounder, Austin Robey, of the current state of the music industry, name-checking the infamous economist who advocated capitalist absolutism.
Founded in 2018, Ampled is a co-operative of musicians, tech workers, and fans that allows music-lovers to directly support the artists of their choice via monthly subscription. In response to COVID-19 decimating the live music scene — through which many musicians make the only real money that they will ever see for their art — the co-op committed 100 percent of every payment made through the platform to the respective artist. Now Ampled is looking into doing even more, like building a streaming service to directly connect musicians and fans, taking corporate middlemen like Spotify out of the equation.
I recently spoke with Robey about Ampled’s structure, the history of music streaming, and how the co-op hopes to reverse the trends currently impoverishing musicians. Our conversation below has been lightly edited for clarity and brevity.
Arvind Dilawar: Why structure Ampled as a co-op?
Austin Robey: The funny thing is that almost none of us had been members of a co-op before starting Ampled. Initially, we looked at several ways a platform could share ownership with its users, but it turns out it’s a really complex problem. Because users of a platform are not technically employees, it’s difficult to just give ownership within the context of a traditional startup structure. We also became disillusioned with the standard pathways for starting a tech-enabled company. We wondered: Why is a company for sale before it even starts? What if we never gave any ownership to investors?
Once we unlearned all of our assumptions about startup incorporation, ownership, investment, and goals, the choice became clear. The best way forward was to become a co-operative. As soon as we realized this was a viable option, we got really excited at the idea of a company where everyone, founders included, have one share of a company. The goal is not to sell or go public, but to serve its members.
AD: Has Ampled done much research into the history of music streaming?
AR: We’ve looked at some thoughtful critiques and analysis from writers like Liz Pelly, David Turner, and Cherie Hu, among others. The history of music streaming seems to fit into a larger narrative of the history of value capture and value extraction in music. In researching potential solutions that could be applied to a streaming economy, we’ve been looking outside of music and tech at the history of co-operativism and solidarity economics. There’s such a rich and inspiring history of people joining together to overcome powerful structural disadvantages. I think some of these lessons can be really useful precedents with applications to both tech and our platform economy.
AD: Can you describe some of the previous models of value capture and value extraction in music?
AR: Workers and cultural producers of all kinds are trending towards being more reliant on a platform economy with 15 percent or 20 percent rents taken at every step on platforms owned by outside investors. These are platforms valued in the hundreds of millions or billions of dollars. When it comes to platforms that profit from communities, and user-generated content, in particular, it’s important for us to ask who generated the value and who is capturing it. But this kind of value extraction in music has happened way before we had an online economy.
AD: How did we get to this point where musicians receive so little of the revenue generated by streaming companies? Where did things go wrong?
AR: There may be differing opinions on this among other Ampled members, but I think the valid frustrations of musicians towards streaming services is a symptom of a larger culture of shareholder-driven capitalism gone off the rails. Pretty much any tech-enabled platform will raise money by selling controlling stakes to investors, which creates a misalignment with artist interests. These problems aren’t unique to music or tech. It’s a Milton Friedman-esque culture that values shareholder profits above the basic needs of other stakeholders, like workers, customers, or, in this case, creative producers.
AD: Tell me about the new web monetization service Ampled is working on. How does it differ from the way, say, Spotify operates right now?
AR: We’re not actively building a streaming service yet, but are working to research what a viable, artist-centered, and collectively owned streaming platform could look like. Through our findings, we hope to make recommendations and present options that we think could be constructive solutions for streaming. The goal would be a resulting open-source framework for a business plan. This research work is supported by Grant for the Web.
“Web Monetization” is a protocol promoted by Grant for the Web. One interesting technical ability Web Monetization allows for is the ability for users to instantly send micropayments to content creators by consuming their content. For instance, there’s a potential to have a streaming platform that circumvents all intermediaries and may charge one cent per every three minutes of music that you listen to, with that money going straight to the creator, immediately. Or a creator could set their own prices.
AD: I know it’s early on, but how is the research going? Any insights you can share?
AR: One question we are exploring is whether or not it is even possible for a streaming platform like Spotify to pay musicians fairly and be a self-sustaining enterprise. Streaming services from tech monopolies like Apple Music, Amazon Music, and Google Play Music all seem to treat their streaming ventures as loss leaders that feed into a larger ecosystem. It’s very possible that the model of streaming that is practiced now is not possible to run as a business that is both profitable and treats workers and producers fairly. Maybe a sustainable and fair version of Spotify in its current form can’t exist.
AD: What do you think is it that would keep a platform like Spotify from fairly compensating musicians? Is it, at least partially, the $10-a-month, all-you-can-eat pricing?
AR: The $10 per month feels very arbitrary. Spotify’s behavior and priorities are a byproduct of incentives, which are derived from ownership. Although Spotify has several different stakeholders, including artists, workers, customers, and shareholders, it’s a publicly-traded company, which means they only have a legal fiduciary responsibility to serve shareholders. They will serve artists only in ways that also benefit shareholders — this is what is keeping Spotify from fairly compensating musicians. If musicians get paid more, investors make less. Maybe the Spotify stock will be adversely affected if increased “content costs” — payments to rights-holders — hurt their margins. The interests are in opposition.
AD: What’s been the response from musicians to Ampled thus far?
AR: The response has been great! We’ve taken an approach of creating Ampled with artists, not for artists. Part of this effort has been organizing artist steering committees to incorporate a broad base of artist voices at the onset. Based on some surveying we’ve done, musicians are far more familiar with co-operative models than the general public. They also have a much more critical view of capitalism. The idea of collective ownership is something that artists find very attractive. We’ve also heard a very loud desire for access and transparency for both finances and decision-making.•