DJ Gareth Emery slams Spotify ahead of its April IPO
<p>As <a href="https://www.spotify.com">Spotify </a>readies itself for its big day on the New York Stock Exchange on 3 April, one of its most-streamed musicians has lambasted the platform's claim to be of primary use to artists as 'madness'.</p>
<p><a href="//www.garethemery.com">DJ Gareth Emery</a> can boast more than a million streams a month on Spotify, but says even with that level of international attention he would struggle to make a solid living thanks Spotify's onus on rewarding big record labels over individual artists. It's a view supported by other commentators, who <a href="https://www.theringer.com/tech/2018/3/16/17126048/lil-pump-record-indus… a continuing reduction in earnings per stream for creators</a>.</p>
<p>"The whole system is cloaked in secrecy, nobody knows how much they’re going to get paid or when. It can take over a year to get paid for a stream, and up to two years. Even with over a million listeners, and tens of millions of streams, I couldn't rely on Spotify for an income - so it blows my mind how smaller artists are supposed to manage," he said.</p>
<p>Emery's comments come the day after the Swedish streaming giant conducted an hours-long livestream in an attempt to drum up interest in its forthcoming IPO. Public trading will start after an unusual direct listing on the NYSE - the company is eschewing typical underwriters, skipping the usual price-discovery process of an IPO, and avoiding the usual roadshow of investor presentations, in order to set its own price and go straight to the market.</p>
<p>It touted strong revenue growth of 39% in 2017, up to just over $5bn. While it still operated in the red to the tune of -$378mn last year, chief financial officer Barry McCarthy told potential investors he saw a trend towards the company becoming profitable despite a commitment to fund growth over banking profits.</p>
<p>It's profits that Emery contends are meant for those investors, not the artists on which the platform relies. </p>
<p>“At Spotify’s Investor Day, CEO Daniel Ek says he has created a two-sided marketplace for both fans and artists. However, talking from the point of view of an artist with over a million monthly listeners on the platform, this hasn’t turned out to be the case. 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," he said.</p>
<p>“When it starts trading on the New York Stock Exchange, I’m sure it will be hugely profitable for the venture capitalists, Spotify shareholders, and major record labels that have backed it over the years. However, you won't find much celebration from artists themselves, who once again find themselves at the back of the line for payment of their work after the music industry monopolies have cashed in. It's madness."</p>
<p>A motive behind Emery's excoriating viewpoint is the fact he is about to launch his own competing music streaming service, Choon. Based on the Etherium blockchain, he claims its a service that will return up to 80% of all revenues direct to artists.</p>
<p>Blockchain enabled smart contracts, he says, will also help to cut out costly middlemen and even the labels themselves.</p>
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China Takes Additional Step to Control Big Tech’s Data
China’s new Data Security Law will take effect on September 1st, allowing the government major control over the collection, use, and transmission of data. Tech companies have grown exponentially in terms of market size and overall power, and the Chinese government has no interest in alternative power hubs—especially those that belong to private enterprise.
With its Thursday legislation, companies will face extravagant fines if they export data outside of China without authorisation. The Chinese government claims that this will create a legal framework and help companies from taking advantage of citizens, but according to analyst Ryan Fedasiuk from Georgetown University’s Centre for Security and Emerging Technology, “China’s push for data privacy...is yet another move to strengthen the role of the government and the party vis-à-vis tech companies.”
How Do Other Countries Approach Data Privacy?
- Europe: The EU Charter of Fundamental Rights assures EU citizens the right to data protection. The bloc’s General Data Protection Regulation (GDPR), passed in May of 2018, put stringent restrictions on commercial data collection.
- Canada: 28 federal, provincial, and territorial laws govern consumer data privacy; DLA Piper ranks the country’s data protection legislation as heavy, in comparison to Russia (medium) and India (limited).
- The United States: As usual, the States doesn’t have a single comprehensive federal law for data privacy. Instead, its lawmakers have passed hundreds of local and state acts, many of which are seen by the Federal Trade Commission (FTC).
China, in contrast, thinks data should be a national asset and has written data collection into its five-year plan. Although its new legislation will help curtail private access to consumer data, the government may be the final beneficiary.
What Will China Do With the Data?
According to advisors, consumer data can mitigate financial crises and viral outbreaks. It can protect the interest of national security—no surprise—and help the government with criminal surveillance. Right now, Chinese regulators have summoned 13 major tech firms, including Tencent, JD.com, Meituan, and ByteDance, to meet with China’s central bank. Communist Party Chief President Xi Jinping can shut down any companies found violating the new privacy laws, as well as hit them with a fine of up to 10 million yuan—US$1.6mn.
How Will Laws Affect Foreign Firms?
Now, foreign firms must store data on Chinese soil, a practice that many companies protest will infringe on their proprietary data. So far, Tesla will comply: in late May, the electric car manufacturer promised to build more Chinese factories and keep the resulting information within Chinese borders. In fact, businesses hoping to start China-based businesses—such as Citigroup and BlackRock—will have to comply with the “data-localisation laws”.
The Chinese government has framed data as a critical source of intelligence for the party and central government. “You have the most sufficient data, then you can make the most objective and accurate analyses”, Mr Xi told Tencent’s founder, Mr Ma. “The...suggestions to the government in this regard are very valuable”.
Greater digital control is coming, that’s for sure. Mr Xi has named big data as an essential part of China’s economy, right up there with land and labour. “Whoever controls data will have the initiative”.