Spotify didn’t break the system on its own. It inherited it. And like any smart startup walking into a rigged game, it played to survive — cutting deals, kissing rings, and keeping quiet. But now it’s no longer the underdog. It’s the house. And the same old rules that built its empire are the ones still starving songwriters.
So the question is: will Daniel Ek change the game, or keep cashing out?
Spotify didn’t solely cause the songwriter crisis — the disappearing royalty checks, the broken splits, the vanishing middle class of music creators — but it sits right in the center of it. And that’s exactly why Ek is the one person with the power to fix it. He didn’t ask for the problem, but it’s on his doorstep. And he’s finally rich and independent enough to do something about it.
Let’s be honest: Spotify didn’t rise because of cozy deals — it rose in spite of them. Ek built a global tech giant with sharp strategy, relentless vision, and a little help from the majors, who handed over equity in exchange for early access. That bet paid off — for Spotify.
With a market cap now topping $145 billion, Spotify is worth more than most of the companies it licenses music from. Universal is valued at $56B. Warner? Just over $15.5 billion. And Ek? He’s sold more than $800 million in stock since 2023 alone — more than many of the songwriters on the platform have made combined. That’s not just a bad look. It’s a stat you can’t explain away.
Yes, he earned it. He helped assemble the biggest music library on earth. But when the guy holding the keys to the industry cashes out like a Silicon Valley titan while songwriters are still being paid like baristas, something’s broken. Ek’s net worth is closing in on $10 billion according to Bloomberg’s Billionaires Index. He can afford to lead — and it won’t cost him much to do it.
Still, to this point, Spotify’s recent decisions have made an adversary out of the songwriter class. The company took on significant criticism in the business last year for electing to pay out less to songwriters through a controversial bundling strategy with audiobooks, a move that caused the Mechanical Licensing Collective to sue the company. Spotify emerged victorious in that legal dispute earlier this year as the suit was dismissed. The NMPA stated back in June that the strategy has already cost publishers $230 million so far. Spotify, for its part, said earlier this year that it has paid $4.5 billion in royalties to songwriters and publishers in the past two years.
Bundling is the latest blow to the writer’s demise. Spotify’s push to boost subscribers by packaging music with audiobooks may help its bottom line, but it drags songwriter royalties down with it. When music becomes just one piece of a discounted bundle, the revenue attributed to it shrinks — and so do the mechanical payments. Songwriters aren’t just getting the smallest slice of the pie; now the pie itself is smaller. It’s a textbook case of the system working for growth, but not for the people who make the product.
Bundles aside, Spotify needs to take on songwriters’ lousy terms because everyone else is compromised. Legacy music companies benefit from the current model and are mired in conflicts by housing both record labels and publishers’ interests. To that end, the publishers, representing songwriters, answer to their bosses, the people overseeing the record companies. Less a push-and-pull than a noose where one side is looking to maximize profits by minimizing payouts to the ancillary non-artist players that their colleagues represent. Their fate is tied and it leaves over 100,000 songwriters without an unencumbered advocate at the table.
All three major music conglomerates — Universal, Sony and Warner — have had equity in Spotify, with Warner selling all of its Spotify shares in 2018 for over $500 million while Sony sold half of its shares for $750 million . How do they determine payouts for artists on their roster? Via a complicated formula which aggregates the whole of streaming activity and apportions a sum to rightsholders by their percentage of market share. In this pro-rata model, the top 1 percent of artists earn more than 90 percent of total streaming revenue. From there, it’s on the labels and publishers to assess earnings based on individual deals. In recent years, both Spotify itself (via its Spotify for Artists service) and many labels have instituted dashboards that are meant to provide transparency to the artist when it comes to accounting. No two deals are the same.
How did we get here? Let’s rewind. When the streaming wars began around the early 2010s, the music business perked up. There was no way the industry would blow it a third time — after fumbling Napster and handing Apple’s iTunes the keys to the kingdom for 99 cents a song — this time, they swore they’d get it right.
So they played hard to get. The big players watched the in-fighting between nascent services to see who would gobble up the other. They slapped a chastity belt on their song catalogs and made tech beg for access. And when Spotify emerged as the dragon-slaying supplicant of the new world order and came calling, music squeezed several years and every crumb on the plate to close a collective deal— not just for licensing fees, but ownership stakes in Ek’s startup to the tune of 20%. The majors didn’t just agree to terms; they jumped right into bed with the shotgun wedding already on the books.
Now they’re shareholders, controlling nearly three-quarters of what got streamed in 2024 — a decrease from 1994, when six majors controlled over 85% of the airwaves. But two factors define the difference: back then, there was no streaming partner taking 30%, and there are still only 100 pennies in a dollar.
The tech giants don’t need music to survive. But Spotify? It only works if the song does. The service doesn’t own many music copyrights or control catalogs. Spotify is not beholden to or defensive of the past. Spotify’s premium users are in effect renting the songs. Even if a listener downloads a track off the platform, it will be wiped from their library once they cease subscribing monthly.
Spotify is reaching the age of puberty and still has the chaos and creativity of a teenager — the kind who might wreck the car or rewrite the rules. That’s not a liability. That’s the X factor. They can be the company that finally fixes this and changes the financial trajectory of songwriters forever. And no one else is even trying.
If Spotify were to use just 3 percent of its 2024 net profit (around $39 million) to boost payouts for qualifying songwriters, it wouldn’t be life-changing for most, but it could cover, say, health insurance, which neither record companies nor publishers provide. But what about this:
If Spotify truly wanted to change the economics of music forever, it should grant 1 percent ownership in the company to songwriters. That 1 percent shifts the entire landscape — not symbolically, structurally. A 1 percent equity stake — worth over $1.45 billion — could be placed into an irrevocable 30-year trust, designed and governed by a writer-led organization in partnership with labels, PROs, and publishers. This isn’t a Washington lobbying arm, but an industry-rooted, cooperative body with shared oversight and aligned interests. The trust would be repaid gradually through revenue generated by writers themselves, supported by proportional contributions from labels, pubs, PROs and all broadcast platforms–essentially all entities who profit from the use of songs.
Managed at a conservative 5 percent annual yield, it could generate $72.5 million a year — enough to finally fund the kind of infrastructure writers have always deserved. With just a third of that, 50,000 eligible writers could receive basic health coverage, career services, a 401(k), even access to a songwriter-focused credit union. The rest could support emergency relief, innovation grants, and profit-sharing. After 30 years, full ownership of the stake would transfer to the songwriter community outright. Not a payout. A future — built by the people who power the product.
Here’s the other unspoken truth: songwriters aren’t built for battle at the moment. Some are loners. Most don’t have managers. They aren’t on stage with a mic and a fanbase ready to fight for them. They’re not organized to collectively bargain and are often invisible in the food chain. So with no one fighting for their cut and no fairy dust to add more pennies to the dollar, they’ve been left on the bench like a third-string punter in the game they created.
It’s all about the song. Always has been, always will be. No producers, no artists, no studios — and no Spotify — without the song. If Spotify ascends, the rest must follow suit. This isn’t welfare — it’s an overdue music industry wellness renovation that could fix the leaky roof but for good. I am not saying Ek should fund the entire ecosystem — just take the first step: Commit to standing up and staying in. Don’t drain the golden goose and cash out; pony up hard, and become the company that saved music. The solution is clear, realistic and within reach. And the shareholders will love it. Music history is legacy and the opportunity to seize yours, Daniel, is right there in the bridge.