As a major music streaming service, Spotify is understandably under a magnifying lens by its consumers and stakeholders, but the company is making great strides in carbon neutrality, inclusivity and transparency. Spotify boasts a diverse workplace supplemented with a wide range of company programs to improve mental health and create a culture of allyship. It is also working towards providing its musicians with the best resources and payment, though there is room for improvement here in terms of the royalty payment platform. Spotify’s main challenge is carbon emissions made through data storage and streaming as well as travel. Though it still contributes to global greenhouse gas emissions through employee air travel, office maintenance and the Google Streaming Platform, Spotify is progressively moving towards being 100% renewable, and in the meantime is offsetting all emissions by funding three reforestation projects. Overall, Spotify is leading the way in responsible virtual business in an era where streaming is the latest empire. A purchase of the monthly subscription would be a purchase in the green direction, though I would still encourage consumers to hold Spotify accountable and continue to encourage its transition toward renewable energy.
A monthly subscription to Spotify is by no means a traditional good in that it is not material and exists entirely virtually. Nonetheless, though it can be difficult to identify the inputs to this good, this does not mean that the social and environmental impacts do not exist. One input is the app itself which is accessed on both smartphones and computers. This application requires energy to be maintained, which is addressed in the following section. Beyond that, the main input to the Spotify service is the music that 130 million subscribers regularly listen to.
Housing a whopping 50 million songs from 3 million artists, Spotify faces a major social sustainability issue. While some artists argue that Spotify has helped increase their fanbase and popularity, others complain that its current royalty payment system does not create a sustainable income for them to live off of. Currently, Spotify pays a dividend of its earnings to each artist based on their number of streams. At an average of 0.00437 cents paid per each play, this system can create lapses in the amount paid to up-and-coming artists with a smaller number of super fans versus incredibly popular musicians. This issue is compounded by the fact that Spotify does not pay artists directly but instead gives royalties to a middle man, which results in another cut out of the profit. How the current payment system should be altered or replaced is an ongoing debate between the company, the musicians and the listeners.
Regardless, as Spotify has navigated the challenge between supporting artists and still profiting off of its business platform, the company has taken steps to begin resolving this social issue. Spotify provides several exposure and supplemental programs to help artists in their careers, and also has increased the size of payouts per stream in recent years. Though this artist wellbeing issue is ongoing, Spotify is taking action to improve its current payment platform.
Spotify’s major environmental challenge is mitigating the negative effects of the processes that maintain its service. A significant amount of energy is required to store songs in remote servers and to maintain the streaming platform, and up until recently this energy was mostly dirty. 2019 marked the end of Spotify’s transition from its old data centers that depend on fossil fuel emissions to the Google Cloud Platform. Spotify now has three international locations where renewable energy is the main source to maintain the Google Platform. Based on the slightly ambiguous current information, Google’s storage facilities are not fully renewable but are working towards this goal in the near future.
In Spotify’s most recent Sustainability Report, it spoke to other sources of energy use, including a global content delivery network, office maintenance and air travel. For all of these services, CO2 emission data was provided along with goals to cut back on emissions in the following year. As of 2020, Spotify’s offices were 83% renewably run and aiming for an increase to 100% in the near future. Spotify also spoke extensively to its air travel practices, providing details on the level of emissions per employee and of goals to cut air travel by 25% per employee in 2020. The main thing to note here is Spotify’s transparency on its current CO2 levels and its plans for the future.
Spotify reports being carbon neutral, providing information on the projects it has partnered with to counter the company’s current emissions. This information along with describing future goals to cut emissions demonstrates once more Spotify’s commitment to transparency regarding its sustainability. Though the company still contributes to global annual emissions, it is offsetting those emissions to achieve carbon neutrality and is aiming to eliminate those emissions in the future, demonstrating that Spotify is a solidly green company.
When it comes to corporate responsibility, Spotify is leading the way with action and transparency. This is demonstrated by its annual publicly-released Sustainability Report. The most recent 2019 one gives a detailed look into the environmental impact and mitigating actions taken by the company as well as the diverse and inclusive space generated for the employees.
On the environmental end, the 2019 Report mentioned the hiring of Spotify’s first sustainability manager, highlighting the developing emphasis on sustainability within the company. Socially, the report illustrates the workplace community, detailing benefits, surveys released, diversity and inclusion educational events as well as professional development programs. Spotify places a particular emphasis on good mental health within the company, fostering a safe community by developing a culture of allyship. All of these actions taken by the company collectively make it a progressive and inclusive place to work. This healthy workplace with well-rounded employees then paves the way for a quality product to be developed and provided to consumers.
Spotify’s 2019 Sustainability Report: http://q4live.s22.clientfiles.s3-website-us-east-1.amazonaws.com/540910603/files/doc_downloads/2020/03/Sustainability-Report-2019-FINAL.pdf
Spotify’s 2017 Click Clean Rating: http://www.clickclean.org/usa/en/
Environmental Impact of Streaming: https://www.rollingstone.com/music/music-features/environmental-impact-streaming-music-835220/
Spotify’s Corporate Responsibility: https://twntynineteen.wordpress.com/2019/10/30/does-spotify-take-part-in-csr/
Environmental Impact of Spotify: https://www.dpa-international.com/topic/environmental-impact-streaming-music-spotify-co-urn%3Anewsml%3Adpa.com%3A20090101%3A190524-99-365820
How Spotify Pays Musicians: https://www.investopedia.com/articles/personal-finance/121614/how-pandora-and-spotify-pay-artists.asp
Discussion of How Much Spotify Pays: https://musically.com/2020/05/05/spotify-should-pay-musicians-more-lets-talk-about-how/
The Sustainability of Spotify: https://uxdesign.cc/redesigning-spotify-for-sustainability-3165302afca7