The internet wants a Spotify 'tip jar'

Spotify NYC

Business Insider/Rebecca Borison

The idea of paying artists directly, "what you want," in exchange for their music, isn't a new concept on the internet.

Some artists have done it have done it through their own websites, Kickstarter, or more commonly, Bandcamp. Bandcamp provides multiple models for paying artists, but many use the "name your price" version, which allows fans to pay whatever they want. Bandcamp takes a percentage (usually 15% for digital album sales, plus processing fees). In this use, the Bandcamp download feels closer to a tip jar than an album sale.

But this functionality doesn't exist on Spotify, the world's most popular streaming service with 30 million paying users, and Reddit wants to know why. A post calling for a Spotify tip jar spent much of Wednesday on Reddit's front page, garnering over 2,000 comments.Advertisement

"Why isn't there a 'tip jar' on Spotify? I would gladly pay bands I like $10 or $20 for a record I love, if I knew it went straight to them," the post says. "Spotify would take a cut, obviously. But even if 80% of it went to the band, it would make a huge difference for struggling artists putting out sick records."

What does Spotify think about a tip jar?

Spotify declined to comment on this particular point, but an interview Business Insider had with Spotify's Jim Lucchese last month might shed some light. Lucchese is the CEO of The Echo Nest, the music data company Spotify acquired in 2014 for a reported $100 million. It's his job to turn the data Spotify has on its users into something the company, and artists, can make money off of.

One of the things Lucchese said Spotify was excited about in the future was the idea of "fan funding."

"[Spotify] can be a platform that can really help facilitate and drive fan-funding initiatives," he said, referencing examples including having fan contributions help finance a new record. "We've got the fans. We know where they are. We know those fans want to support those artists. That's a really intimate and direct way of doing it."

Lucchese says Spotify wants to become a hub for an artist's entire revenue strategy, including helping them decide where to tour and which fans to contact. The key, he says, is in a smart application of Spotify's trove of user data.So while Spotify is keeping quiet about a tip jar specifically, it seems like it would fit well into the company's drive to open up new revenue streams for artists.Advertisement

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