Resonate is the Spotify that puts artists and listeners in control

Platform cooperatives like Resonate are emerging in opposition to commercial services that extract value from other people’s labour

‘Resonate creates a discussion of how to pay music-makers fairly,’ says Roberta Fidora of Curxes (Rob Luckins)

Roberta Fidora, who makes electronic music as Curxes, first heard about Resonate on Twitter. She had listed her music on Spotify, which last year opened to independent artists, but Fidora had begun to question whether big streaming services like YouTube and Spotify were truly democratic. She knew from experience that more experimental artists like herself had always relied on smaller networks for support.

“I wanted to join something that recognised the strength of collaborative ideas and action,” she says, “because these things provide a better experience for listeners and musicians and foster a sense of community.”

Resonate offers community to artists who join as cooperative members and jointly share ownership of the business. Even more unlikely, it offers a fair wage: artists on the platform are paid 2.5 times more revenue than artists on other streaming services. Listeners, who can also become members of the cooperative, get three hours of “free” credits, before they start contributing to the cost of streaming: 0.002 credits for the first stream and then slightly more incrementally until the ninth play, after which the listener owns the song.

Peter Harris is the founder of Resonate, a cooperative streaming service (Courtesy Photo)

RVNG, Ropeadope and Topshelf are among the 700 independent labels on Resonate, which has 4,000 artists, since the beta model of the player launched in 2017. The platform is currently 45 per cent owned by artists, 35 per cent owned by listeners and 20 per cent owned by workers and volunteers.

Platform cooperatives like Resonate are emerging in opposition to commercial platforms that extract value from other people’s labour. A handful of big digital platforms have made it easy for anyone to become a taxi driver, to deliver food or to list their home for rent, for example, but they have also faced criticism for exploitative working practices that do not offer basic protections to users. A spate of data scandals have revealed further security problems with for-profit platforms.

In 2018 Cambridge Analytica, a consultancy, was revealed to have harvested the data of 87 million Facebook users through a quiz app and sold it to the Donald Trump campaign. The scandal revealed how little control users have over their data. Pete Harris, the founder of Resonate, believes platform cooperatives can have a role in returning control to users. “It was clear to me when I started that I wanted to start as a coop because it’s the only business model that gives users a voice,” he says. “This isn’t just about musicians owning a platform, but also people owning the tech they use.”

Harris believes these data scandals are the start of a shift in public opinion towards the understanding that paying for services can offer data privacy and fair compensation for artists. Resonate is not the only co-op providing an alternative to for-profit platforms. In the Upper Calder Valley in West Yorkshire, Equal Care Co-op is supporting a small group of care workers and receivers testing a way to provide social care.

The Equal Care platform, which is owned by people giving and receiving care, offers greater transparency and a salary to care workers of £20,000, or 25 per cent more than the industry average. In another example, photographers from all over the world own a stake of Stocksy United, a stock photo agency based in British Columbia, Canada, that pays 50 per cent royalties on creative content sold – higher than standard market rates.

While cooperatives do not necessarily grow more slowly than corporations, they tend to grow based on the needs of their members, rather than by rapidly expanding into new markets. This kind of growth can make cooperatives less attractive for investors like venture capitalists, who take a risk on the potential of the platform to grow quickly and reap financial rewards when the company is sold or goes public.

Harris says there was a moment early on when he realised he would have a hard time finding funding: “When I started Resonate there was a point at which I thought this isn’t going to work, it’s going to be unfundable, and it still is,” he says. Resonate received a $1m investment from RChain, a Seattle-based blockchain system cooperative, to redevelop the app, but much of the value of this investment was lost when the cryptocurrency market dived last year.

“Scaling beyond a certain size has been problematic in the past, because the bigger the scale the harder it is to maintain democratic engagement,” says Jenni Lloyd, coauthor of a report about platform cooperatives by Nesta, an innovation foundation. She believes an alternative to one central digital platform may be for digital cooperatives that are rooted in place, like Equal Care Co-op, to operate in franchises, using central technology to create smaller-scale iterations that remain accountable to nearby users.

Another option is for platform cooperatives to sell shares in the service to social investors who are willing to leave in their money for the longer term, through a system of mutual shares. Mutual shares are a variation on community shares that have raised £150m for 500 enterprises across the UK since they emerged in the past decade.

Community shares are often based on buying shares in an asset, such as a pier or a village hall, which can limit opportunities for shareholders to get their money out. Platform coops are much less likely to be rooted in place because they are digitally based. Mutual shares offer flexibility through dividends, paid to shareholders. These returns make easier for shares to be sold on to new investors and for early investors to recoup their capital, mimicking the traditional trajectory of financing through venture capital.

“It’s experimental, but there’s this idea of social impact as an alternative to the commercial platforms that can have negative effects,” Lloyd says. “We’re not saying platforms are a bad thing because they offer huge benefits, but we need to think about greater diversity in the ways they are owned and operated to combat the more negative aspects. Venture capital is not the only way to start a business that can scale.”

Fidora says most streaming services treat music as a secondary commodity in order to sell a bigger product, like a phone or a smart home device, or as a way to make money for shareholders at the expense of labels and musicians. “Resonate creates a broader discussion of how to best serve listeners and pay music-makers fairly,” she says. “That is too important a conversation not to have.”