Commodification 2.0: How Does Spotify Provide Its Services for Free?

Abstract

It is widely argued that applications on the internet, especially the software on which the Web 2.0 platforms perform, cause transaction costs to diminish and help such platforms provide their services for free. In this paper, we challenge this argument. We claim that there is no causation between the diminishing transaction costs and the free supply of online services. Focusing our attention on Spotify, we argue that a new economy of data extraction, which we call Commodification 2.0, favors giant internet corporations in such a way that they appropriate the value that online users collaboratively produce. Music artists, however, are either underpaid or not paid at all.