The Eurythmics 'bloke' has changed his mind about Spotify and explains why all his gold records get sent to north London

"Thom Yorke made a mistake there, him and Nigel Godrich," says Dave Stewart, addressing the pair's criticism of Spotify and the royalties it pays artists. "They were misinformed. I think they just suddenly got a bee in their bonnet, because Spotify is one of the few companies that is transparent and actually pays properly – as a songwriter you should worship Spotify, because they've come along with a solution."

It's an interesting turnaround for the songwriter, producer and one half of the Eurythmics, who told consumer technology magazine Stuff in a 2012 interview that he would earn $47 if his album was streamed non-stop for three years on the music streaming service, and that newer artists would be better off "selling their albums out of the boot of a car".

Stewart now says Spotify's problem lies with its low number of subscribers (currently standing at more than 6 million globally, according to the company). "It's a volume business. If they had 100 million subscribers, which is possible, the payment [for the Eurythmics catalogue] would be equal to the band's income back at the peak of selling," he claims, adding that the way money is distributed by the labels to the artists is another problem.

We're sitting in the Hospital, the London private members club he co-founded with the aim of creating a hub for creators, after a screening of the video for his new single, Every Single Night. Following Stewart's train of thought takes concentration as it bounces between a multitude of new ideas and ventures that he's involved with, interspersed with entertaining anecdotes.

With four decades of experience in the music industry, his view of record labels is, to say the least, tainted. "You see record labels are the devil," he says, leaning in. "Record labels and publishing companies are the worst banks in the world … My own record label boss [Jose Menendez] was murdered by his own kids, and through that murder me and Annie [Lennox] found out where most of our royalties went.

"There was a very famous trial [following the murder] called the Menendez trial. He came from Hertz rent-a-car to run RCA Records in the US [the label was owned by Hertz at the time]. How weird is that? And that's who I had a meeting with for our third album. He was this huge Columbian guy. He shook my hand, saying: 'Love the album – it's just like Ghostbusters.' Ghostbusters?"

There's no doubt that problems arise when labels are owned by corporations that have no experience in dealing with artists.

Perhaps Stewart's reference to labels and banks stems from the fact that a bank was essential in making Eurythmics album Sweet Dreams a reality. After every label turned the band down, he calculated they'd need £5,000 for the equipment to record it by themselves. He went into the local bank in Crouch End, London, and explained to the bank manager that if they could get the equipment they would own the record and the next album.

"We both looked really weird, and Annie was really embarrassed, but at the end of my speech he just said 'that makes sense' and gave us the money. About a year and a half later we put £8m back into his bank. We've sent him all our gold records ever since."

While Stewart has little love for traditional record labels, he has even less love for technology companies and anti-copyright campaigners who expect music to be free. He says his income from music has gone down by 92% in the past decade. "Could you imagine teachers being told that they suddenly would only earn 8% of their income? They wouldn't be able to survive."

He also thinks reducing the length of copyright is "ridiculous". "Imagine if your dad built a business making train engine parts and bought a house and then he had a daughter and was told that it's all public domain now," he explains. "What the fuck? Why are they picking on musicians? Pick on something else!"

Stewart recalls Paul McCartney's lawyer telling him about a decade ago that all the music that had been made already would always be worth more than any of the music produced for a thousand years to come, because of the internet.

As the possibility of Spotify gaining 93 million additional subscribers any time in the near future appears remote at the moment, what should artists do to survive? Stewart takes a leaf out of Neil Young's book, banking on people being willing to pay for better sound. His soon-to-be-released album comes as an app that includes a feature-length film ("it's like Purple Rain or the Beatles' Help"), and is recorded in 11.1-surround sound.

He's also involved with Talenthouse, a company that puts brands together with artists. "Many artists say they don't want to work with brands – and then it turns out they're signed to EMI, which made missiles [Thorn EMI was until the mid-1990s one of the UK's largest defence companies]," he chuckles. "Ben & Jerry's is quite nice, actually – and they've got more stalls than EMI does."

But what he's most excited about at the moment – apart from the release of his "album-movie app" – is a new artist-funding venture that he'll announce at the Reeperbahn festival. My lips are sealed but, hint, it's inspired by the American Farmers Bank.