Spotify To Taylor Swift: We’re Not Screwing You Over, Record Labels Are

Spotify To Taylor Swift: We’re Not Screwing You Over, Record Labels Are

When Taylor Swift pulled her music from Spotify, she was absolutely right that the whole streaming music system is screwing over artists. But that’s not Spotify’s fault.

Last week, just after her hotly anticipated record 1989 was released, Taylor Swift abruptly pulled her back catalogue off the service, citing a respect for creative people as her primary motivation:

I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music

She’s right. The artists and actual creative people behind music get completely screwed by streaming music — just as they have by the recording industry for eons.

In a post published today, Spotify CEO Daniel Ek explains that his company has paid out $US2 billion in royalties since it was first founded to “labels, publishers and collecting societies for distribution to songwriters and recording artists.” The implication is that somehow, that $US2 billion never made it to the artists themselves.

The explainer is long and attempts to unpack the “myths” surrounding streaming music. It’s not perfect by any means, but the subtext is very clear and spot on: It’s not Spotify that’s screwing over artists, it’s record labels. More broadly, Ek claims, correctly, that the way recording industry is set up isn’t really working for artists. He’s also right that Spotify is a novel approach that’s getting money out of people who wouldn’t have otherwise paid, even if that’s not very much money.

Now, it’s not clear exactly how much of Spotify’s $US2 billion in royalties actually trickles down to artists. But as Time reported the last time this debate cropped up, under the old physical media model, artists frequently pocketed less than 10 per cent of the selling price. That’s always been a bad deal for artists.

The controversy is that Spotify is, by the numbers, an even worse deal for musicians than anything that existed before. With streaming services there’s no album “selling price”, just payment per play — a trickling of pennies that can feel tiny by comparison, and for many artists pales in comparison to album sales.

Which brings us back to the the Taylor Swift example. The reality is that being the ludicrously famous pop star she is, Swift can actually sell a lot of records in today’s fraught digital music marketplace. Like others who have removed their music from Spotify — including Adele and Thom Yorke — Swift can be fairly certain that she’ll make way more money selling music on iTunes and other marketplaces.

In the Spotify explainer, Ek brags that if Taylor Swift had stuck with Spotify, she would have pulled in a cool $US6 million from the service this year, which is, flatly, peanuts compared to what she can command from digital music sales. Consider that 1989 sold 1.28 million copies its first week. At the going $US12.99 digital price for the record, 1989 pulled down more than double the money in a single week than Swift would have in an entire year on Spotify.

So she has no incentive to stick with Spotify, and take a moral high ground while she’s at it. But it’s not as straightforward as that simple maths. What about the people who eschew piracy for a Spotify subscription but wouldn’t shell out for a digital download?

It’s not as simple as saying “OK everybody keep your music off Spotify.” The only reason the record labels ever agreed to sign on for services like Spotify in the first place is because digital music sales had failed to make up for the decline in physical media sales.

The reality is that since the late 1990s, paying for music has been optional because it’s so easy to steal it. No amount of whining about an artist’s right to a living is going to compel somebody to pay for something if they don’t have to. A $US10 per month streaming music service is something people will pay for — and that’s better than nothing.