Spotify CEO Daniel Ek fired back at Taylor Swift following her contentious decision to pull all of her music from the popular streaming service. In a Wall Street Journal op-ed, Swift aired her frustration with the direction that the music industry is going. She lamented the fact that consumers are increasingly placing a lower value on music, saying that “music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free”. Swift continued, saying that “my prediction is that individual artists and their labels will someday decide what an album’s price point is.”
Swift did in fact set the price for her latest album, 1989. Evidently, not as many people as she would like are willing to pay her price of $12.99 for the album or $1.29 for an individual song. An increasing number of consumers are refusing to pay the full price of albums, but they are willing to meet artists in the middle and subscribe to services such as Spotify, who charge a flat rate of $10.00 a month and then pay artists a royalty for their music.
One of Swift’s primary reasons for splitting with Spotify is that she is unhappy with the amount of compensation that she and other artists receive for their music. On average, artists make less than one cent per stream from Spotify. Ek acknowledged that the royalty is indeed low, but pointed out for an artist like Swift, a one-cent-per-stream royalty quickly translates into millions of dollars in payment. In fact, Ek said that “payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that’s only growing.”
The reality of the situation is that consumers aren’t choosing between buying Spotify or a full priced album, they’re choosing between Spotify or finding pirated music elsewhere. Swift’s argument would only be valid if the alternative to streaming services was consumers actually buying full priced albums. This is not the case, as can be seen on pirating services such as Grooveshark and Pirate Bay, where Swift’s 1989 is number one on the charts. Swift can fight the direction the music industry is headed all she wants, but she stands with a lot to lose and little to gain.
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