In pulling her entire catalog from Spotify, Taylor Swift took a jab at streaming music. According to Swift, streaming services like Spotify don’t pay artists enough. That’s something we’ve touched on before, and she’s right — they typically don’t. Artists get paid by volume of played tracks, so for the house DJ in Prague looking to be discovered, streaming isn’t so lucrative. Taylor Swift, however, is Taylor Swift. Spotify CEO Daniel Ek took exception to Swift’s commentary, and has issued a response.
According to Ek, Spotify has paid out over $2 billion to labels, collection societies, and publishers for “distribution to songwriters and recording artists”. Ek says in the last year alone, one billion dollars has been distributed, with the first billion taking six years or so (Spotify was started in 2008).
Even more interesting is that Ek says an artist as popular as Swift (he didn’t specifically note her earnings) typically earns in excess of $6 million annually. Furthermore, Ek says each play earns an artist some money, whereas radio would earn them nothing.
Here’s the rub: both Swift and Ek are right. They also seem to be saying the same thing, just in different ways: record labels are probably to blame, here.
Swift says that earnings per play are minimal, and she’s right. To scale, though, she would clear $6 million or so this year. that’s a big deal for most artists.
Ek’s Spotify pays record labels or other entities, who are then charged with distributing the money to artists. Ek and other Spotify staff likely have no concept of what individual artist contracts are with those labels; they pay a fee per play, and that’s their end of the bargain.
Ek seems to get it a bit better, though. He points out our listening habits and wants from a music service are changing, and he’s right. Streaming is the new iTunes, made even more evident by the creator of iTunes paying a lot of money for a streaming service.
If Taylor Swift thinks she can make a better living via sales, it’ll be another “grand experiment” you can expect she’ll back out of when it no longer suits her.