Why Spotify Turned Down Adele's "21"

You didn't read that backward. Adele was willing to have her album "21" available on the streaming music service. But Spotify would have had to change its whole strategy to accommodate her.

If you were one of the millions of fans who tuned into Sunday's Grammy Awards, you likely saw Adele belt out "Rolling In The Deep" from her chart-topping album and take home a half-dozen trophies, including prizes for Song of the Year and Album of the Year for 21. But as many quickly pointed out, you couldn't get the songs from that Album of the Year on Spotify. It is not available for streaming there.

Such jarring absences represent a constant criticism of the popular subscription-based music service's catalog, and it's a big reason why some consumers resist switching over from iTunes. Critics often highlight missing content on Spotify--say, albums from acts such as the Black Keys and the Beatles--implying that many big-name artists aren't onboard with the streaming platform, or perhaps that the 3-million-subscriber-strong service with more than 15 million songs in its catalog isn't yet ready for prime time. But, if it's any indication of where the industry is headed, it turns out that Adele was indeed willing to have her album 21 available on Spotify--but given the option, Spotify ultimately decided not to stream the album, according to sources. Here's why.

Multiple sources confirm that Adele was willing to play ball with the streaming service, as long as the content was accessible only to paying subscribers and not to its freemium users. Spotify has a freemium-to-premium model: Users can gain ad-supported access to Spotify's entire music catalog for free; to remove the ads and gain mobile access, users have to pony up as much as $10 a month. Ultimately, Spotify decided it did not want to split up its content catalog, so as to create separate music libraries for paying subscribers and freemium users. Thus, it was essentially Spotify that decided against providing streaming access to Adele's content for paying subscribers--not the other way around.

Instead, as some have noticed, Adele's 21 eventually wound up on Rhapsody, which only offers paid subscriptions rather than a free, ad-supported service.

The various strategies are understandable depending on the perspective. For Adele, it's clear she's willing to make her content available for subscription streaming, but is not interested in giving away her music to free users in the slight hope of possibly helping to drive Spotify's freemium-to-premium conversion rate. She is willing to provide her music to those who are willing to pay for it, plain and simple. And who can say her thinking is wrong? With more than 17 million albums sold worldwide, it's no wonder why Adele wasn't too concerned about gaining revenue from streaming services right up front, especially if it meant giving her music away to free users. (Coldplay, too, did not release its latest album, Mylo Xyloto, on Spotify until months after its release, anticipating that the most amount of revenue would come from traditional sales at the beginning, while windowing the streaming release for longer-term revenue.)

On the other hand, Spotify, which declined to comment on the matter, demonstrated its commitment to its freemium-to-premium business model here. Spotify believes its free service will drive subscriptions--and it's willing to sacrifice access to the best-selling album of the year over that belief. And with the service growing by roughly 8,000 subscriptions per day, boasting a 20% conversation rate, and touting a successful Facebook partnership, it's hard to knock that content strategy.

But most significantly, the insight proves that not all streaming services are built alike. The digital space is crowded with competitors--other players include MOG and Rdio--and they don't all offer the same music in a different format. Adele's 21 was available to Rhapsody's paying subscribers; Adele's 21 was not available on Spotify, even if you paid for a subscription.

If anything, it shows how complicated this emerging platform has become for the industry, and the different priorities involved for artists, labels, and the streaming services themselves.

[Image: Flickr user Ben Houdijk]

Add New Comment

10 Comments

  • liver

    A subscription-only separate library would be fine by me. I would even pay twice or 3x as much for the Spotify service to have more music included if it means that the artists get paid commensurately. From what i've heard, the musicians on Spotify do NOT get paid enough and that's not right.

  • tri noensie

    Black Keys? Rdio got it. Beatles? Rdio got it. Adele? Rdio definitely has it. $5 online subscription. 

  • Greg Golebiewski

    Well, the reason might be different and quite simple. Spotify would lose money on Adele, as the paid subscription provides unlimited streaming and each stream cost them something. Imagine millions of subscribers streaming Adele's hits severe times a day within what they pay now... 

    Which only shows (again) that Spotify is not for the music or the artists -- it is a business like any other, using music to generate profits (no judgment here). but no illusions that Spotify is to save the industry

  • Barry Braksick

    I have to believe this is driven by the slippery slope argument for Spotify. If they agree to create another category for Adele, how many other artists will want to be included in it? If there are too many defections, the freemium Spotify won't have enough juice to keep new subscriptions pace up, and then they're Rolling in the Deep.

  • Jaunique Sealey

    Hey Barry!  That's why I think that this article is so interesting.  This is the actual question - is Spotify right about its business model?  There is a lot of artist revolt against freemium, and the access model, generally.  Does this mean that Spotify should also consider other blended options?  Like, what if the free portion of the service is more skewed toward amazing discovery and the premium portion skews more toward access of top-tier content?  I think that Spotify has an opportunity to adjust its strategy at this point in its lifecycle to be responsive to the valid (and possibly growing) concerns of artists.  So interesting...

  • Barry Braksick

    I like the idea of discovery vs. top-tier. I really do hope that better discovery tools will help the music industry avoid the blockbuster mentality of the film business, and give more artists a chance to find an audience. A question for you: any idea of what the relative compensation is for songs streamed on Spotify by subscribers vs. freemium customers? An article in Rolling Stone from a few months back ("The New Economics of the Music Industry") makes the Spotify payment scheme sound... complicated!

  • Jaunique Sealey

    As far as any specifics on royalties from Spotify, I wouldn't be able to disclose, but the Rolling Stone article is a pretty good barometer, I think, across the different revenue streams. The reality is that regardless of the actual royalty, there's not "that much" money to be made within this model until it reaches the scale that everyone intends for it. That's why I'm so interested in how the artists are reacting. In my opinion, adoption of the subscription model is something for which everyone has to be on board, artist (and label), service and customer/consumer - on the same page and moving forward in sync. Everyone will have to want it equally if this is to become a reality for the commercial future of music.

  • Jaunique Sealey

    I love this article.  It perfectly encapsulates a much larger issue that is confronting the entire music industry.  I actually think that both parties are right.  Spotify is right for sticking to its guns on the ideals of its business-model and Adele is right for standing up for the way that she thinks that her content should be accessed.  The real question is, "who does the average consumer think is right?"  What's also great about this situation is that neither Spotify or Adele have anything to lose by riding this one out.  If too many artists follow suit on Adele's decision, Spotify can always make adjustments to its business model before destructive effects.  And after winning several Grammys and having a massive hit album in terms of actual and continuous sales, not being on Spotify has pretty much no substantial impact on Adele, so she can afford to stand her ground.  Will be watching to see how this plays out.

  • Jason Fidler

    I wonder how many other artists would be willing to allow their songs on Spotify to only those who are paying subscribers.  If this would convince Coldplay, The Black Keys, The Beatles, etc. then I really don't see what Spotify has to lose. It would not adversely affect their growing customer numbers, and would only further tempt existing customers to switch over to their premium model. The only reason why I even keep my iTunes account is to listen to my Beatles albums.

  • Sagi Katz

    In my humble opinion, this is the wrong approach by Spotify. It all boils down to managing users' expectations. 

    Spotify is strong enough to negotiate and set a release window framework for inclusion of newly released songs X months after their release onto its free service. This way, users will grow accustomed to expecting new popular songs, as they are made available, on the premium service, only to "move" to the free tier a few months later.  Why is this a winning strategy, you ask? One the one hand - new songs will appear on its service day one, such as from "21", making the premium service more valuable in the eyes of existing premium subscribers (great new songs to listen to and another reason to keep the service), free subscribers (may create an opt-in incentive or higher retention, as they will expect to have access to these new songs in a few months) and last but not least - new users looking to find the value of the service.

    Will this push all new content to exist only on the premium service, thereby diluting the free? I don't think so. Only elite musicians will look to create an optimal release window model for themselves (and even then - not necessarily on all songs). They all likely already understand the power of free, as a lever to their business.