advertisement
advertisement

Spotify’s CEO Said Taylor Swift Would Have Made $6 Million Had She Not Pulled Her Music

“Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters,” he writes.

Spotify’s CEO Said Taylor Swift Would Have Made $6 Million Had She Not Pulled Her Music
[Photo: Flickr user Clarence Ji]

Like a mama grizzly circling her cubs, Spotify CEO Daniel Ek fired back at Taylor Swift for her decision to yank her albums from the streaming-music service. The blog post is very defensive and sort of thinkpiece-y, but the crux of Ek’s argument is that Spotify isn’t the enemy—piracy is. Ek writes:

advertisement
advertisement

Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work. Quincy Jones posted on Facebook that “Spotify is not the enemy; piracy is the enemy”. You know why? Two numbers: Zero and Two Billion. Piracy doesn’t pay artists a penny—nothing, zilch, zero. Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists.

Which, okay. Fine. Two billion dollars is not an insignificant amount of money! Then, dripping with pathos, Ek goes on to say that when he hears stories about artists and songwriters who are frustrated that they haven’t made any money from streaming, he gets “really frustrated too.”

It gets a bit confusing when he goes on to note that the free, ad-laced version of Spotify drives paid memberships, of which there are 12.5 million. “Here’s the key fact,” he continues:

more than 80% of our subscribers started as free users. If you take away only one thing, it should be this: No free, no paid, no two billion dollars.

All told, he says Swift was on track to make $6 million a year before she pulled her albums, and “that’s only growing.” That figure was expected to double next year.

Spotify is right to be defensive. Swift is one of the biggest draws on the planet, and while that sets a scary precedent for the streaming service should other big pop acts decide to follow her lead (if Spotify is missing a handful of the biggest musical acts on the planet, who would pay for it?) it also makes her something of an outlier.

So let’s look at another example. Last December, Spotify made its revenue model public in a bid for transparency with a microsite called Spotify for Artists. At somewhere between $0.006 and $0.0084 per play, the company estimates that with “net royalties,” an artists in the “Spotify Top 10” albums—not necessarily a super-consistent megastar like Swift, but maybe an Imagine Dragons or something—could earn $145,000 a year.

advertisement

But as Ben Kaye at Consequence of Sound wrote at the time, those payments go to the individual song’s rights holders (i.e., the record labels), and not the artists directly, which seems to be the issue that artists like Thom Yorke and David Byrne of the Talking Heads care about. “If Spotify’s formula is accurate,” writes Kaye, “it does appear that the payment problem stems from artists’ royalty agreements, something that may need to be changed in the streaming era, but that ultimately Spotify has little control over.”

So the central friction is this: Spotify feels like it is getting fans—12.5 million of them, remember—to pay for music again, which is something that should be commended. An increasingly vocal group of musicians, on the other hand, feel that Spotify’s free model (which 50 million users fire up every day) devalues their work and spreads the perception that people should be able to listen to whatever they want whenever they want, at least if they’re in proximity of their computers. In all likelihood the truth is hidden in the vast, hazy fog between the two poles.

In Swift’s case, at least, it doesn’t seem to be an issue of whether she makes an extra $6 million or not, and—if she’s telling the truth, and I have no reason to believe she isn’t—she made that pretty clear in a recent interview with Yahoo News. By pulling her catalog and only making it available on pay-only services like Rdio, she’s taking a very public stance on how she thinks music in the digital era should be valued, as is her prerogative. “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,” said Swift. “And I just don’t agree with perpetuating the perception that music has no value and should be free.”

advertisement
advertisement

About the author

Chris is a staff writer at Fast Company, where he covers business and tech. He has also written for The Week, TIME, Men's Journal, The Atlantic, and more

More