By Natalia Kais
The popular music streaming application Spotify recently lost one of its biggest clients: America’s beloved, “good-girl” pop star, Taylor Swift.
In an interview with Time magazine, Swift explained her decision to remove all of her music from Spotify’s library, saying, “I think there should be an inherent value placed on art. I didn’t see that happening, perception-wise, when I put my music on Spotify. Everybody’s complaining about how music sales are shrinking, but nobody’s changing the way they’re doing things. They keep running towards streaming, which is, for the most part, what has been shrinking the numbers of paid album sales.”
- Taylor Swift is one of the first pop stars to openly oppose music streaming. Mark Williams/Flickr
It is easy to side with Swift at first glance. For only $9.99 per month, Spotify users can stream any artist in his or her library indefinitely. Moreover, non-paying members can access the same library as that of paying members with limited advertisements and restrictions. Since other competitors such as iTunes are much pricier than Spotify, Spotify has become incredibly popular and a huge target for legal debates and lawsuits.
The question remains: Are Swift’s claims valid?
Over the past 15 years, revenue in the music industry has declined from nearly $25 billion dollars to about $17 billion dollars. During this time, many companies sought to compete in the online music industry by offering low-price (often free) access to song downloads. The decline in revenue suggests a direct link to the growth in popularity of such streaming sites. Why purchase a single song when it can be downloaded for free with a simple Internet search? Swift’s claim that the rising popularity of streaming has shrunk album sales appears to be valid. However, Spotify insists that its own impact on the music industry is having the opposite effect.
Since Swift’s announcement, Spotify CEO Daniel Ek has been very vocal regarding all of the work that his company has done to combat music piracy on the Internet. In addition to these policing efforts, Spotify points out that the average U.S. consumer spends approximately $55 on music per year. If the Spotify user is paying $9.99 per month for its services, he or she is paying $120 on music per year, generating nearly twice the revenue for the industry than the average user.
Even with these statistics, many critics remain skeptical of streaming providers such as Spotify and continue to stand by Swift. It is ultimately a matter of time before we see whether or not Swift’s decision will spark similar reactions from other artists. As for opposition, one label has already spoken up about the issue.
Jonathan Dickins, manager of the company that represents the popular UK-born singer Adele, has recently spoken out on behalf of the label and reiterated its unwavering support for Spotify and similar applications.
“Streaming is the future, whether people like it or not. Within five years it will be ubiquitous,” Dickins said.
Still, Dickins sides with Swift’s intentions in that he believes Spotify should increase its efforts to persuade users to upgrade from the free service in order to increase the percentage of paid subscribers.
“To get around the situation with someone like Taylor Swift — and Spotify won’t do it — is that maybe there is a window between making something available on the premium service earlier than its made available on the free service.”
Although the majority of its users utilize the free service, Spotify insists that free users generate revenue of the same quantity as premium users through frequent advertisements aired between songs.
Spotify offers potential advertisers a variety of options for their brand, including videos, banners and audio. Not only does this allow for Spotify to take on more sponsors, but it also attracts a wide range of companies. This makes Spotify a highly competitive platform for potential online advertisers seeking the kind of lucrative exposure unique to a music streaming website with such a large number of users.
YouTube, the Internet’s go-to outlet for streaming videos, is Spotify’s largest competitor as an advertising platform. Similar to Spotify, it attracts users by allowing access to millions of artists. Artists most often have their own accounts, sometimes uploading entire albums.
Many websites and applications offer conversion services that turn a YouTube video into an MP3 file within seconds. This generates zero revenue for the artist. Yet, Swift continues to upload her own music to YouTube. This begs the question: Has Swift unfairly targeted Spotify as the only streaming site that, according to her claims, has shrunk revenue for the music industry?
This presents a weakness in Swift’s anti-streaming argument. The pressure is now on Swift to respond to the criticism from the music industry as a result of her decision. It will be up to her fans and streaming users to determine the future of Spotify’s reputation among leading music applications.
