It used to be that when we heard a tune on the radio we liked, we would buy that record. Times have changed—over this last decade, there has been a decline in sales for recorded music. The company Spotify believes that they are a new music economy, one where everyone can participate.
Spotify is attempting to regrow the music industry and give artists the money they deserve. Over 70 percent of Spotify’s revenue goes to the record label, publisher, and distribution outlets while 30 percent goes to Spotify. The conventional wisdom is that Spotify’s long-term royalties are more beneficial than mainstream “conventional” sales.
Streaming has caused the number of paid sales to decrease, and every artist is handling it differently. Artists earn on average less than $0.006 and $0.0084 per song that is streamed, according to Spotify artists. Some artists compensate by selling t-shirts and concert tickets; others remove their music entirely.
On November 2014, the debate came to a head when Taylor Swift pulled her music from
Spotify, stating she did not want her work to be used as an “experiment”. She believes artists should say “no” to low-royalty streaming services. Swift’s single ‘Shake It Off’ was number one on Spotify. For someone as popular as Swift, a one-cent-per-stream model would rack up millions.
Swift said in the UK newspaper, The Independent, “In my opinion, the value of an album is and will continue to be, based on the amount of heart and soul an artists has bled into a body of work and the financial value that artists and their labels place on their music when it goes into the marketplace.”
The famed front man of U2, Bono, has a different opinion. He responded to Swift’s protest by saying at the Web Summit conference in Dublin, “Let’s experiment. Let’s see what works,” according to The Guardian.
Swift is not the only musician who has taken a stand against streaming. David Bryne of the Talking Heads believes that the Internet is taking away the ability to experiment and be creative in music today. The group Beck claims that Spotify is not working because musicians are still poorly paid and that the streaming has reduced sound quality.
Spotify clarifies that even though artists are getting little money per stream compared to per album profits, there is still value. According to The Independent, Spotify believes that by having music fans have an unlimited amount of music to listen to for free, artists will be more recognized and build up long term revenue.
Foo Fighters front man, Dave Grohl, encourages artists to focus more on their live shows instead of worrying about the delivery and technology of music. He puts his music on Spotify because he cares more about his fans listening to it rather than how much they are paying for it.
For music lovers, Spotify is a different delivery mechanism – not good or bad, simply different. As much as some people disagree with Spotify over their rates, they recognize that Spotify is legal, licensed and pays royalties to artists.