When Taylor Swift released her long-awaited album – 1989 – a couple weeks ago, it perked everyone’s interests. It was an album that took her more than two years to create, she said in multiple interviews. To hype the album’s release, her record label released the album on iTunes, CD and Spotify simultaneously.
Days later, without any explanation, the album was pulled from Spotify.
Gone. Like it never existed on the service before.
People were confused. Spotify really wanted her back on the service, up to the point where they essentially begged her to return. Some insiders thought the President and CEO of Taylor Swift’s record label, Big Machine Label Group – wanted to beef up their album sales in light of a sale, and so they pulled the album from Spotify – which would force customers to go out and buy the actual, hard CD album.
The exchange of fire happened days later, when Taylor Swift finally commented on the issue in an interview with TIME magazine, saying:
“[People can still listen to my music if they get it on iTunes. I’m always up for trying something. And I tried it and I didn’t like the way it felt. 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.”
In short, Swift no longer saw the value of Spotify to her brand, and therefore she pulled the album. And while that behavior might strike many as anti-customer, it was a huge win for Swift.
When Spotify heard that Swift was worried about not getting paid enough, they argued that Spotify has paid Swift $2 million over the last 12 months they’ve been streaming her music.
Contradicting that claim, Swift’s label group said that she’s only paid less than $500,000 – the equivalent of less than 50,000 album sales (which, for an artist of Swift’s caliber, is nothing).
Either way, people went out and actually bought the physical copy of her album. It sold more than 1.3 million copies in the first week of its release, crushing analysts expectations of ~700,000 solidly. It also became the first album to earn RIAA Platinum award in 2014. It did all of these, despite not having the help of Spotify.
So what does that say about Spotify?
Artists who are already popular need not bow down to Spotify any longer.
They don’t need to agree to Spotify’s 30% cut in streaming revenues. They can strike out on their own, and still win big.
But that makes me question… what’s the point of Spotify then, beyond just accessible music streaming?
My theory is that Spotify is built not as a revenue generator for artists, but as a discovery tool. It’s a place where users can discover new, indie artists previously unknown (this may tie in directly with the fact that Spotify explicitly doesn’t allow users to skip songs on their phone apps if they refuse to upgrade to the paid tier). If you’re a new artist, it’s great to have your songs on Spotify to build brand recognition. But what about if you’re already as established as Swift – who don’t need any help with social given that she’s got 46.7 million followers on Twitter?
You leave it. Because you can’t benefit from it.
Don’t believe that Spotify is built more for social discovery than music streaming?
Here’s another evidence: payout to artists on Spotify is terrible. Unless you’re as well-known as Swift, there’s no way you’d be able to make a substantial amount of money by putting your music on Spotify (and in relative context, that “substantial amount of money” for you and me probably means nothing at all to Swift). Spotify pays you $0.0084 each time someone streams your song. And if 1,000,000 people stream your song (which is unlikely if you’re still a new and budding talent), you’d still be earning less than $10,000. The economics of the music streaming industry is downright miserable.
And that’s why Swift is right to leave Spotify… for the sake of her own career.
BONUS: Here’s an interesting idea…