Why Taylor Swift Is Wrong About Spotify




Taylor Swift is doing the music business wrong.


In an interview published this week, Time asked her why she left Spotify. This is what she had to say (emphasis ours):

Well, they 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.

With Beats Music and Rhapsody you have to pay for a premium package in order to access my albums. And that places a perception of value on what I've created. On Spotify, they don't have any settings, or any kind of qualifications for who gets what music. I think that people should feel that there is a value to what musicians have created, and that's that. I wrote about this in July, I wrote an op-ed piece in the Wall Street Journal. This shouldn't be news right now. It should have been news in July when I went out and stood up and said I'm against it. And so this is really kind of an old story.

This is just wrong (and I say that as a HUGE Taylor fan!). What she seems to be saying is that it doesn't matter who pays what. It matters that every consumer feels like they are paying for her music every time they play it. This seems to be what her defenders are saying, as well.


It seems weird to make a business decision based on a feeling. Particularly since Spotify pays the artist for plays, even on the free version of its service (it's a very small fee per stream, but it exists and it is paid for by free service users having to listen to ads). This is basically exactly like radio, albeit with smaller licensing fees. There are a couple of things here:

First, the artist does get paid per listen, so why does it matter if the consumer "feels" like they are paying for the music? (When I pay for Spotify premium, I "feel" like I'm paying for the ads to go away, not for the songs.)

Second, when you buy an album, you're basically paying $10 for that first listen. Past that, it's free. The artist doesn't get extra money from the person who listens to the song 1 million times versus the person who only listens to it 10 times. When I go home to my parents' house and pick up my old Britney Spears CD and play it for nostalgic reasons, I definitely don't "feel" like I'm paying for that experience. I (okay, my mom) paid for that CD over a decade ago. That $10 is long gone.

Taylor Swift


Taylor Swift performs during her "Red" tour in May 2014.

Regardless of what silly things Taylor Swift says publicly, though, there's a real question about the viability of streaming as a music revenue stream. Can an artist make more selling albums than on streaming? The quick answer, right now and in the past, is probably yes - particularly for huge stars like Taylor Swift.

But streaming is here to stay whether some major artists decide to pull their albums or not. In the current digital climate, it has replaced illegal downloads, not paid album sales.


Switching gears a little bit here, I really wonder why we as consumers care about how much Taylor makes on album sales. She's making money either way. Streaming is unambiguously better for the consumer. I listen to 10x more music now that I have Spotify, because I can afford to. As a result, I probably also pay for more live show tickets. Roughly as much of my money is going to artists as it was when CDs reigned. But I get a better experience.

The best thing I've seen on this is the interview Marc Andreessen did with Kevin Roose a few weeks ago:

With Spotify, too, we as consumers have more choice than we've ever had, but the producers are feeling a squeeze. Part of what worries me about your vision of the future is that it's treating people as if they're only consumers and not producers.

No, no, no, no, no. It's treating people as consumers and producers. The same technology makes people better producers. Are you a better producer today than you would have been without all these new technologies?

Yes, but am I compensated properly if I'm a musician whose song gets a million hits and he gets a check for $6?


That's when we get down into the sticky situation, which is, is our work actually worth what we think it is?

And what's the answer?

The answer is, it depends. You look at most of the successful authors now, and they're doing paid speaking. For musicians, the live-touring business grew four times in the last 15 years. So as digital music has taken reproduction down, as the reproduced version has become abundant, the live experience has become scarce. So touring revenues are way up.

The music industry is changing. But in a way that's really great for consumers, and not clearly all that bad for artists like Taylor Swift.