Taylor Swift is wrong about Spotify
The truth is, Swift's decision to pull her albums from Spotify doesn't affect Spotify. It only affects music fans.
Swift says this is "old news." Months before she pulled her songs from the streaming service last November, she wrote an op-ed in The Wall Street Journal in July explaining why she thinks streaming services like Spotify don't properly value musicians' creations.
Spotify, for the record, pays 70% of its revenue to labels, which amounted to roughly $1 billion in payouts last year. But that's not how artists like Swift see it: When you break it down, labels actually get less than a penny per play, and that's money going to the labels, not to the artists. So a label would still make less than $1 million off a single song, even if it's played 100 million times, and the artist would see even less of that money.
It's unclear how much money Swift actually made from Spotify, but as Buzzfeed pointed out last year, Swift never needed Spotify for the money. She makes most of her money from tours - her most recent one grossed a record $150 million at the box office, and Swift reportedly made $30 million in the first six months.
Justin Sullivan/Getty ImagesSpotify CEO Daniel Ek.
Of course, people have plenty of other options to listen to Swift's music: They could buy the physical albums, which is profitable for the artist but not efficient for customers - nobody really listens to CDs anymore, they just import them to computers for later listening. They could also pursue other online outlets like iTunes, Beats Music, Rhapsody, and Pandora.
But Spotify isn't going away anytime soon.
Even though iTunes has more credit cards on file, Spotify is widely recognized as the most important player in the space right now. Even Apple is jealous: the iPhone maker has reportedly attempted to persuade music labels from breaking ties with Spotify as it preps its own music streaming service.
Spotify gets music: It allows paid subscribers to endlessly binge on music at a reasonable price, similar to Netflix, but it also offers curated content and countless customization options, even for new albums. That's great for customers who love music, and artists who want their work to be heard.
And so, this is Taylor Swift's argument for leaving Spotify: "Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free."
She's entitled to her point-of-view, but that opinion, particularly the way she's framed it, is greedy and short-sighted. She didn't say Spotify devalues all music; she's complaining that her cut from Spotify isn't big enough. It's reminiscent of the recent introduction of Tidal, Jay-Z's streaming music service, which many people criticized as a poorly-veiled attempt to help rich musicians get even richer. Clearly, money was the biggest factor in Swift's decision to pull away from Spotify.
Swift is right about one thing: Valuable things should be paid for. Except on Spotify, you never "own" anything, even if you pay for the Premium service - you're just playing it, enjoying it, but not "owning" it. And if someone discovers Taylor Swift and likes her work, there's a good chance they could attend one of her concerts or buy some of her merchandise - that's much more "valuable" than counting pennies from song plays.
Spotify isn't lucrative for artists, or even itself - it exists simply because people love music, and it's better and safer than piracy.
Of course, Swift is allowed sell her music wherever she wants. But her decision affected millions of her own fans, and millions of other people who use Spotify to expose themselves to new music (Spotify has over 60 million active users, and more than 15 million paid subscribers).
The world is changing quickly, and the future of the music industry is hazy. But if Swift is really concerned about the money she makes, she shouldn't take it out on Spotify; she could just crowdfund her next album. It'd meet its goal in less than an hour.