Is Spotify Ruining the Music Industry?

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With the recent emergence of music streaming services like Spotify and Pandora, many people are blaming it for the new (financial) demise of the music industry. It isn’t like we haven’t heard of this happening before (Napster, anyone?). But it isn’t just music execs complaining, it’s the artists themselves. Taylor Swift was one of the few artists who pulled all of her music off of Spotify, which led to others following suit. The problem? They aren’t getting paid enough.

The way Spotify works is that they provide two different listening services for users. The premium service is ad-free with an unlimited amount of skips and allows you to play songs when you aren’t connected to wifi/data, which is $9.99 a month. The free service caps the number of times you can skip songs, doesn’t allow you to play songs offline, and has ads that mostly push you towards their premium service. Spotify claims that since 2009, they’ve paid out $2 billion in royalties to the industry. But what about the artists themselves?

Spotify-Royalty-Formula
Spotifys payout formula

An artists payout works out to an average of less than one cent per play, between $0.006 and $0.0084.

But back to Taylor Swift. Her most recent album, 1989 was the years top seller, with first week sales being about 1.3 million which isn’t too far off from the all time high of ‘N Syncs 2.4 million. Interestingly enough, her album was also #1 on Pirate Bay. Whether or not an artist chooses to have their music available on streaming platforms, people are going to flock to torrents or Youtube to listen to the music for free. In this age of digitization and lack of tangible albums, Spotify is the least of the music industries problem seeing that the revenue in the industry has been cut in half since 2000.

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It seems that even though the payout doesn’t seem like a lot, record labels are the ones holding onto all of the money.

What do you think? Is Spotify (and other services) good for the music industry, or is it a detriment?

Bri , Photographer, and Staff Writer for #Underground

 

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