14 DAY TRIAL // Taylor Swift may have been the first to take a swing at Spotify when she pulled her entire discography from the service, but Spotify won’t just sit there and keep quiet.
In fact, Spotify’s CEO Daniel Ek said that his company did plenty of things for musicians, including when it came to payments. In fact, he states that they’ve paid more than $2 billion (€1.6 billion) to labels, publishers and collecting societies for distribution to songwriters and recording artists.
“Quincy Jones posted on Facebook that ‘Spotify is not the enemy; piracy is the enemy’. You know why? Two numbers: Zero and Two Billion. Piracy doesn’t pay artists a penny – nothing, zilch, zero,” Ek points out.
The two billion dollars Spotify has handed out to artists have split into two sections. The first was handed over since Spotify’s launch in 2008 until last year, and another was given since then. Ek says that through piracy or practically equivalent services, all this cash wouldn’t have landed in the pockets of the music industry.
The music industry is changing
The Spotify CEO explained that when he hears stories about artists and songwriters who say they’ve seen little or no money from streaming, and who are angry and frustrated, he’s frustrated too. The music industry is changing, he says, but the problems started well before Spotify and the like showed up.
Ek explains that they’re trying to build a new music economy that works for artists in a manner that the music industry has never seen before. Spotify has become one of the biggest drivers of growth in this area, the biggest source of overall music revenue in many places.
However, there are plenty of misconceptions plaguing the situation. The first one is that free music for fans means artists don’t get paid, which isn’t true since there are plenty of ads to compensate. The second is that what Spotify pays is too little for people to earn a living. He compares the situation with the fact that a song is streamed 500,000 times on Spotify and that translates into little money. However, that’s about the reach a song has when it’s played once on a radio station.
The last myth is that Spotify hurts sales, both download and physical. “The whole correlation falls apart when you realize a simple fact: downloads are dropping just as quickly in markets where Spotify doesn’t exist. Canada is a great example, because it has a mature music market very similar to the US. Spotify launched in Canada a few weeks ago. In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else. If Spotify is cannibalising downloads, who’s cannibalising Canada?” he writes.
