Swift “Shakes Off” Spotify

Spotify may have over 20 million songs to offer, but Taylor Swift’s won’t be among them. The pop star made a bold move and pulled her music from Spotify’s streaming music service in opposition to the compensation model.

Just what does Swift’s boycott of Spotify represent in the music world? Given her enormous popular appeal, including the success of her recent release “1989” with sales of 1.287 million albums, Swift has substantial bargaining power and is becoming a formidable voice among artists.  Standing in company with other names like Beyonce, Cold Play and Jimmy Buffet, Swift takes objection to the fractions of pennies paid to the artists and their labels for the use of their art.

Like Spotify did in its reaction to Cold Play’s refusal to publish music to the streaming service with its March release of “Ghost Stories,” it publically offered a gracious appeal to the artists and kept their user base informed as to why the music was not available. Spotify released the following statement:

"We love Taylor Swift, and our more than 40 million users love her even more — nearly 16 million of them have played her songs in the last 30 days, and she's on over 19 million playlists. We hope she'll change her mind and join us in building a new music economy that works for everyone."

While many artists support Spotify’s goal of better monetizing music after more than a decade of rampant piracy, Taylor Swift isn’t buying it. She staunchly defends her craft as a rare art form, saying “Important, rare things are valuable. Valuable things should be paid for.”

For its part, Spotify maintains that it’s actually trying to increase the royalties to artists and combat music sharing, stealing and piracy that has become the norm among music fans rather than the exception. Contrary to popular belief, Spotify does not pay on a per stream basis, but rather a formula that takes into account its revenue, number of streams, amounts its obligated to pay owners, labels, publishers, and, of course, the artists themselves. Spotify reports that it keeps roughly 30% of its revenue and the majority actually goes to the multi-layered music industry machine. One could argue that Spotify is paying enough – but the bloated music industry is leaving too little of the payouts to the artists themselves.

So who is right in this standoff? Artists like Swift feel they are being undervalued and underpaid, yet the streaming services assures musicians that they have good intentions to return music to a paid art form. It’s also possible that Swift and her independent label, Big Machine, are playing hardball behind the commercial success of “1989” to negotiate better overall compensation for Swift’s and other Big Machine artists’ music on Spotify.

Spotify is too big for most artists to ignore with 50 million users and 12.5 million paid subscribers.  While Swift has enough popular appeal to pick and choose where to make her music available, most artists succumb to the demands of services like Spotify, Pandora, iHeartRadio and iTunes because they want their music heard and purchased and are willing to pay the price.

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