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THE SPOTIFY DEBATE RAMPS UP
Everyone With a Stake in the Game Has a Take, It Appears


Taylor Swift’s decision to pull all her music from Spotify inspired heated dialogue last week from Nashville to Dublin. What follows is a range of opinions from people who know what they’re talking about. We’ve pulled the gist of each commentary with a link to the whole thing.

During an on-air interview Friday night on iHeartRadio’s Sixx Sense With Nicki Sixx, Big Machine’s Scott Borchetta was asked by co-host Jenn Marino, "Do you think other artists are going to follow suit? Is that kind of what we’re hoping for in this whole thing?" He answered, "Yeah. It’s already happening. I’ve had calls from so many other managers and artists. There’s a big fist in the air about this. Spotify is a really good service, they just need to be a better partner and there is a lot of support for this."

Taylor publicly commented on the situation for the first time during a wide-ranging interview with Chris Willman posted on Yahoo.com. "If I had streamed the new album, it's impossible to try to speculate what would have happened," she began. "But all I can say is that music is changing so quickly, and the landscape of the music industry itself is changing so quickly, that everything new, like Spotify, all feels to me a bit like a grand experiment. And I'm not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists and creators of this music. And I just don't agree with perpetuating the perception that music has no value and should be free."

At the ICYMI 14 Web Summit in Dublin, Adele manager Jonathan Dickins argued that Spotify needs to change its policy of treating all albums equally. "The premium tier to me are real active record buyers, paying their $9.99 or €9.99 or £9.99 a month," Dickins opined. "My feeling would be to get around the situation with someone like Taylor Swift—but Spotify won’t do it—is a window between making something available on the premium service earlier than it’s made available on the free service." Interestingly, Team Taylor asked Spotify for just that exception, and decided to hold back 1989 when the service turned down the request, according to insiders, although the media never got wind of this negotiation.



Sharing the stage with Dickins, L.A.-based manager Jeff Jampol put things in perspective: "Here’s the way an income pie should look for a successful or current artist: 60-65% of their income is going to come from tickets, 15-25% from tour merch, 10-15% from publishing, 2-4% from ancillary and 2-4% from record sales." Presumably, then, streaming revenue falls under "ancillary" at this point.

Bono
also offered an opinion, as he is wont to do, putting the issue in a broader context. "The real fight, he said, "is between opacity and transparency. The music business has historically involved itself in quite considerable deceit."

In a commentary on The Daily Beast, Dale Eisinger theorized about Swift’s motives in this faceoff: "Taylor knows not only the value of her commodity, but also how to control it. This gives her again the upper hand, as she is seeking to fix a market price across all digital servicing for her work. Allowing her music to continue streaming on Spotify for less revenue would be akin to HBO charging Comcast less than Dish for their content. She knows the ethics behind this, and she wants those ethics to be visible on a broad scale."

Digital music expert and DigSin Records head Jay Frank made a point that few in the business are aware of in a blog post headlined "Understanding Spotify": "Spotify’s growth in 2014, like nearly every other digital company, has mostly been in the mobile space. What makes that interesting is that you can’t listen to a particular song on demand on Spotify’s free mobile service. You are forced to listen to music on a random shuffle instead. Most of that listening, by app design and consumer choice, goes to playlists. By extension, this means the majority of free plays on Spotify are just a different iteration of internet radio. When you understand that, limiting music to the paid-only version of Spotify becomes an obvious mistake. Spotify should be embraced as this tier pays a higher royalty rate than Pandora does."

Industry pundit Jack Ponti made a provocative claim about the motives of Spotify’s owners in a Facebook post: "This entire push on Spotify is not to save the music business, or give you a platform to be discovered, or give you hope. It is 100% an IPO play, nothing more."

Some additional thoughts. An exec from a major European company tells us that Spotify now represents 25% of his outfit’s digital revenue. With Spotify’s relatively greater penetration on the Continent, it’s understandable that the service appears to be far less polarizing over there than in the States. But why is all the focus on Spotify when YouTube has virtually everything one could imagine—including every track from 1989—on demand, as Dickins pointed out? These are fascinating times indeed. This narrative is just getting started.
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