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CMU Beef Of The Week #231: Taylor Swift v Spotify

By | Published on Friday 7 November 2014

Taylor Swift

Was there anything else that could be considered a ‘beef of the week’ this week? If there was, I didn’t notice it. In fact, I noticed very little besides this one because it was bloody everywhere.

In the unlikely event that you’ve missed this whole thing, here’s a quick recap. Having already ‘windowed’ her new album ‘1989’ (ie held it back from streaming services in order to maximise CD and download sales in the first weeks, or months, or maybe years of release), earlier this week Swift removed her entire catalogue from Spotify. Deezer-removal also followed, but it was Spotify that everyone focused on, partly because the Swedish company made a big song and dance of it.

There’s still some debate over what the exact focus of Swift’s beef with Spotify (etc) is. In the past, her label boss Scott Borchetta has been very vocal about his distaste for, or at least hesitance about, streaming services, but on this incident both he and she have so far remained tight lipped (an interview with Swift published by Yahoo yesterday only really addressed the windowing of the new album, rather than the later full catalogue takedown).

However, it seems likely that the problem is the refusal of Spotify (and Deezer) to allow artists to make their music available only to paying subscribers. Label/artist royalties from premium are better than from freemium, which is really a loss-leader-style level designed to hook consumers in and then beat them into parting with £120 a year by throwing terrible adverts in their general direction.

Which sort of makes this beef a bit like when the labels moaned on about iTunes not initially offering variable pricing, or when the Apple service insisted on everything being available as single track purchases to the annoyance of “but we’re an album artist” artists, ie the label and artist aren’t against the service per se, just a specific element of its business model.

Spotify is presumably not keen on the idea of big name artists pulling out of freemium, because, as I say, it’s an important sales tool for the streaming service. And if all of the decent/well-known music disappears from freemium, people won’t sign up to it (especially while said music is all there on YouTube), and then there won’t be anyone to sell premium accounts to.

There was a hint of all this brewing earlier this year when Swift wrote an article for the Wall Street Journal (which she referenced and basically repeated in the aforementioned Yahoo Q&A yesterday), in which she said: “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, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art”.

So, while I think it might be a bit of a stretch to call Taylor Swift’s music “rare art”, you suspect that she (like Thom Yorke and Nigel Godrich before her, who also removed music from Spotify this year) sees the catalogue pull as taking a stand for all artists – all of them – and their future potential to make money.

After all, it’s not like she isn’t making money herself. She just sold 1.3 million copies of ‘1989’ in the US in the space of a week, and, according to Music Ally, the first single from that album, ‘Shake It Off’, was likely generating in the region of $84,000 a week from Spotify plays globally at the point it was removed.

And, to be fair to Swift and her label Big Machine, while the catalogue pull might have been an overly grand gesture, they are not alone in having concerns that Spotify freemium might be ultimately hindering the development of the streaming sector. Indeed, you suspect that once the majors have had their big pay day when Spotify floats (until which they have no reason to rock the boat), they too might push for a rethink on the free option offered by Spotify et al.

The matured streaming market almost certainly consists of a spectrum of services from free to as much as £20 a month, at one end personalised radio services of one kind or another, with more functionality for a few pounds, more catalogue for a few pounds more, and then super high quality audio at the top end. But Spotify Freemium (and YouTube, of course, which is possibly the bigger elephant in the room), sort of fucks that streaming music spectrum up by giving away far too much for nothing.

But look at me, putting words in Taylor Swift’s mouth. Maybe this isn’t a big artist taking a stand for the little guy. It could be an artist who is good at making money trying to ensure that she makes more. Did I mention that she sold a shed load of albums? Sure, while there’s no conclusive evidence that windowing ‘1989’ increased its sales, doing so certainly didn’t hurt them. And, hey, while you’re at it, how about a replica of the t-shirt she’s wearing on the cover for 30 quid? Or some concert tickets for anywhere between £55 and £200?

Either way, while you might think pulling from Spotify was a bad move, or will ultimately back fire on Swift Inc, this singer is doing very well with her rare art at the moment, thank you very much. That t-shirt I mentioned? Sold out. And the two UK live dates that went on sale this morning? Sold out too. So, I doubt she’s losing much sleep over the backlash (mainly amongst pundits) over her decision regarding streaming services. Though, as I say, we don’t really know anything for certain because she’s not publicly expressed a specific opinion on much of this.

Which makes her pretty much the only person in music not to have done so. The fact she chose to pull out of Spotify just as the Web Summit conference in Dublin was kicking off, an event that brings together plenty of music business types with all those sinister tech folk and web entrepreneurs, ensured that the debate over Swift’s streaming strategy was even louder.

One of the more interesting viewpoints shared at said event came from Adele’s manager Jonathan Dickens, who not only manages one of the planet’s now rare multi-million album-selling artists but also has experience of windowing her music. According to The Guardian, he said: “Spotify have always been pictured as the bad guys in this, but the biggest music streamer out there is YouTube, without a doubt”.

Echoing analyst Mark Mulligan’s blog post on the debate from earlier in the week, he continued: “On the one hand, labels are trumpeting YouTube as a marketing tool: ten million views on YouTube and it’s a marketing stroke of genius. But on the other hand they’re looking at ten million streams on Spotify and saying that’s x amount of lost sales”.

On how Spotify could rectify this week’s debacle, he added: “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”.

And thus Dickens formally put on the agenda an issue that has been rumbling around for a while now, but which has come to ahead this week, “we need windowing, Mr Spotify!” Which made a nice change from the more common conclusion to streaming debates that have taken place this year, “we need more transparency on streaming, Mr Label!”

Though Bono, also along for the Web Summit ride, because by law you have to invite Bono to speak at your conference if you hold it in Dublin, made sure that line got an airing. “The real enemy is not between digital downloads or streaming”, he said. “The real enemy, the real fight is between opacity and transparency. The music business has historically involved itself in quite considerable deceit … For this new model to be successful and to take root, there has to be some kind of fairness… fair models of distribution. And I think when that happens, the music business will be a rising tide that lifts all boats”.

All of which is perfectly valid, but unfortunately has to be discounted because Bono said it. That’s also the law. Plus, he used the phrase “digital downloads”. The sooner the download market dies and I stop having to seethe every time someone says “digital downloads” (as if anyone in the room thought you might mean “analogue downloads”) the better. I can’t wait until we’re only listening to “digital streams” for that sole reason.

Anyway, sorry, I strayed off the point a bit there. But if we have to discard Bono’s input on account of him being Bono, that’s fine, there are plenty of other artists with opinions out there. Aloe Blacc was one. Though his article for Wired was really about something else entirely, and had presumably been written before all this kicked off, with the sentences about Swift and Spotify being crowbarred in at the last minute.

His article on the review of collective licensing rules going on in the States, and the royalties Pandora pays out, focussed entirely on songwriters and their ability to make money in the streaming age. That may also be a concern of Swift’s – again, she’s not said – but, though a songwriter too, this beef does seem to be coming from Swift the performing artist, rather than being about the people who stay behind the scenes crafting music for others.

But if she is worried about songwriters, she might be interested in the news from Kobalt, also announced at the Web Summit, that its writers (which include ‘Shake It Off’ co-writer Max Martin) made more from Spotify royalties than iTunes revenue in Europe in the first quarter of the year. Though she might wonder why the stats presented came from quarter one this year, rather than the subsequent two quarters that have since been completed.

If Swift wants some more timely data, what about the news that SoundExchange – which licenses the interactive radio services like Pandora that she is obliged to work with under law (in the US, anyway) – has just announced record payouts for the third quarter of this year. And to think, they say streaming services don’t pay artists. I’m not sure who ‘they’ are. Probably an artist who didn’t get paid. But, as Bono said, perhaps that’s the fault of their label. Argh, I just quoted Bono again.

What the Kobalt and SoundExchange and a whole load more stats prove without doubt is that streaming is growing rapidly, and the music rights industry at large is reaping rewards from it. And while those rewards may not be entirely filling the gap left by the continued slide in CD sales and the looming death of downloads (digital ones, just to be clear), there is still huge potential in this domain for everyone, even if there remains some disagreement as to how the whole thing should be structured.

Those disagreements are fine providing the debate isn’t “to stream or not to stream”, but “how to stream”. Taylor Swift removing her music from Spotify (and Deezer) feels like a milestone in the history of digital music – a point of no return – in repositioning the debate in that way. It will be fascinating to see where everyone stands the next time Taylor Swift releases an album.