Swift vs. Spotify – An insight into the Future of the Music Industry
7th November, 2014
With Taylor Swift’s recent decision to remove all of her music from Spotify, opinions have been forming as to whether this is a taster of things to come for the music industry.
In line with the release of her new album, 1989, Taylor Swift decided she no longer wanted any presence on the music streaming platform – Spotify. For years, Swift has been open in her opinions about music piracy and streaming stating ‘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.’
In response to Swift’s decision, Spotify released the following statement: ‘We believe that fans should be able to listen to music wherever and whenever they want and that artists have an absolute right to be paid for their work and protected from piracy. That’s why we pay nearly 70% of our revenue back to the music community.’
Despite Spotify’s insistence that nearly 70% of their revenue goes back to the ‘music community’ – it is estimated that artists only receive $0.006 and $0.0084 per stream in royalties.
Most significantly, however, Swift’s newly released album ‘1989’ debuted at No.1 in the US and claimed the largest sales week for an album since 2002.
Impact on the Sponsorship Industry
It is worth noting, that Swift is one of the highest earning artists globally and has the ability to sidestep platforms such as Spotify, which is not an option for many artists.
This case however highlights two key things:
- The music industry is finally seeking alternative methods to overcome the issues faced through piracy and streaming
- Fans are still willing to purchase music and spend money on artists they admire – indicating that with the right model, the industry can be profitable
The state of the current music industry poses an interesting model for the sponsorship industry. In the past ten years, the commercial departments in record labels have increased two-fold. Gone are the days where a Number 1. slot goes to the individual selling 100,000 records, now, it’s more like 10,000 (see Rhianna in 2012). Sponsorship, it seems, has become a revenue stream to fill the gaping hole that has appeared through the decline in record sales.
Not only do brand partnerships generate additional revenue, but they offer artists a unique way to engage with their audience. Alongside brands, opportunities arise for artists to challenge their creativity and create products, design fashion lines and direct music videos (see the video FKA Twigs recently directed for Google Glass or one of the Slingshot team’s favourites Nas, Rakim, Kanye West and KRS One’s partnership with Nike’s Air Force One).
As an industry, there’s a huge amount of potential for artists and brands to collaborate across a plethora of mediums. In time, this will ensure that the music industry remains profitable for all parties involved and ultimately creates something truly unique for fans to enjoy.