Taylor Swift recently pulled her entire catalog of songs off Spotify, arguing that there “should be an inherent value placed on art.” It appears that Taylor made about $500,000 last year in domestic streaming through Spotify. Before her departure, she had millions of people playing her songs every day. Spotify argues that artists will reap the benefits of allowing their work to be streamed when a critical mass signs up for the service. For people like Taylor Swift who already have a huge following, this potentially works out well. For most musicians, Spotify is hardly an option. This article in the Atlantic is a dose of reality, stating that it takes over 4 million plays per month on Spotify for an artist to make a paltry $1,160.
Historically, record label agents were the gate keepers who “picked” the artists they would represent. Due to time and staff size, only a few artists were chosen to fill out a roster each year, leaving most artists behind. Then, ten to fifteen years ago, many believed that the internet would flatten the music industry. Instead of a top down approach, led by record executives who picked the winners, the internet would allow the artists themselves to promote their work and get noticed.
Though Spotify claims that the “picks” now come from the consumers themselves, the results are basically the same. A few chosen artists reap the benefits of services like Spotify, while most struggle to survive. The model that has evolved, heavily favors consumers who love to listen to great music but don’t want to pay for it. Companies like Spotify claim to be thinking about the artists but really haven’t considered how most will carve out a sustainable career.
One prevalent argument is that lesser known artists can leverage services like Spotify to get noticed, create a following via streaming, and make their money through live performances. This is a harder proposition than you might think. Consider Pomplamoose, a successful band with a huge following that recently embarked upon a multi-city tour. By all accounts, the tour was a huge success. Yet, they lost money. Here’s a band that’s “made it” and they have to hustle as much as anyone just to make ends meet.
At this moment in time, artists are not benefiting from online streaming. However, there is great potential to consider your role as an end user, defined an individual who uses a product—like youtube or wix—after it has been fully developed and marketed. Here are two areas to think about:
- Consider using sites like Paetreon and Kickstarter to help sustain your career: Patreon, in particular, is a great way to directly access your fans to support your artistic output. Imagine your super fan. Is your music worth $9.99 or is it worth much more to them? Chances are your super fans will pay a premium when they are free to pay what they think you’re actually worth.
- Understand the meaning of the Long Tail: Think of a long tail on a dog. The thicker part of the tail, closer to the body, represents the select few artists that, historically, record labels had to focus on. Now consider the long, thin part of the tail. With the advent of the internet, this part of the tail represents every other artist. The argument here is that now all artists have a place in the market because they can compete with the select few artists like Taylor Swift on the thicker end of the tail.
Taylor Swift made the right decision to pull out of Spotify. Like most businesses that primarily think about their bottom line, companies like Spotify are too focused on creating value for the consumer and ultimately, themselves. Artists need an equitable model that places the same value on great art as it does to the customers who consume their music. The company that creates a double bottom line that provides a platform for consumers as well as a way for artists to have a sustainable career in the arts will become the industry standard.
Do you currently use Spotify as a consumer? As an artist? I’d love to hear your story in the comment section below.