Streaming out


Photo by MCT

On Nov. 3, just days after she dropped her fifth studio album and faced criticism from Spotify for not making it immediately available for streaming, Taylor Swift dealt a sound blow to the streaming service by removing all but one of her songs from their repertoire. While some may perceive the move as drastic, the reality is that Swift has long expressed dissatisfaction with the nature of low-royalty streaming services such as Spotify and Pandora. In June, she even wrote an op-ed for the Wall Street Journal on the subject. She’s not alone in her views. Artists such as The Black Keys have also come out against these services, and many others have delayed making their albums available to stream until after consumers have had some time to buy their music. So is this the beginning of the end of free streaming? And why is Swift’s move so important?

First, it’s important to note that Swift doesn’t speak for everyone. Last July, when a fan tweeted at Brendon Urie of Panic! At the Disco complaining that he was just a few cents short of purchasing Urie’s song, Urie tweeted back encouraging him to “rip it from YouTube.” Many smaller artists are also willing to accept lower royalties in exchange for the exposure that streaming services provide them, with their thought process being that some of their new fans will become paying customers. Having said that, the system does have some key flaws that may affect the music industry’s willingness to work with services such as these.

According to Spotify’s website for artists, the site pays rights holders an average of between $0.006 and $0.0084 per stream. At this rate, it would take between 152 and 215 plays to equate to one iTunes purchase. This would be less of a problem if users of the free services eventually started purchasing music, but statistics indicate this isn’t happening. A New York Times article states that for the first time this year, digital record sales declined along with physical album sales as use of streaming services soared. Thus, there is some logic to Swift’s decision: by limiting the availability of her music on free online services (many YouTube videos featuring songs from “1989” have also had their audio removed or been taken down altogether) people are more likely to pay for the album. As consumers become less willing to pay for music in general, actions like this may become a powerful tool artists can use to boost album sales when nothing else will.

Though she’s not alone in her distaste for low-royalty streaming, Swift is the first major artist to completely abandon one of these platforms. How Spotify responds– whether they stand their ground or cave and begin offering artists higher royalties – will likely shape the digital music landscape for future years.