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Marketplace

Why Taylor Swift broke up with Spotify

Nova Safo Nov 3, 2014
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Music superstar Taylor Swift and her label Big Machine Music have pulled her catalog of songs from the music streaming service Spotify.

Swift’s single “Shake It Off” is currently the most played song on the radio, according to Billboard. And Spotify says Swift’s music was being streamed by 16 million of its users in the past month. The service has 10 million subscribers and and 40 million active users globally, according to Spotify.

Spotify made the announcement on its blog, in a cheeky note that asked Swift to come back

Earlier this year, Swift wrote an op-ed in the Wall Street Journal, saying in part that artists should have more control over the price value of their albums. Rolling Stone reported Monday that the label and the artist did not negotiate with Spotify prior to pulling the songs off the service, and that the move may be tied to the label trying to increase its value ahead of a possible sale. 

The clout that Taylor Swift and her label have over Spotify is a sign of an ever-shifting music industry landscape. Downloads have flatlined, album sales are down and streaming is up. But streaming services are dependent on big-name acts, says Karen Allen, a digital music consultant. 

“The problem is that if you don’t have popular music on a streaming service that you’re asking people to pay for, then they don’t want to use it,” Allen says. “Because the promise of a streaming service is… it’s unlimited access to everything. When you don’t have a huge artist, it’s less attractive.” 

On mobile phones, streaming audio is the second most popular thing to do, after streaming videos, says Roger Entner, a telecom analyst and founder of Recon Analytics. But streaming services, such as Spotify and Pandora, face a paradoxical problem. 

“Consumers aren’t willing to pay that much for songs any more,” says Entner. “They’re not willing to pay say more than $10 a month, if even that.”

There’s an expectation for online songs to be free, says Allen. “That has been a challenge for all streaming services, to find that magic offering for users, where it’s worth paying for and they’re also getting value.”

Spotify charges $5 or $10 a month. Or, it’s free if you don’t mind ads. But the company pays artists, on average, just $.007 per stream. That’s despite the fact that the music industry has huge leverage over Spotify.

“There’s only three major labels left on the planet. They have tremendous leverage,” says Casey Rae, vice president of policy and education at the Future of Music Coalition, which represents the interests of musical artists. 

“So, I think that in some instances you’ll see these superstars using their clout as leverage, and sometimes that might mean taking your toys and going home,” says Rae. But smaller artists don’t have that luxury and have to go where the fans are, Rae says, which increasingly is on online streaming music services. 

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