One of the big breakups of 2014–from a news coverage standpoint, anyway–was Taylor Swift’s announcement that she was pulling all her music from Spotify and that they were never, ever getting back together. This unleashed an avalanche of coverage and opinion critical of Spotify and streaming music services in general. But most people just heard the phrases “Taylor Swift hates Spotify” and “streaming rips off artists” and didn’t bother going any deeper into the story. Let me break it down for you.
Taylor and her management company/record label Big Machine were happy to work with Spotify IF her music was only available on the paid tier of Spotify’s service. Spotify’s licensing deals calls for lower payouts to rights holders for their free ad-supported streams because the amount of money they collect for that tier is lower than the paid one. Taylor/Big Machine didn’t want any part of that because they placed value on the art of her music. It should not be available to consumers for free.
Gotcha. Totally with you so far. So when Spotify refused, Big Machine yanked Taylor’s music. Besides, her 1989 album was selling by the hundreds of thousands, yielding some nice fat margins. Why cannibalize those sales for streams?
It took about three tenths of a second for people to poke holes in that argument. To listen to Taylor’s music for free, all one had to do is flip over to YouTube or Vevo and there it was. All of it. Why would she oppose one free service and tacitly support another?
Smart financial planning, that’s what. YouTube views are littered with ads and under the way payouts are structured (total views and subscriptions), the payouts by YouTube and substantially higher than what Spotify and others pay. Her “Blank Spaces” video has been seen over a quarter of a billion times. Add in all the other views of her stuff and you’ll see that Swift has one of the ten most profitable channels on YouTube. And based on 341,711,430 views on YouTube/Vevo, Big Machine should have received a cheque for $4,110,788.52.
Follow the money. It always leads to the truth.
(More details and links regarding this story at Hypebot)