Taylor Swift’s Latest Breakup Is Spotify, Should Streaming Services Be Worried?

Streaming music services like Spotify are popular for a multitude of reasons, but the biggest one is that their selections border on “incredible”. They’re so good, in fact, that most people will be hard-pressed to find an artist they enjoy not available, and even if there were one or two, it probably wouldn’t impact their desire to keep using the service. Or would it? That’s the question of the day, after country singer-songwriter Taylor Swift pulled not only her latest album 1989 from Spotify, but also the rest of her discography.

I like a lot of obscure bands, and I wouldn’t think twice about the lack of impact Spotify (or any other streaming music service) would feel if one of them decided to pull their collection. But Taylor Swift is on the highest-level. Prior to the pulling of her catalog, Swift reached 2 million followers on Spotify – that’s more than double what The Rolling Stones, Metallica, and even Radiohead can tout.

Swift enjoys nearly 2 million followers on Spotify, catalog be damned. Credit: Eva Rinaldi (Flickr)

If Swift decided to simply delay the release of her latest album on Spotify, the company wouldn’t have that much to worry about. But the fact that she yanked her older albums as well is important. It goes without saying that the goal here is to sell more complete albums, and it’s not hard to see why. Artists already don’t get what they deserve from the sales of their albums, but what they get from services like Spotify is even less. While an iTunes single sale will net an artist about six cents, Spotify will pay them under one cent per listen. In Swift’s case, she also wants to set sales records, and that’s not going to happen when streaming is eating a massive part of the pie.

Would Swift have pulled her catalog if Spotify paid more? It’s really hard to say, but I’m guessing that there’s nothing that Spotify could have done. Swift has equated streaming services to piracy in the past, and that really about says it all.

History has proven that Swift isn’t the only one not pleased with the mechanics of most streaming services. Ultimately, they’re not getting paid enough. That leads to an obvious solution: Just pay artists more. If only it were so easy.

Spotify, like any other business, needs to pay their bills, and need to be paid themselves. That ends up being a good chunk of the revenue. Then we must consider those who don’t buy into the premium service – they’re listening to tracks for free, and costing about a cent to Spotify per track listen. Ultimately, premium subscribers help take care of that, but at the end of the day, what’s left is bound to be thin.

I don’t even dare mention the next solution. At $10 per month, most of Spotify’s customers are likely to think that it’s priced well enough. It’s just music – not TV or movies like what Netflix offers – but it’s crazy convenient and features an unbelievable selection. But despite that, it seems unlikely that many would want to pay more than $10, and really, that seems to be the only real solution to keep people like Swift appeased.

We love @taylorswift13 as much as you do. Here’s a message we hope brings her back http://t.co/yRm5bfNV23 #justsayyes pic.twitter.com/1lj2JB1SMI

— Spotify (@Spotify) November 3, 2014

At the end of the day, one artist is just one artist, regardless of how big they are. If this becomes a trend, then that’s going to be a reason for concern. In time, the tide could turn and the artist could discover that not being on a service like Spotify could hurt them. If fans insist on using a service like Spotify, and one of the artists they like doesn’t have their latest album on it, that’s not minimal revenue, that’s no revenue. Along those same lines, if people are not hearing the new album, that means they may not have much interest in catching a show if it comes to town.

Regardless of how things play out in the future, streaming is here to stay whether artists like it or not, and it seems unlikely at this point that premium services will increase in price, since as I mentioned earlier, that will undoubtedly turn many people away. After all, a major benefit to these services is that it keeps people from pirating – if those people go back, or simply don’t listen to the music at all, it’s not going to bode well for the artist.