Tuesday, November 4, 2014

Taylor Swift Tells Spotify To Shake It Off

Free does not seem to be a good business model in the music business.  Faced with a digital disruption, music sales have been seriously hurt.  Music stores like Tower Records and HMV are gone and customers who once bought physical copies of music on vinyl or cd are now moving to digital downloads, while others are enjoying the access of music through streaming services.  But artists are also seeing less of a return on their creative expression and Taylor Swift has decided to do something about it.

On Monday, she pulled all of her music from the free streaming service Spotify.  Certainly, the decision was a financial one.  With single and album digital downloads down, and streaming usage up, the economics don't favor the artist.  The limited streaming availability may be part of a supply and demand relationship.  Cut back the supply and demand for Swift music will rise with purchase the more accessible option over streaming. 

And while Spotify has lost access to Swift's entire music library, Mashable notes "that Swift's music, sans 1989, is available on the Apple-owned Beats Music service, a smaller streaming rival whose executives have stressed a desire to secure artist exclusives." How long that lasts or what the business move is behind the arrangement may soon come to light.

As single artist pulling music from Spotify and other streaming music services may not cause major disruptions, but the success of such a move could be the disruption that causes other artists to do the same thing and alter the entire streaming business model.  Spotify needs content to attract its audience; without it, consumers will seek other sources.  The biggest concern though for the artists are that such a move leads consumers back to the Napster days of illegal downloads.  Some revenue may be better than none at all. 

1 comment:

  1. With this trend, Spotify will become the NetFlix or Amazon Prime of music. They'll offer a huge back-catalog and a few originally produced artists. Beats and Rhapsody might become the HBO and Showtime of music, where they get earlier access to stream newer and hotter music. But none will get it until it has an exclusive retail window where consumers buy early access to it and terrestrial radio (which pays higher royalties) gets a chance to put it in rotation.

    So long as retail pricing remains reasonable and songs get released worldwideinstead of with complex regional BS like movies, this could work.