It has been a bad last week for Spotify, thanks to the fallout from Taylor Swift’s decision to pull her back catalogue from the streaming service, while leaving it up on rivals.
We’ve questioned the tone of Spotify’s response, as well as the survival chances of its ‘everything on free as well as premium’ policy, but out in the wider world there has also been a surge in harder criticism, painting Spotify as an arrogant, artist-unfriendly, unsustainable tech company designed to enrich major labels at the expense of creators.
But it’s time to talk about some home truths regarding all this. First: Spotify has more than 10m paying subscribers, more than Rhapsody, Deezer, Beats Music and Rdio combined.
The Taylor Swift removal has prompted a debate that (brutally simplified) runs ‘free, ad-supported streaming bad, premium subscriptions good’ – yet in Spotify’s world, the former appears to be a much more successful springboard to the latter than anything rivals have so far tried.
By all means let’s debate conversion rates and the potential to window some albums between premium and free tiers, but let’s also discuss the question of whether weakening free will also weaken that path down the funnel to paid – and figure out good alternatives if that’s the case.
Second: there are issues of transparency around Spotify, as with any streaming service, for the terms of its deals. Yet we shouldn’t forget either how much further Spotify has gone than rivals in talking about how it calculates its payouts; how it sees the streaming model evolving; and particularly in providing analytics to artists, for free, to help them get to the bottom of the royalties being paid out for streams of their work.
Spotify was also early into the idea of bringing ticket and merchandise sales into its service, starting to explore whether streaming can drive other income for artists.
The question of those equity stakes for major labels (and indie licensing agency Merlin, too) is cited often, but there’s rather less discussion about the industry climate in 2007 and 2008, when Spotify was signing its deals.
After the lucrative sales of Last.fm, Myspace and YouTube – with all three perceived as having built their businesses on music – we’d have wished any company luck in launching an ambitious new digital music service without having to give up equity.
The image of Spotify as in cahoots with or the pawn of major labels also looks a little shaky when you remember that at several key points in its history – from introducing play restrictions in 2011 to the analytics and published payout formula in 2013 – Spotify and its stakeholders’ interests have not been in harmonious alignment.
One of the points often made in the debate around artists and digital music is that “streaming is the future” – an unreversable transition from sales to streams, and ownership to access, that artists would be foolish to resist.
Streaming as a delivery format may be the future, but often the unspoken implication is that streaming business models as they are now must be liked or lumped. That’s not true: there is still a lot of room for improvement.
But if paid streaming subscriptions are going to be as crucial to musicians and the music industry as all sides of this debate seem to agree, Spotify is currently the most successful seller of those subscriptions. Demonising the company as a bad actor, rather than providing tough, fair and constructive criticism, is a dangerous path to go down.