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The Music Industry's Spotify Refuseniks Are Missing The Point

By NME Blog

Posted on 22 Feb 12

 
 

Oh dear. Spare a thought for Spotify which, once the good ninja against piracy, now stands accused by an unlikely torch-and-pitchfork mob of Coldplay, Adele and The Black Keys (or at least, the labels who represent them). All are howling that Spotify doesn’t pay them enough. Many of the biggest artists in history - Metallica, The Beatles, AC/DC - remain missing from the Spotify catalogue. Arcade Fire and Bob Dylan have only reluctantly brought their songs to streaming services.





Money, PR and influence mean all can peddle their opinions about streaming and how it’s damaging their profits. But as no one’s in a position to prove that at this stage, let’s debunk the myths and misinformation:

Myth 1Withholding records drives sales

Coldplay’s manager, Dave Holmes, clearly knows something we don’t, because there’s nothing to back this theory up. If anything, parallels in the film industry show that ‘windowing’ doesn’t work. So Hollywood likes to keep a long gap between releasing a film and bringing it to, say, Netflix or DVD. All well and good for driving up cinema visits – except analysts from Carnegie Mellon and Heinz College say that this can hike up piracy by as much as 70%.



Myth 2Streaming can’t replace CDs

The Black Keys conveniently forget that Spotify always intended to stop people thieving music, not to magic CDs back into vogue. On that front it’s doing pretty well. The Media Vision Group found last year that the percentage of music fans pirating in Sweden dropped from 47% to 23%, and another study from Norstat shows piracy in Denmark and Norway halved once music listeners started streaming.



Myth 3Streaming doesn’t pay enough

In November, King Creosote collaborator Jon Hopkins raged on Twitter: “Got paid £8 for 90,000 plays. Fuck spotify”. But again, it’s just too early to tell what kind of money streaming can generate in the long term - and that’s according to the body behind Adele’s own label, Beggars Group. Its head of strategy, Simon Wheeler, says no artist at that point, not even Lady Gaga, would have received a meaningful amount of cash worth discussing. Wheeler also agrees with Spotify that measuring the royalties when an individual track is streamed is “pointless”, mostly because you can’t compare paying ‘rent’ for a track to owning it for life.



Myth 4People still prefer CDs

True, but only if you’re after the quick buck. The number of CDs leaving the shelf dropped 14% last year, falling for the third year in a row, while streaming was one of the only areas that’s actually grew. For now, Spotify and its competitors only bring in 3% of the music industry’s money, but that’s a huge improvement on the 0% brought in by piracy.

There is one stalwart who has got it. “It doesn't affect me because I look at the internet as the new radio. I look at the radio as gone,” says Neil Young. “If you really want to hear it, let's make it available, let them hear it, let them hear the 95 percent of it." Spotify too seems to understand music marketing better than the industry itself, wangling its way onto Facebook to make music as it should be – social, shareable and affordable.


 
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