CEO writes lengthy blog post explaining current health of company and responding to "myths" about streaming
Spotify CEO Daniel Ek has written a blog post explaining how much he estimates Taylor Swift would have made if she had kept her music on the streaming service.
Swift withheld her latest album, ‘1989’, from Spotify when it was released earlier this month and then subsequently decided to remove all of her previous releases from the streaming service.
Now, in a blog posted on the Spotify website, Ek states that Swift is missing out on a potential £3.7m before attempting to debunk a number of “myths” held by people about the service.
Ek begins by stating that Spotify has paid out £630m in royalties to the music industry in the last year and £1.2bn in total since 2008. “We’re trying to build a new music economy that works for artists in a way the music industry never has before. And it is working – Spotify is the single biggest driver of growth in the music industry, the number one source of increasing revenue, and the first or second biggest source of overall music revenue in many places. Those are facts,” the CEO states.
He then goes on to tackle three misconceptions he believes the public have about Spotify, starting with the idea that fans not having to pay to use Spotify means that artists make no money. “Today we have more than 50 million active users of whom 12.5 million are subscribers each paying £75 per year. That’s three times more than the average paying music consumer spent in the past,” Ek argues. “What’s more, the majority of these paying users are under the age of 27, fans who grew up with piracy and never expected to pay for music. But here’s the key fact: more than 80 per cent of our subscribers started as free users.”
Ek then disputes the idea that Spotify’s rate per-stream (estimated around around 0.05p for every play) is so small that no artist could ever make a living through streaming alone. It is here that the claim about Swift and the £3.7m is made. “At our current size, payouts for a top artist like Taylor Swift (before she pulled her catalogue) are on track to exceed £3.7 million a year, and that’s only growing – we expect that number to double again in a year.”
Finally, Ek gets on to the subject of Spotify being damaging to download and album sales figures. “Here’s the thing I really want artists to understand: Our interests are totally aligned with yours,” Ek says as he points out that download sales are falling around the world, even in countries where Spotify is unavailable.
It was revealed earlier last week (November 5) that Swift’s ‘1989’ shifted 1.287 million copies in the US in its first week on sale, making it the fastest-selling album since Eminem’s ‘The Eminem Show’ in 2002 which sold over 1.3m copies. ‘1989’ is the biggest-selling album released in 2014 and the second most popular album of the year so far, behind the Frozen soundtrack (released in November 2013).
Prior to the release of ‘1989’ no album by an artist had reached platinum status in the US in 2014. The album is the 19th to sell over one million copies in America since Nielsen SoundScan began taking records in 1991. Two of the previous 18 already belonged to Swift with her 2012 album ‘Red’ and 2010’s ‘Speak Now’.