While the initial burn of Taylor Swift pulling her music from one of the industry's leading streaming services may be cooling slightly, the long distance conversation between Scott Borchetta, the CEO of Swift’s record label, and Spotify's CEO, David Ek remains heated. After Borchetta pointed out on a radio show aired November 7 that other major artists were toying with the idea of making moves comparable to Swift, Ek was quick to defend the company's model and its value to artists.
In a pointed blog post on November 11, Ek wrote:
Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it. So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time. Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work. Quincy Jones posted on Facebook that “Spotify is not the enemy; piracy is the enemy”. You know why? Two numbers: Zero and Two Billion. Piracy doesn’t pay artists a penny – nothing, zilch, zero. Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists. A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then. And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away.
Borchetta answered, “The facts show that the music industry was much better off before Spotify hit these shores. Don’t forget this is for the most successful artist in music today. What about the rest of the artists out there struggling to make a career? Over the last year, what Spotify has paid is the equivalent of less than 50,000 albums sold.”
At the rate of growth Spotify claims to be experiencing, Ek projected an artist of Taylor Swift's popularity to receive $6 million in revenue from the streaming service, but Ek's point was dulled by Borchetta's rebuttle, pointing out the streaming of Swift's videos on Vevo has grossed more than her music did on Spotify.
Could Both Be Right?
In fact, both sides may be right. Borchetta appears to have chosen the lowest possible number - perhaps the last check the label received. Ek, on the other hand, appears to have projected ahead to find the highest likely payout. It's also likely that Borchetta was quoting US revenue only, while Ek projected total global revenue.
It's Time To Re-evaluate
The business decision made by Swift and the stand she's chosen to take in determining the value of her work has prompted an industry-wide conversation that has likely been a long time coming and far from over. Spotify's declaration of war on piracy and seemingly good faith effort to return that revenue back to artists provide may them a valid argument, but the outstanding message here, and the point Swift and Borchetta are attempting to jointly make, is that it's time to re-evaluate the numbers when it comes to music streaming.