In the last couple of days there has been many reports about Taylor Swift taking all her music off streaming services such as Spotify. Now as a fan of Taylor Swift and a Spotify user you may be annoyed to find you now can’t listen to her latest and greatest album. Before I was going to write this post I wanted to do as much research
as possible as to why Taylor and other artists would pull out of streaming services. Taylor Swift’s reason for the bold move is she wants music, an art, to be valued. So we’ll have a look and see how an album is valued on Spotify, iTunes and traditional CD’s.
Lets do a little maths for this… (skip the next two paragraphs if you don’t care for numbers ;] )
On Spotify for every play of a song the artist receives somewhere between £0.004-£0.005* where as if their physical album costs £8 the artist will receive around £1.04** per sale. Lets just assume it’s £0.005 for streaming to make it easier. You’d have to stream songs from an artist 208 times for them to receive the same amount as if you just bought the physical album. I suppose on the average album you’d need to listen to it from start to finish around 20 times for that amount of money.
For avid fans of an artist listening to the album 20 times will happen with ease and very quickly but for most, they probably won’t listen to the album anywhere near that much. Now would this average out to be the same price as if they could only buy the CD? I highly doubt it would! Now we can’t talk about CD’s and streaming without downloads being discussed. In 2013 the revenue of downloads was around 30%*** of the total revenue in the UK and the US while streaming was around 20% and physical sales were the other 50%. Now if a signed singer songwriter sells on iTunes they receive around 22% from the sale. So using our £8 album example again they’d receive £1.76 per sale. That suggests you’d make more selling on iTunes getting £1.76 rather than you do selling the physical CD and making £1.04.
So from the numbers I’d definitely say for artists it’s best you download their music on services such as iTunes rather than buy the physical CD. Yet downloads and CD’s are still trumping streaming. Whereas for consumers streaming trumps downloads and even more so for CD’s. That for me is the issue, it’s cheaper and easier to stream therefore people will continue to do that. Now streaming isn’t all bad, I have found so many artists because of Spotify cause I play genre radio stations. As I’d find a song I liked I’d go listen to more of that artist’s music and end up buying their music either physical or download. As others have said artists maybe then need to stop thinking of Spotify as a way of making money but a way to be discovered. Unfortunately, this only works when consumers use Spotify as a discovery service though.
For me, I think Taylor Swift has completely nailed it. We need to give music and all forms of art the value they deserve like we do with so many other types of products. And as the revenue from the music industry had slowly been on the decline over the last few years but as CD’s started to decline Downloads increased at pretty much the same rate. I just think we need to keep buying our music as downloads for now till a fairer streaming service comes along.
What are your thoughts? How do you pay for your music?
I found the following data in several places but these are just an example of where. All info found no older than 2 years so it can be somewhat relevant to now.
*http://business.time.com/2013/12/03/heres-how-much-money-top-musicians-are-making-on-spotify/
**http://www.bbc.co.uk/news/magazine-23840744
***http://www.theguardian.com/technology/2014/mar/18/music-sales-ifpi-2013-spotify-streaming