After Taylor Swift withdrew “1989,” her latest album, from Spotify and YouTube this week due to copyright and revenue concerns, a flurry of debate ensued about the merits of music streaming services. Spotify, Pandora, iTunes Radio and other streaming services let users listen to music in artist playlists or genre stations with occasional ads. These services are available on a variety of online and application platforms throughout the United States, Canada and much of Europe. When these services reach more countries, the market for music stations will greatly expand. Given these facts and the decline in pirated music and digital sales, it is no surprise that services like Spotify are being scrutinized.
Why do services like Spotify exist in the first place? They were founded to increase the exposure of music artists and to give them an additional source of revenue. Musicians draw their revenue from a variety of sources: concerts, endorsements, commercials, radio, film use and finally album and song purchases.
According to The Guardian, while artists earn an average of $74.19 for a song played on the radio and $93,000 for a private concert, they garner a mere $1.28 per album sale. Although most new artists don’t have their music played in commercials or Hollywood films, the fact remains that they too earn a large proportion of their income from concerts and shouldn’t expect to garner large sums of money from album sales or contracts with streaming services.
The fact of the matter is that streaming services are not known as money-raisers for music artists. Even world-renowned artists like Eminem make only $373,000 a year per song on Spotify. Yet he and the vast majority of music artists, well-known and obscure, flock to these services in droves because the publicity they get from these sources exceeds revenue losses. Before music streaming services were created, YouTube launched anonymous singers like Justin Bieber and Susan Boyle to an international audiences. Pandora, Spotify and iTunes Radio have taken that baton and run with it, elevating up-and-coming artists in featured playlists. The Guardian reported this year that 23 percent of Americans use subscription and streaming services and that revenue for streaming services broke the $1 billion mark this spring. This trend in music bodes well for all artists because their revenue will likely balloon with an expanding market.
The issue of streaming services and artist revenue is a complex one because of its many dimensions. One must first consider and compare the interests of the many parties involved: the artist, their label, the songwriter, the audience and society. A case can certainly be made that services like Spotify are not acting ethically enough when making deals with artists and their record labels, and long-term changes should be made to Spotify’s policy to further improve the service. However, artists should ultimately view services like Spotify as a tool they can use to amplify their influence in the music market, not as a significant source of income.