Swift’s decision to pull her albums from Spotify doesn’t affect Spotify. It only affects music fans.
Swift says this is “old news.” Months before she pulled her songs from the streaming service last November, she wrote an op-ed in The Wall Street Journal in July explaining why she thinks streaming services like Spotify don’t properly value musicians’ creations.
Spotify, for the record, pays 70% of its revenue to labels, which amounted to roughly $1 billion in payouts last year. But that’s not how artists like Swift see it: When you break it down, labels actually get less than a penny per play, and that’s money going to the labels, not to the artists. So a label would still make less than $1 million off a single song, even if it’s played 100 million times, and the artist would see even less of that money.
It’s unclear how much money Swift actually made from Spotify, but as Buzzfeed pointed out last year, Swift never needed Spotify for the money. She makes most of her money from tours — her most recent one grossed a record $150 million at the box office, and Swift reportedly made $30 million in the first six months.
Of course, people have plenty of other options to listen to Swift’s music: They could buy the physical albums, which is profitable for the artist but not efficient for customers — nobody really listens to CDs anymore, they just import them to computers for later listening. They could also pursue other online outlets like iTunes, Beats Music, Rhapsody, and Pandora.
But Spotify isn’t going away anytime soon.
Even though iTunes has more credit cards on file, Spotify is widely recognized as the most important player in the space right now. Even Apple is jealous: the iPhone maker has reportedly attempted to persuade music labels from breaking ties with Spotify as it preps its own music streaming service.
Spotify gets music: It allows paid subscribers to endlessly binge on music at a reasonable price, similar to Netflix, but it also offers curated content and countless customization options, even for new albums. That’s great for customers who love music, and artists who want their work to be heard.