NEW YORK: Taylor Swift’s pay cheque from Spotify is a lot less than the $6 million it’s promising in the last 12 months for listening by its US users. Spotify is the world’s biggest subscription music streaming service.
Scott Borchetta, CEO of Swift’s record label Big Machine, said counting all listening worldwide, that number jumps to $2 million, Jonathan Prince. That’s still a far cry from the $6 million a year that Spotify is on track to pay Swift and other big recording artists, CEO Daniel Ek said.
As users adopt streaming music services such as Spotify, Pandora and others, downloads of tracks from Apple’s iTunes, the world’s biggest music retailer, have dwindled. In the first half of this year, sales of CDs and downloads declined 14.6% compared with the same period a year earlier.
Meanwhile, the RIAA found streaming services had grown by 28% in the same time period. Some of those streaming services, like Spotify, operate a free tier that dilutes higher royalties from paying subscribers. With the free service, record labels receive a share of the advertising revenue from commercials that play during streaming.
That’s why Swift’s albums can still be found on Radio, Rhapsody and Beats Music, services without a free tier, Borchatta said earlier this week on Six Sense, a radio show co-hosted by former Motley Crue bassist Nikki Six. Spotify declined to allow only paying subscribers access to Swift’s music, hence the decision to remove her catalogue.
In his post, Ek said free is essential — 80% of Spotify 12 million paying subscribers started out using the ad-supported service before deciding to upgrade for features only available in the premium tier. Without a free tier, Spotify would be much smaller and wouldn’t be able to continue adding paying subscribers, he said.
