When Taylor Swift decided to remove her entire catalog from Spotify last week, it caused a war with Spotify boss Daniel Ek saying that she was on her way to earning over $6 million in royalties. It seemed like a large paycheck, but Scott Borchetta of Big Machine (Taylor's label) has countered Spotify's claims saying that the singer earned very little - less than $500,000.
Borchetta told Time Magazine that Taylor only got $496,044 for the domestic streams, which is a very small amount compared to what Spotify suggested music artists receive. Borchetta even said that the Nashville-based label has earned more from streaming Taylor's videos on Vevo than on Spotify.
A Spotify spokesperson disagreed with the numbers presented by Borchetta, saying, "The more we grow, the more we pay artists, and we're growing like crazy. Our users, both free and paid, have grown by more than 50 percent in the last year, which means that the run rate for artists of every level of popularity keeps climbing. And Taylor just put out a great record, so her popularity has grown too. We paid Taylor's label and publisher roughly half a million dollars in the month before she took her catalog down-without even having 1989 on our service-and that was only going to go up."
Half a million dollars may look good on any normal person's paycheck, but considering that Taylor is one of the most successful musicians in sales (her most recent album is the first this year to sell more than a million copies in a week, according to The Verge) this amount is very small compared to what she's supposed to be making. Borchetta maintains that Spotify is a bane in the music industry.
He went on to say, "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."
Ek believes that Spotify is what saved the music industry. He wrote in a blog post that served as the site's public statement: "Until we launched Spotify, there were two economic models for streaming services: all free or all paid, never together, and both models had a fatal flaw. The paid-only services never took off (despite spending hundreds of millions of dollars on marketing), because users were being asked to pay for something that they were already getting for free on piracy sites. The free services, which scaled massively, paid next to nothing back to artists and labels. We believed that a blended option-or 'freemium' model-would build scale and monetization together, ultimately creating a new music economy."
Which side of this debate are you on?