After a bruising year for streaming music service Spotify, chief executive Daniel Ek admits the company is thinking hard about how to convince artists like Taylor Swift of its value to their careers.
“What it has highlighted for us is we need to do a better job explaining to artists how streaming benefits them,” Ek told music industry magazine Billboard, of the dispute with Swift that saw her remove her entire back catalogue from Spotify.
“The point that’s been lost is that Spotify’s the fastest-growing revenue source the industry has. There are many artists to whom, through the labels, we’re paying out millions a year already. Those cheque sizes will just keep increasing.”
The key to Swift’s decision to pull her music from Spotify was the company’s refusal to allow her to make it available to the company’s 12.5 million paying subscribers, but not to its 37.5 million free users.
According to Ek, that policy isn’t changing. “Right now we don’t allow that,” he told Billboard:
“There’s a lot of other places where you can access that music for free, so our view is the only thing that happens by not being in the free service is that the consumer then has to go to another service to get the song, and they will.
If they stay on the free service there’s a lot more likelihood that the consumer ends up becoming a paying subscriber, thereby generating more revenue. And then on top of that we’re paying a considerable amount every single time someone does play a song, whether it’s on the free tier or the paid tier. It’s something that we keep on discussing internally but right now our stance is the same as it has been before.”
However, Spotify is planning to make its subscription service more appealing in 2015 in an effort to persuade free users to start paying, with Ek suggesting labels are keen to help “build even more content and put in the subscription” next year.
“Just like we’ve had deluxe edition of albums, everyone is thinking about how does that look like in a future world?” he said. “Lossless music – is that a higher priced tier? Is that something that comes with deluxe editions? How should we package subscriptions to consumers? That’s a very big topic right now on the label side.”
He’s not wrong, judging by comments made to analysts by Warner Music Group’s chief executive Stephen Cooper as he announced that label’s latest financial results, as reported by Recode:
“In our view, right now, enabling meaningful global growth in the number of paying subscribers is the best option for artists, for songwriters, for copyright owners and for the services themselves.
Subscription streaming is not only a fantastic offering for music fans, it will propel the long-term health of the music industry. We look forward to continuing to work closely with our partners to turbo-charge the adoption rate for subscription streaming.”
Spotify may be the biggest subscription music service by some distance, but with YouTube having recently entered the market and Apple lurking ahead, Spotify’s ability to “turbo-charge” its subscriptions in 2015 will be key to its future – and to its chances of ever, ever getting back together with Taylor.
• Streaming music: how CAN artists make it pay?
