Spotify CEO: Without us, the music business would be dead

How We Buy
How We Buy

Last night’s Grammy awards were aflutter with more than just songs and gossip. Particularly in the spotlight was Recording Academy president Neil Portnow, who spent his time on stage aiming punches at the music streaming industry for delivering less-than-lucrative profits to artists. “Isn’t a song worth more than a penny?” Portnow demanded. (For those feeling major déjà vu: He delivered much the same rant at last year’s Grammys.)

Today (Feb. 16), Daniel Ek—CEO and co-founder of Spotify, the leading music streaming service in the world right now with nearly 30 million paying subscribers—struck back with his own opinions on music streaming’s place in the broader business. In a Q&A session on Quora, Ek replied to the following query:

How do you respond to some artists’ claims that music streaming services are harmful to the industry?

With the following answer (excerpted):

Look, we pay the great majority of our revenue back to the music indsutry [sic]. And as we grow, that revenue is really making a difference. Many people don’t realize that the music industry was in decline throughout all the download years (with a one-year exception in which it was basically flat). Now, finally, after years and years of decline, music is growing again, streaming is behind the growth in music, and Spotify is behind the growth in streaming.

In essence, Ek is claiming Spotify and co. are actually responsible for the music business’s continued success. “We are all in this together,” he wrote in the Quora answer, insisting that Spotify is “committed” to the success of songwriters and producers.

It’s true the company pays a big chunk of its revenues to record labels and artists. But that chunk, when divvied up, doesn’t come out to very much for individual music-makers at all. Many artists are in revolt. Taylor Swift and Radiohead’s Thom Yorke both publicly pulled music from Spotify in protests of its meager payouts; Adele, Prince, and several others have followed suit.

Some of these moves may have been pretty effective. A few months ago, Spotify decided to tamp down on its original all-music-should-be-free attitude and allow some artists to exclusively release content on the service’s paid tier, which yields more profit than its ad-supported free tier. If the rebellions keep up, Spotify—and Ek—may be forced to sing a different tune: one that’s not so much about the benefits streaming poses for the music industry, but rather the concessions it should make.

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