Subscription Services and Piracy

I recently did an assignment for Marketing class that talked about the so-called "controversies" surrounding new subscription services like MOG, Rdio, Spotify and others. The big thing I took away from this article was that these kinds of "issues" come up every time something big and new comes around. I love the example of YouTube. When YouTube launched, everyone was up in arms on how artists were going to get paid, and how it was going to kill off music television. Well, the first issue was taken care of pretty quickly, and quite well at that. Artists get paid from ads and also get paid performance royalties for the views of a video.



People (some artists, actually) think with Spotify that they're not getting paid enough from the revenue generated from plays. I agree, to a point. An article came out about a year ago (before Spotify was as huge in the US as it is now) and provided numbers, showing that for an artist to make minimum wage (around $7.50) they would have to have nearly 1.5 million plays on Spotify. Impossible for a struggling independent artist, simple for someone like Lady Gaga.

But here is my argument. What artist do you know is making all their money solely off of Spotify plays? None that I can think of. The artists that are complaining about Spotify and the revenue streams are not the independent artists trying to get noticed. It's big names, such as The Black Keys or Coldplay (who also recently just succumbed and put Mylo Xyloto on Spotify.) I can tell you as a fan of music in general that those artists are not paying much attention to the revenue streams made from Spotify, because they don't need to. They're selling records one way or another. They're selling out tours one way or another. They're selling merch every night of those tours.

Majority of the people that I know that use Spotify do not use it exclusively. I don't. I use Spotify to keep up with new releases I hear at work and get to know the music that consumers are buying. I love discovering new music. If I like it enough and I've got some extra cash, I pick up the album. But at least they're getting a fraction of some sort of money out of the $10 I pay a year for Spotify. What you don't see these same artists complaining about is piracy. I'll be the first to admit that Spotify has removed the need for me to illegally download new release music just to sample it. I haven't illegally downloaded one album since the day I started using Spotify. So, as a word to the big name artists having a problem with putting their music up for fans to listen to, realize that you're helping some people avoid having to use piracy to hear your music (if you don't make it available elsewhere to stream).

The benefit of Spotify and streaming services for independent artists is that they can get their music noticed. You're out on tour and someone walks into the club you're playing and they've never heard your music before. How likely are they going to plunk down $15 for a CD? Not so much. But you announce on stage that, hey if you like what you're hearing, go check us out on Spotify and let us know what you think. If they like it, they'll download it and you'll get a new fan.

Just some thoughts.