With over 50 million users across the globe, Spotify is the leader of all of the online music streaming services. Spotify has had an increase in profits but has also had an increase in loss. The New York Times reported that Spotify earned $1.3 Billion dollars in 2014, a 45% increase from the previous year.
But along with the increase in revenue Spotify also lost a total of $197 million dollars, more than the $68 million that they had lost the year before. Spotify blamed the loss of revenue on the employee hiring that they had done that year stating that they had hired 958 new employees.
As the leading music streaming site it is important for Spotify to have popular artists so that they can increase the number of paid subscribers to help increase their revenue. The only issue is that Spotify pays artists .00068 cents per stream. While plays keep adding up it can lead up to quite a large sum of money but not as much money as if people had actually bought the music.
Time Magazine reported on how much the top songs were making. Calvin Harris’ song “Summer” made a total of $1.7 million dollars in 2014. It had a total of 203 million streams throughout the year. While to the common person that seems like a lot of money, artists have a completely different opinion.
Last November Taylor Swift made a giant splash right before her 1989 album release. Taylor Swift decided to take her music off of Spotify, saying:
“I felt like I was saying to my fans, ‘If you create music someday, if you create a painting someday, someone can just walk into a museum, take it off the wall, rip off a corner off it, and it’s theirs now and they don’t have to pay for it.’ I didn’t like the perception that it was putting forth. And so I decided to change the way I was doing things.”
Taylor Swift has a respectable opinion on it. Swift didn’t like her music being on Spotify because, “I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music.” Most people would agree with her, but some people would think that having her fans enjoy her music is better than her getting compensated for it.
Pirating has become such an issue with music over the past few years. Having your music on Spotify creates a little bit of revenue and it is better than receiving nothing for your music at all.
Even though Spotify may not be beneficial to mainstream artists it is however extremely beneficial for underground and local artists. It is really easy for underground and local music to be spread around. Artists can put their music up for free and can be spread across by word of mouth. People can suggest a band and tell their friends that they are on Spotify and then that person can just whip out their phone and find them in the blink of an eye.
There are pros and cons of Spotify. A con would be that mainstream artists do not feel like they are being compensated. A pro is that it can be beneficial to not very well known artists. Maybe Spotify will increase the amount of money for ad free streaming to try and keep the popular artists there or maybe they will find something else. Will Spotify stay the top streaming site over the next couple of years?