In case you missed it last week, pop megastar Taylor Swift created a minor controversy last week by pulling her songs off the popular streaming service Spotify, on the basis that Spotify underpaid artists for their work. As Mark Hemingway noted, the economics of Spotify do not make a tremendous amount of sense from the perspective of musicians:
But if you care about music, ultimately you have to care about musicians, and musicians have value. Taylor Swift may be incapable of writing an introspective lyric to save her life, but she’s figured out this much. In an article in the Wall Street Journallast year she wrote:
Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.
Undervaluing artists is exactly what streaming services do. Spotify pays a royalty rate of .006 to .0086 per song that’s streamed. If a band or artist streams a million songs on Spotify, that’s only $6,000 to $8,600—around what you’d earn if you sold just 500 albums at $15 a pop.
Many of the people who are criticizing Taylor Swift for this are raising a number of red herrings, such as the fact that unlike the artists that Swift is purporting to stick up for, Swift does not need the money from Spotify which (in their mind) makes her a poor vehicle for carrying this message. However, as with the fight over Napster, it absolutely has to be an artist with the clout of Swift to force changes in the system – a marginal artist pulling his music from Spotify hurts only himself and forces no change to the system. Until and unless a musician becomes a megastar, they can no more afford to refuse to participate in Spotify these days than they could refuse to allow radio stations to play their music in days gone past, as Spotify and similar streaming services now serve as the primary drivers of market introduction that are the lifeblood of finding and disseminating new music talent to the public.
It might be worth asking at this point how musicians allowed themselves to be place in this predicament. The answer (sadly and simply) is that social mores against theft of the property of musicians broke down at the same time as technology provided the means for such theft to occur easily and without significant fear of consequences. Thus musicians face a market force that is (at present) almost unique in the marketplace – the reality that their product will face widespread (in fact, nearly universal) theft if it is priced “too high,” as “too high” is determined by noted economics experts in high school classrooms across America.
As Hemingway noted, the generation that arose during the construction of the Internet developed troubling beliefs about the nature and existence of private property itself, at least with respect to intellectual property. When Napster, Kazaa and the like made it easily possible to obtain music without paying for it (i.e., stealing it), most people who had access to the technology did so with little or no moral compunction. The justifications offered for this theft would not have passed muster for any other product, but it occurred anyway.
“Record companies charge exorbitant prices for CDs!” claimed the thieves. PepsiCo charges a ludicrous amount for a 20 oz bottle of Pepsi relative to what it costs to produce a bottle of Pepsi, but people who think Pepsi costs too much just don’t buy Pepsi; they don’t feel entitled to steal it. “The artists are so rich they don’t need my money!” The CEO of McDonald’s is presumably richer than all but the most successful of musical artists but that doesn’t mean that people are morally justified in taking their mediocre burgers without paying for them.
The record companies attempted a number of unsuccessful tactics to address the widespread theft of their property but learned quickly that any measure taken to protect their property under copyright laws resulted in terrible PR because their customers rejected the principle that they were compelled by law to pay for services received. Thus, streaming services like Spotify have become essentially the norm for modern artists – they are paid almost nothing for downloads and are thankful to receive it. Now more than ever, if you are a musician, you had better hope that you can command significant live audiences or any dreams of making a large paycheck will be just that – dreams.
This new economic reality will (and probably already has) had deleterious effects on the quantity and quality of popular music available on the market. The life of a struggling, pre-fame artist is a difficult one; travel conditions are awful, the pay is insufficient to live on, and frustration and rejection are nearly constant. The only thing that causes artists to persevere through years and years of this is the small hope of a large payday at the end of the road someday. As that payday becomes smaller and smaller prospectively, more and more artists should be expected to give up the game prematurely and more quality art will be lost to history. Sadly, the artists who will be lost will be those whose craft has been honed on the anvil of adversity and real life struggle for acceptance – and they will presumably be replaced by plastic veneer artists foisted upon us by reality television shows like American Idol and The Voice.
In full disclosure, I wrote this post while listening to Dawes’ excellent album North Hills on Spotify – and I would have likely never heard of the artist or the album if not for Spotify’s radio service. But I fully support Taylor Swift’s fight to reform the economics of modern streaming services – and if that means I have to pay significantly more for Spotify’s service or go back to an iTunes like model for music, I will happily do so – because ultimately, the content that has been created belongs to the artists both morally and legally, and I support their right to distribute it (or not) as they see fit, just like I do with any physical property that has ever been created. And whatever you think about Taylor Swift’s music (personally, although pop is not really my thing, I find her better than most pop artists currently working), you should recognize that what she is ultimately fighting against is the death of quality music altogether.