About Hannah Mendelsohn

H W Odum Inst Res Social Sci

Spotify: Is it Hurting the Music Industry?

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Technology has not only made it easier to listen to your favorite songs, but it also allows artists to easily get their music to their audience. Spotify is an online music streaming service that lets users listen to music for free with ads, or they can opt to pay a monthly fee and listen to whatever they want without interruptions.

Spotify-iPhone-560x373Online music streaming is very popular among consumers, however some artists, such as Taylor Swift, do not like this. Swift recently stated her opinion of Spotify in an interview and said: “I’m always up for trying something. And I tried it and I didn’t like the way it felt. I think there should be an inherent value placed on art.” Swift believes that free music streaming services are one of the main causes of shrinking record sales, and that value is not being placed on the music that artists are creating.

141113-Taylor-Swift-SpotifyDespite Swift’s claims that Spotify is hurting the music industry, recent research shows that music streaming services are actually “revenue-neutral” for the recorded music industry. According to a CNBC article, this means that “streaming does disrupt traditional music sales but revenue derived from the recent growth in streaming evens out what is lost in sales.”

One celebrity that thinks highly of Spotify is Ed Sheeran. Recently in a Spotify blog post, Sheeran said:  “Chuffed to hear that ‘Thinking Out Loud’ has had half a billion plays on Spotify. Being the first artist to hit that milestone is amazing. Thanks to all the people who use this as a wedding song, soundtrack to a date, and as a way to woo someone into a netflix-and-chill situation.”

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So, how much is Spotify paying these artists and record labels to be able to play their music? According to Spotify, rights holders receive an average “per stream” payout between $0.006 and $0.0084. This doesn’t sound like much, but this means that Ed Sheeran’s ‘Thinking Out Loud’ would have made between $3 million and $4.2 million. That is a lot of money to make off of just one song.

In conclusion, music artists themselves are not hurting from online music streaming. As you can see, big artists such as Ed Sheeran are making millions by having their music on this platform. Spotify however brings almost no financial gain to the music industry itself, but it does however prevent losses. By giving consumers the option of free music streaming, less people are going online and illegally downloading pirated music. I believe Spotify to be a win-win situation for consumers and the music industry.