Spotify CEO Daniel Ek isn’t happy about the narrative that Spotify is giving the cold shoulder to musicians and songwriters. Taking to Spotify’s blog, Ek went out to set the record straight (no pun intended) and defend his company’s business model. He also addressed Taylor Swift’s recent departure from Spotify.
Ek agrees with Swift that artists should be paid well for what they do, but that’s as far as his understanding goes. “Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it,” wrote Ek. “So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time.”
According to Ek, royalties paid to Swift and other mainstream artists are set to “exceed $6 million a year” for each artist. Ek expects that number to double in a year’s time, though he also revealed that artists, songwriters, music labels, and publishers have received $2 billion in royalties, with half of that doled out in the last year alone.
The figure points to Spotify’s growth, which is also evident in the 50 million active users the company has, 12.5 million of which pay for ad-free streaming. “That’s three times more than the average paying music consumer spent in the past,” wrote Ek. Spotify’s CEO also noted that 80 percent of his company’s subscribers started out as free users.
Speaking of Spotify’s free, ad-supported tier, Ek wrote that the freemium model is vital in the process of convincing users to pay up on a monthly basis. “If you take away only one thing, it should be this: No free, no paid, no two billion dollars,” Ek said. “Here’s the overwhelming, undeniable, inescapable bottom line: the vast majority of music listening is unpaid. If we want to drive people to pay for music, we have to compete with free to get their attention in the first place.”
Going back to Swift, Ek points out that her recent 1989 album is an exception to the overall downward trend album sales have seen in the past few years. Ek believes it isn’t fair to blame services like Spotify when such a trend is occurring in regions where Spotify isn’t in business. “People’s listening habits have changed – and they’re not going to change back.”
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