Earlier this week Taylor Swift and Spotify had a falling out when the streaming giant called her out for not releasing her new album 1989 on its service. As a result Swift and her team pulled all of her music from Spotify. Spotify in theory is a great idea but there's a darker side to streaming music that detracts from music's worth.
Streaming services and radio have different sets of rules than traditional copyright laws. Spotify pays 70% of its revenue out but that doesn't equate to more money for the artist or songwriter. $6,000 to $8,400 is paid out per one million plays. When the math is done, that equals $.006 to $.0084 per play. To put that in perspective, current mechanical royalty rates for each single, now mostly digital download in the U.S., are set at 9.1 cents for songs under five minutes that gets paid to songwriters. For ten downloads, $1.00 would be paid out to songwriters.
Spotify however has been in talks with the major labels, artists and have done some negotiating. Pandora radio on the other hand is suing to pay songwriters less, lobbying Congress who sets these rules and trying to trick their way into not paying artists and songwriters fairly. Internet radio does not follow the same rules as traditional terrestrial radio.
Taylor Swift not releasing 1989 to the service should have been expected. 2012's Red was not initially released to Spotify. Earlier this year, the songwriter wrote a column in The Wall Street Journal "Music is art and art is important and rare. Important, rare things are valuable. Valuable things should be paid for."
While Swift and her team made the move to protect the integrity of writing, U2's Bono praises Spotify and the new digital era of putting music in listeners hands. The battle going forward is now handling the financial aspect and making sure artists and songwriters are paid fairly for the time and money they put into making these projects. It's a business pulling against creativity.