The removal of all of Taylor Swift’s albums from Spotify and other streaming services is sending minor shockwaves through the music industry. Swift’s label Big Machine has long adhered to a streaming windowing strategy and there is pretty compelling evidence that the approach has paid dividends. Swift’s ‘1989’ is not only on track to be the only million selling US album this year it is also set to have the highest ever first week album sales for a female artist, again in the US. No mean feat considering how much album sales have tanked. While it is impossible to prove the exact degree of causality, it would be fatuous to claim that windowing had done anything less than not hurt those sales. Windowing is an issue that refuses to go away but is a natural effect of the transition phase we are in.
Some artists and labels were just as fearful of iTunes in the 2000’s as they are now of Spotify. Heck, it took the Beatles seven whole years to finally license their catalogue. Right now there is still a very sizeable music sales marketplace. 79% of all recorded music revenue in 2013 came from sales. So it is understandable that some labels want to protect that Golden Goose as long as they can. And it is little compensation for labels that declining music sales are made up by increased live revenues. In even the most label friendly 360 deals music sales are still the core revenue stream.
However the shift to consumption models is an inevitable process. In the short term expect copy cat actions. Labels and artists will see the run away success of ‘1989’ and conclude that windowing played a key role. This may hurt Spotify just as it was beginning to feel good about proving its model. But the long view shows us that licensed streaming music will be ubiquitous five years from now, music sales will not. Even if Taylor Swift is still at the top of her game in 2019 she won’t be selling any 1 million albums anymore.
Spotify though can’t wait five years for Swift to shake off her streaming inhibitions. It can however help itself by accepting that its free tier should be on a different release window from its paid tier. If it doesn’t it makes windowing a binary equation which in turn makes it easier for an entire blanket ban to be conceived.
Of course the biggest irony in all this is that the free streaming services face no such blocks. All of Swift’s videos are still on YouTube and you can find her music all over Soundcloud, let alone Grooveshark. As MIDiA revealed last week, YouTube is one of the largest threats to music revenue. But because the music industry still views it as a marketing channel rather than a consumption channel it is measured by different standards. Thus 10 million YouTube views is a promotional success, whereas 10 million Spotify streams is x thousand lost sales. This hypocritical inconsistency has to end. Spotify premium customers are some of the most valuable music fans there are, most YouTube users are not.
And both YouTube and Soundcloud also fail to crack down on blatant misuse of their platforms. As the screen grab above shows, YouTube makes it easier than easy to access the full ‘1989’ album, which in this instance is fully monetized and has 400,000 views. Meanwhile Soundcloud also has the full album, this time conveniently presented as individual tracks. And even if / when UMG catches up with these infringing files, not only will more pop up, YouTube also has this, a full ‘1989’ playlist, full of non-infringing, Vevo videos. The simple fact is that too much is given away for free on YouTube. If Big Machine and Taylor Swift are really worried about cannibalizing album sales, they should take a long hard look at their YouTube strategy before pulling their content from Spotify.
UPDATE: UMG caught up with the 400,000 views full album YouTube video of ‘1989’ (that was quick) but the very same user has multiple other instances of the full ‘1989’ album which have hundreds of thousands of views and are still live.
I think it was a smart decision and we’ll likely see more of it. Taylor Swift’s removal of albums off streaming will likely translate to sales of her past work. Already on iTunes she has 4 albums in the top 200 and I expect them to increase their positions through sales in the upcoming weeks through the halo effect. If those albums were on streaming alone, they’d generate a fraction of the revenue she’ll be earning at this moment.
You must give the idiot who posted it on YouTube some credit for persistence, but none of the duplicate versions work either. Let’s hope Taylor Swift or her label sue the uploader personally, pour decourager les autres.
BTW, as of now her back catalogue is still available on rara.com, and according to some comments also on Rhapsody and Rdio. Maybe that’s just a time-lag, but at the moment her taking it off Spotify looks like a specific reaction to Spotify’s public bullying.
I am curious where do you think songwriting is going? With all this streaming will this be the end of the songwriter who doesn’t sing? I hope not but would love your take on it?
Great article, Mark. Isn’t it the case that a different release schedule for free users will work but only when there is critical mass on Spotify? If they did this now it could cause an exodus of users away from Spotify to other legal sites where there isn’t a staggered release schedule.
Here is what we think. https://indigoboom.com/6-possible-reasons-taylor-swift-took-music-spotify/
Chris – I think songwriters will need to start getting smarter about how they operate commercially. For example getting involved as equity owning members of artist projects before they get signed so they get a % of all that artist’s revenue streams etc.
Kenyonarts – it all comes down to what the end game is for Spotify free. if it is simply meant to be a compelling free music destination then yes you are right that would be a concern. But if it is instead meant to be an acquisition channel for Spotify’s paid offering, then giving reasons for people to sign up to paid should be the driving force.
David – the continued presence of Swift on other services does indeed point to there being an additional unilateral Big Machine – Spotify business issue at work here
Re Youtube, other studies say it has no impact on sales: http://cep.lse.ac.uk/pubs/download/dp1265.pdf
The real issue here is the fact that there is no concept of ‘streaming rights’ anymore. Labels provide rights to retailers in the metadata and it has fragmented to a lower level of granularity.
The problem is the public, certain press and even labels have no grasp of what is provided in metadata and further confused by it’s inconsistent use across the music spectrum.
We are talking interactive streaming, non-interactive streaming across free services, subscription services and ad-supported services.
If a restriction from all these services that’s fine but long term that’s still where the market is heading with countries all heading there at different speeds. So worldwide some markets may care less about this than others.
The opt-outs are still few and far between and certainly only big names could make any impact but you can still find Taylor Swift on radio-like services. So inconsistent inclusion only causes customers confusion – and they pay the industry.
It would be interesting to see the impact of pirate sites and downloads of her albums. Just provides another focus onto those sites where it is not needed.
Someone’s gotta say it: this is a great post. By putting forward the long view, you rebut those who misconstrue what is likely just a negotiating ploy, not a return to the good old days before streaming. Plus, you give both Spotify and the music industry some practical tips.
You’re right, “the long view shows us that licensed streaming music will be ubiquitous five years from now, music sales will not.” I would add, five years from now, the whole Taylor Swift – Spotify imbroglio will be nothing more than a footnote.
I shared a link to your post on my Rock Around The Web Facebook page earlier today.
Reblogged this on BRL MUSIC.
It sounds like the uncredited author of this piece is scared to death of Taylor’s repudiation of the streaming model. Predicting that she wont sell albums like this in five years is wishful thinking that the pony you put your money on is still going to win the race, no matter how bad it stumbles. And defending spotify by dissing youtube is weak. Somebody just swallowed hard when they realized the con-job streaming model is doomed
Dear Christopher – I am not exactly uncredited – this is my blog. All posts are by me. Find more about me here: https://musicindustryblog.wordpress.com/about/
I have no vested interested in the streaming model so have no fear factor of Swift’s actions. In fact if you bother to read the post properly you’ll see that I explain windowing is likely to have helped her sales.
But let’s be clear. Swift will not be selling 1 million albums in 5 years. No one will. The model is changing. Like it or loathe it, it is where the future is heading. Change is difficult but taking a luddite rejectionist approach to change is most likely to leave you high and dry.
Also, I am defending Spotify. I am defending access based models of which streaming and Spotify merely happen to be manifestations.
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