Taylor Swift's Timely Exit from Spotify and What It Means to Music Consumers

Taylor Swift's Timely Exit from Spotify and What It Means to Music Consumers
The break-up between Taylor Swift (her record company) and Spotify comes just as the mega star is projected to shatter this year’s first-week sales record.

The landscape of popular music has shifted over the years, from records and CDs to digital downloads and now the latest incarnation that’s taking hold fast: streaming services like Spotify, Pandora, iHeartRadio, Beats Music (just acquired by Apple) and Sony Music.
Now comes a high-profile break-up between Taylor Swift (her record company) and Spotify, just as the mega star is projected to shatter this year’s first-week sales record.
Big Machine Label Group has pulled the star’s catalog from Spotify, prompting the streaming service to take the unusual and somewhat humbling move of appealing to her heart in a blog post titled, “On Taylor Swift’s Decision To Remove Her Music from Spotify.”
Writes Spotify: “We love Taylor Swift, and our more than 40 million users love her even more – nearly 16 million of them have played her songs in the last 30 days, and she’s on over 19 million playlists… We hope she’ll change her mind and join us in building a new music economy that works for everyone.”
The New Music Economy
That new economy for music consumers has to do with the surging popularity of music streaming, versus the flagging sales in digital downloads for the artists and the labels.
This past summer, Nielsen’s U.S. report on the first half of 2014 found that digital music consumption is moving very quickly from downloads to streaming. On-demand streaming was up 42 percent over the first half of 2013, racking up 70 billion play in the first half of 2014.

Meanwhile, digital track sales fell 13 percent to 593.6 million and album sales fell 11.6 percent to 53.8 million.
Why is Taylor Swift/Big Machine pulling out of Spotify? Media reports are saying that Scott Borchetta, CEO and president of the Big Machine Label Group wants to sell the record company.
BusinessInsider reports that a source says Borchetta believes pulling Swift’s music off Spotify will create “scarcity” online, and fuel higher sales in CDs and paid downloads.
The amount of money at stake is startling. Swift’s new record reportedly could sell 1.3 million copies during its opening weekend, which would be the biggest for any album since 2002.
That’s 12 years ago, and a year before the iTunes music store even existed. At $10 an album download, that’s $13 million in revenue in one week.

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