Spotify's CEO on Tuesday defended his streaming service in the wake of some pretty harsh comments from current pop goddess Taylor Swift.
Swift pulled her music from Spotify last week. "I'm not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists, and creators of this music," she said in an interview last week.
Spotify's chief executive Daniel Ek took issue with Swift's claims, writing that Spotify has paid labels and publishers $2 billion since 2008.
"When I hear stories about artists and songwriters who say they’ve seen little or no money from streaming and are naturally angry and frustrated, I’m really frustrated too," Ek writes.
He says that an artist like Swift (mega huge pop-star) would be on track to earn more than $6 million this year via Spotify.
Ek compares Spotify to good old-fashioned terrestrial radio. If a song is played on a moderately-sized U.S. radio station, around 500,000 people hear it and the label makes no money, he says. Labels and publishers make between $3,000 and $4,000 for 500,000 plays on Spotify, he explains.
Spotify has said that it pays rights holders between $0.006 and $0.0084 each time a song is played. The company pays 70 percent of its revenue to rights holders and keeps 30 percent.
The comparison seems spot-on (yes we punned there), but consider that streaming is gradually taking over as our preferred way of listening to music. People are listening to Spotify instead of paying for music. On-demand streaming (like Spotify) was up 42 percent in the first half of 2013 while digital song sales fell 13 percent. So this cheaper system isn't really competing with terrestrial radio but with a service like iTunes, where artists are generally better compensated.
Swift is hardly the only artist calling out Spotify: Musicians say that they're paid incredibly little from streaming sites, even when their songs are popular. Musician Damon Krukowski of Galaxie 500 and Damon & Naomi wrote an essay for Pitchfork a few years ago saying that each writer of Galaxie 500's song "Tugboat" was paid 35 cents for the 5,960 times it was played on Spotify.
Ek says that Spotify shouldn't be Swift's enemy, piracy should be. Her new album was the most popular one on Pirate Bay last week, he writes. Yet, the decision to remove her music from Spotify has clearly worked out for Swift, though. "1989" was the first platinum album of 2014, selling 1.287 million copies in its debut week.