One of the more tiresome things to happen at family/social events is when I tell someone I write about the digital music space and they say something like, “Wow, that’s really interesting—have you heard of Pandora? It’s really cool.”
The unwashed, “real” consumers out there, somehow, unbelievably, haven’t heard about the thriving competition in the burgeoning digital music business. They’ve never met a digital jukebox in the sky, they don’t know Beats by Lebron James has a music service, they don’t know how to pronounce Rdio, they’ve never heard, [sharp intake of breath] of wunderkind Daniel Ek.
They know nothing, these people.
Yet, these are the same masses that drive billions of dollars of value in the music business every year through downloads, streaming subscriptions and (mostly, these days) through concert ticket sales.
This is why I think the ongoing controversy around Taylor Swift pulling her music from Spotify is good for Spotify. And not just for Spotify, but the business of music streaming overall.
I ran my “all press is good press” thesis past a senior streaming executive over breakfast this week. His response? “That’s definitely right. Taylor Swift saying anything about streaming is great, I just want to make sure my name’s spelled right in any stories.”
For those of us in and around the digital media business or/and music business, music subscription streaming has been around for a lifetime, since pioneer Rhapsody (in its previous iterations). Spotify, which has been hugely successful in winning friends with the tech savvy press in Europe and the U.S., is by far the biggest service. It has some 50 million active users and 12.5 million paying subscribers. Yet somehow, it isn’t quite in the mainstream in music’s biggest market. While at Billboard, I revealed they had 3 million U.S. users in May, industry estimates are closer to 4 million now. But to really be mainstream in the U.S. you need to have 70 million monthly users like Pandora. You also have to be Thanksgiving-dinner-talk-worthy.
But here’s the thing, if the United States had a royal family, Taylor Swift would be its Queen. So when she picks a fight with you it’s all for the good. I’m willing to make a fairly large bet that Spotify’s press clipping service has been overworked in the last fortnight and their consumer brand awareness will be higher than it’s ever been. That’s why it made sense for the normally-reserved Spotify founder/CEO Daniel Ek to push back at Taylor Swift’s claims on royalty payments in a smartly written blog post that tried to guide the reader to peek inside the black box that is major label artist royalty agreements.
Ek says, both privately and publicly, that growing by network effect a la Facebook rather than brand advertising will take the business to the tipping point of mainstream.
But brawling with Taylor Swift over the arcane issue of digital royalty payments is the next best thing. In fact, the only way it could get better would be if Taylor wrote a song about her difficult break-up with that mean, mean Spotify.
That’s S-P-O-T-I-F-Y, thanks.
This post originally appeared on Medium and has been reprinted with permission.
Photo via Eva Rinaldi/Flickr (CC BY-SA 2.0)
