There’s a reason why the Eagles didn’t remain on streaming platforms, after all. But streaming cannibalization isn’t a debate — in any way, shape, or form — according to Spotify. Here’s what one Spotify executive told an audience at NARM when the testy topic came up.
Audience Member: “Would you guys say places like Spotify and streaming services are better for up-and-coming artists than more established artists? So say, Lady Gaga may release something, but she may not want to do it on Spotify because she’d be losing sales, giving it away for free.”
BFM Digital founder Steven Corn (moderator): “It’s a good question; are Spotify and other streaming services better for up-and-coming artists as opposed to those with a certain amount of exposure?”
Spotify Account Manager of Label Relations Katie Schlosser: “That’s a really layered question to answer. For a larger artist like Lady Gaga, you can’t think of your unit consumption in the same way as your streaming consumption. Streaming is all about the Long Tail value proposition of each individual user.
“So in the lifetime of a consumer on Spotify – there’s an inflection point where the download of one individual track is overtaken by the actual amount of streaming that an individual user does on that track over time on a streaming music service.
“And then the payouts they outweigh each other and streaming overtakes that individual download.”
“But it’s hard to shift a business and an industry that’s so geared towards first-week sales [towards] the thinking of the long term potential that this new platform, this new model of business is going to be bringing to the industry.”
Corn: “Great answer —”
Schlosser: “Trust me when I say we’ve done extensive research and analysis on this exact question that you’ve raised, whether or not it’s the right move to withhold music from Spotify. There’s been some – there’s been in the past, some big name artists that have taken that path, Coldplay’s latest album, Adele 21 for a while was off of the service.
“We’ve luckily been able to counteract that with the data that’s proving and demonstrating the fact that streaming revenue is additional to actual unit download consumption or physical music sales, and we’ve asked every single label partner that we have, who have artists that have chosen that strategy what they saw.”