Spotify is great for superstars like Drake and Ed Sheeran. But according to the head of Taylor Swift’s label, Scott Borchetta, the numbers are tricky — and it’s not trickling down for most artists.
Taylor Swift is notorious for bashing Spotify. Aside from withholding her music from the platform, Swift has openly blasted the company’s business model as a “startup with no cash flow” with the behavior of a “corporate machine”.
Amazingly, the head of Taylor Swift’s label Big Machine Records — Scott Borchetta — is relatively tame in comparison. But he’s definitely tough on streaming and probably a major reason why the company has agreed to limit some content of premium-only subscribers.
At Canadian Music Week this morning, Borchetta talked a lot more about streaming music and whether it can make sense for artists, labels, and other groups like producers and songwriters. But he also popped the bubble on streaming’s success so far.
Here’s the back-and-forth.
Alan Cross (Interviewer): “Let’s talk about Spotify. Streaming music is here to stay, I think we have seen that all the major labels are experiencing more revenue from streaming than they are from physical sales now —”
Scott Borchetta: “So let’s pause right there. Because that’s not true, yet.”
Cross: “Oh, ok.”
Borchetta: “So there are a couple of artists who are completely over-performing right now. So if you look at how amazing Drake is doing on streaming. The Weekend, Ed Sheeran, etc. Those [artists] are so far ahead of the rest of the industry — so, when you say ‘album equivalent’ — ‘streaming equivalent album,’ ‘track equivalent album.’ Does everyone know what a ‘streaming equivalent’ is? If you don’t raise your hand [smattering of hands raised].
“Okay, so, basically it says that 1,500 spins is equal to one album, right? So, because it’s a sliding scale on the rates, we’re not getting paid the same amount.
“So then they say, ‘hey, ‘we’re up in the number of ‘X”. But it hasn’t worked its way down to the median yet.”
“So as far as the ones that are super-performing, Drake and Ed and they’re doing really well. The rest of the world will catch up.
“Ya know, in Nashville, where I’ve been all over Apple and Spotify and Amazon about is — the battle of Nashville has not even started yet. So get down there and start investing. Because when middle America catches up with streaming, then there will be the coming revolution.
“But let’s not forget, Spotify isn’t profitable yet.”
“So I think we should be really specific and careful, and make sure — because I agree with you 100%. The genie is out of the bottle and she’s not going back in. So we have got to make premium subscription services work, period, the end. But that means we need a healthy Spotify.
“Is there mission to be an IPO, or is there a mission to be a profitable company? Well you know what? We need them to be a profitable company.”
“Apple, thank God they are investing in music. Amazon same thing.
“So streaming absolutely is the future, but let’s not forget — and you know I literally wear it on my sleeve as you see there and see right here. Music has value. I find that anything that we pay for we value more.
“So I think that everybody should be on a premium service of some sort.”
At least one mega star team is sober about UMG invented music hunger games! Subs from all inclusive streaming and YouTube/Vevo ads around free KILL $300B of music goodwill obvious to IMBECILE.
Conclusion of Rio Caraeff ‘sand Francis Keeling’s (both gone from UMG) crated or endorsed to life SUICIDAL business models will be $25B music TOMB in 2025!
1999 CDs = today $58B
Fire all nerds at the labels, RIAA and IFPI now!
Headlines that are disconnected from not only the article but reality.
For massive modern blockbuster artists/records (i.e. Ed Sheeran,
Taylor Swift etc..), big back-catalog records (i.e. Led Zep, Bowie, Beatles, TRex, Fleetwood Mac, Eagles etc..) and big TV personality artists there still remains a market for CD’s and in some cases Vinyl.
But I think it’s a bit of a fallacy to conclude that CD’s and Vinyl are still viable on a general basis, especially in today’s predominately singles driven business . The input costs and distribution
issues to make it a non-loss-maker are tricky.
however, for a big artist, vinyl can serve as a valuable promotion tool and it doesn’t matter too much if it is a loss-maker in itself because it serves a parallel purpose in promotion and helps also to add an element of prestige to the artist.
So a big budget artist spend may include a fancy video promo clip,
a vinyl with full color printed jacket release, CD release plus available over the streaming and downloads platforms.
Throw in a multi-state concert tour and you have the full package..
Having the vinyl release only adds a few extra thousand to the
budget and for a big budget artist that’s not a lot.