$2 Billion and Counting

- A blog post written by Daniel Ek (@eldsjal)

Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it. So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time. Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work. Quincy Jones posted on Facebook that “Spotify is not the enemy; piracy is the enemy”. You know why? Two numbers: Zero and Two Billion. Piracy doesn’t pay artists a penny – nothing, zilch, zero. Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists. A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then. And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away.

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. The music industry is changing – and we’re proud of our part in that change – but lots of problems that have plagued the industry since its inception continue to exist. As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem. We will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as a leader in this industry; and it’s the right thing to do.

We’re trying to build a new music economy that works for artists in a way the music industry never has before. And it is working – Spotify is the single biggest driver of growth in the music industry, the number one source of increasing revenue, and the first or second biggest source of overall music revenue in many places. Those are facts. But there are at least three big misconceptions out there about how we work, how much we pay, and what we mean for the future of music and the artists who create it. Let’s take a look at them.

Myth number one: free music for fans means artists don’t get paid. On Spotify, nothing could be further from the truth. Not all free music is created equal – on Spotify, free music is supported by ads, and we pay for every play. Until we launched Spotify, there were two economic models for streaming services: all free or all paid, never together, and both models had a fatal flaw. The paid-only services never took off (despite spending hundreds of millions of dollars on marketing), because users were being asked to pay for something that they were already getting for free on piracy sites. The free services, which scaled massively, paid next to nothing back to artists and labels, and were often just a step away from piracy, implemented without regard to licensing, and they offered no path to convert all their free users into paying customers. Paid provided monetization without scale, free reached scale without monetization, and neither produced anywhere near enough money to replace the ongoing decline in music industry revenue.

We had a different idea. We believed that a blended option – or ‘freemium’ model – would build scale and monetization together, ultimately creating a new music economy that gives fans access to the music they love and pays artists fairly for their amazing work. Why link free and paid? Because the hardest thing about selling a music subscription is that most of our competition comes from the tons of free music available just about everywhere. Today, people listen to music in a wide variety of ways, but by far the three most popular ways are radio, YouTube, and piracy – all free. Here’s the overwhelming, undeniable, inescapable bottom line: the vast majority of music listening is unpaid. If we want to drive people to pay for music, we have to compete with free to get their attention in the first place.

So our theory was simple – offer a terrific free tier, supported by advertising, as a starting point to attract fans and get them in the door. And unlike other free music options – from piracy to YouTube to SoundCloud – we pay artists and rights holders every time a song is played on our free service. But it’s not as flexible or uninterrupted as Premium. If you’ve ever used Spotify’s free service on mobile, you know what I mean – just like radio, you can pick the kind of music you want to hear but can’t control the specific song that’s being played, or what gets played next, and you have to listen to ads. We believed that as fans invested in Spotify with time, listening to their favorite music, discovering new music and sharing it with their friends, they would eventually want the full freedom offered by our premium tier, and they’d be willing to pay for it.

We were right. Our free service drives our paid service. Today we have more than 50 million active users of whom 12.5 million are subscribers each paying $120 per year. That’s three times more than the average paying music consumer spent in the past. What’s more, the majority of these paying users are under the age of 27, fans who grew up with piracy and never expected to pay for music. But here’s the key fact: more than 80% of our subscribers started as free users. If you take away only one thing, it should be this: No free, no paid, no two billion dollars.

Myth number two: Spotify pays, but it pays so little per play nobody could ever earn a living from it. First of all, let’s be clear about what a single stream – or listen – is: it’s one person playing one song one time. So people throw around a lot of stream counts that seem big and then tell you they’re associated with payouts that sound small. But let’s look at what those counts really represent. If a song has been listened to 500 thousand times on Spotify, that’s the same as it having been played one time on a U.S. radio station with a moderate sized audience of 500 thousand people. Which would pay the recording artist precisely … nothing at all. But the equivalent of that one play and its 500 thousand listens on Spotify would pay out between three and four thousand dollars. The Spotify equivalent of ten plays on that radio station – once a day for a week and a half – would be worth thirty to forty thousand dollars.

Now, let’s look at a hit single, say Hozier’s ‘Take Me To Church’. In the months since that song was released, it’s been listened to enough times to generate hundreds of thousands of dollars for his label and publisher. At our current size, payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that’s only growing – we expect that number to double again in a year. Any way you cut it, one thing is clear – we’re paying an enormous amount of money to labels and publishers for distribution to artists and songwriters, and significantly more than any other streaming service.

Myth number three: Spotify hurts sales, both download and physical. This is classic correlation without causation – people see that downloads are down and streaming is up, so they assume the latter is causing the former. Except the whole correlation falls apart when you realize a simple fact: downloads are dropping just as quickly in markets where Spotify doesn’t exist. Canada is a great example, because it has a mature music market very similar to the US. Spotify launched in Canada a few weeks ago. In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else. If Spotify is cannibalising downloads, who’s cannibalising Canada?

By the same token, we’ve got a great list of artists who promoted their new releases on Spotify and had terrific sales and lots of streaming too – like Ed Sheeran, Ariana Grande, Lana Del Rey and alt-J. Artists from Daft Punk to Calvin Harris to Eminem had number ones and were on Spotify at the same time too.

Which brings us back to Taylor Swift. She sold more than 1.2 million copies of 1989 in the US in its first week, and that’s awesome. We hope she sells a lot more because she’s an exceptional artist producing great music. In the old days, multiple artists sold multiple millions every year. That just doesn’t happen any more; people’s listening habits have changed – and they’re not going to change back. You can’t look at Spotify in isolation – even though Taylor can pull her music off Spotify (where we license and pay for every song we’ve ever played), her songs are all over services and sites like YouTube and Soundcloud, where people can listen all they want for free. To say nothing of the fans who will just turn back to pirate services like Grooveshark. And sure enough, if you looked at the top spot on The Pirate Bay last week, there was 1989

Here’s the thing I really want artists to understand: Our interests are totally aligned with yours. Even if you don’t believe that’s our goal, look at our business. Our whole business is to maximize the value of your music. We don’t use music to drive sales of hardware or software. We use music to get people to pay for music. The more we grow, the more we’ll pay you. We’re going to be transparent about it all the way through. And we have a big team of your fellow artists here because if you think we haven’t done well enough, we want to know, and we want to do better. None of that is ever going to change.

We’re getting fans to pay for music again. We’re connecting artists to fans they would never have otherwise found, and we’re paying them for every single listen. We’re not just streaming, we’re mainstreaming now, and that’s good for music makers and music lovers around the world.  

Olá, Brasil! Spotify here.

Brasil

We are thrilled to announce that as of today, Spotify is available to everyone in Brazil. Your friends in Brazil can now join the 40 million people around the world who are enjoying a new way of listening to music.

Spotify is now available in 57 markets worldwide! That means it is easier than ever to share music with your friends around the world, as well as discover more global music than ever.

Know someone in Brazil? Send them a song today!

Listen for the first time to Johnny Cash’s long lost album – ‘Out Among The Stars’

Out Among The Stars

Throughout his five decades in music, Johnny Cash was very strict in his dedication to both sound and style. He always knew exactly what he wanted to do and exactly how it should appear – that dedication meant all the music he created was definitively Johnny Cash music.

However, by 1980, Cash felt that country music had evolved and incorporated sounds that ran against his personal signature. Put simply, his blend of folk and that rolling, “boom-chicka-boom” beat was out of vogue amongst the growing wave of “country-politan” musicians that were becoming increasingly popular. So, in an effort to grow his technique, Cash started recording sessions with people who were enjoying major success with this new country sound. First up, he employed an expanded band, featuring a young Marty Stuart on guitar and fiddle, as well as long-time duet partners June Carter Cash and Waylon Jennings, but much of what was recorded on those sessions was locked away. Over the years almost everything was lost, destined never to be heard again.

Until today.

http://open.spotify.com/album/33jUyJOx4j6BWJ7VkzWoth

Discovered in 2012, Out Among The Stars is truly a lost, previously unreleased Johnny Cash album. These aren’t alternate takes or different versions of songs that you’ve heard. These are brand new songs to the Cash canon.

Completed in 2013 by Johnny’s only son John Carter Cash, this is a pivotal Johnny Cash album and only now is it ready to be enjoyed by everyone – because The Man in Black is back.

 

 

Which playlist reflects your relationship status?

We’ve created 5 different playlists that fit 5 different types of relationship status. Take this test to find out the playlist that suits yours.


 

Meet Peter – one of our community’s Rock Stars

Peter+Daniel(1)Have you ever wished you could reach out to an expert with questions about Spotify? The Spotify Community has your man.

A few months ago, we were incredibly happy to have our top community Super User, Peter Doggart from the UK, visit our headquarters in Stockholm. Peter alone is responsible for answering almost 30,000 questions for customers in our community! Peter received a tour of HQ, a day trip around Stockholm, and one-on-one time with Daniel, Martin and several top members of our organization. He was thrilled to be there and so appreciative of the opportunity to really get to know the Spotify team!

When asked why he helps out in the community so much here’s what he said:

What was the first time you came to the community like?

“I am almost certain I came to the community like the majority of current Spotify customers, looking for some help. Even now as a Super User, we need help with new features on occasion, but we are the lucky ones who can bug the staff team directly for answers! Whilst I was on the community myself, I noticed a topic from another community member which I could answer, so I did! The rest is history.”

Why did you keep participating in the community?

“I know music is an important part of peoples’ daily lives, knowing that I have helped someone overcome an issue which means they can enjoy their music, or anyone who says thank you for helping, those are the people who make me smile and make what I do worthwhile.”

Peter_Martin(1)

What was the best part of your journey to Stockholm?

“The best part of my trip was definitely meeting the people who live and breath Spotify. I have never been in an organization where I have seen so much passion and energy from the people before. It was really a dream come true to meet the founders of the company, as well as the product teams and of course to finally meet the wonderful community team I interact with daily. I feel like I am even more part of the Spotify family now!”

To find out more about how to contribute to the community and earn rewards, check out our new Spotify Rock Star Program.

 

No more time limits on Spotify – #freeyourmusic

No More Limits

In case you missed the news, you can now get Spotify on your mobile or tablet, absolutely free. Find the right music and shuffle play it on any iOS or Android device.

But what about listening to music on your computer – with no time restrictions?

In the past, we had to restrict your listening time to some hours a month once a 6-month unlimited grace period had passed. But now, if you haven’t noticed, there’s no more time limit if you are using Spotify for free. We have removed these caps completely across all platforms – you can listen to your favourite songs as many times as you like, for as long as you want.

That’s right, no more time limits.

Music makes you happy – why limit your happiness? #FreeYourMusic

New tools for artists on Spotify

We believe that giving artists more access to data gives them more power over their careers. So today we’re presenting a new set of tools to be as transparent as possible with the artist community.

Spotify Artists

Presenting spotifyartists.com

This new site offers guidelines for artists and managers on how to get the most out of Spotify. We also explain our business model in detail – with specific numbers and equations used to calculate monthly payments to rights holders. We are disclosing an average per stream rate as well as a detailed equation on how artists are paid.

Introducing Artists Dashboards

Verified artists and managers will able to access a dashboard we’re launching in partnership with Next Big Sound. The free dashboard gives real time access to loads of Spotify streaming data relating to their music.

Pre-registration begins this week and we will begin rolling out access to authorized artists in the coming weeks.

Buy Concert Tickets and Merchandise on Spotify

We will enable artists to start selling concert tickets and merchandise within Spotify. We are rolling out concert listings on the Discover and artist pages where you can already buy tickets immediately through Songkick. Over the next few months we will be rolling out merchandise listings.

@SpotifyArtists on Twitter

Our Artists Services team is available to speak directly to artists and managers who may have more questions. They can be reached on our new Twitter handle @spotifyartists or on spotifyartists.com

 

September Beats presented by @thursplay

6:27 imageHere’s what you’ll listen to on this September Beats by our friends at @thursplay :

Closing the month of September with 15 awesome hand picked songs on September Beats by @thursplay [2013]: listen to Postiljonen with their very cathy and smooth “Supreme” followed by Black Light Dinner Party’s great song “We are Golden”. The amazing canadian pop band Stars has new music out, check out “Wishful” and the very soulful Eliza Doolittle singing “Big When I Was Little” from the Spotify London office!

What else? Oh yeah, listen to brand new music from Canadian indie rock band Arcade Fire with “Reflektor”, with her ever so smooth sound in her new single “Shadows” is Swedish singer Big Fox and also Swedish singer Laleh with “Colors”.

Still on this playlist: Colours in the Streets, Andrew Belle, CHVRCHES and more!

What were your favorite releases during September?

Share them with us today on Twitter and Facebook using the hashtag #thursplay.

June Beats presented by @thursplay

thursplay

Here’s what you’ll listen to on this June Beats by our friends at @thursplay :

Closing the month of June with 15 awesome hand picked songs on June Beats by @thursplay [2013]: listen to Kisses with their very catchy “Funny Heartbeat”, Husky Rescue has new music out, check out “Treehouse”! Also with new music is Swedish group Club 8, listen to “Into Air” from their latest album “Above the City”.

What else? Oh yeah, listen to brand new music from American indie rock band The National with “Don’t Swallow the Cap”, Rhye with their ever so smooth sound with the song “Last Dance”, British singer Sivu with “Better Man than He” and Vampire Weekend with “Unbelievers”.

Still on this playlist: When Saints Go Machine, She & Him, Laura Marling and a beautiful song by David Lynch & Lykke Li.

What were your favorite releases during June?

Share them with us today on Twitter and Facebook using the hashtag #thursplay.