Taylor Swift exercised her right to pull her entire album catalogue from Spotify earlier this month, but Spotify CEO Daniel Ek wants Swift to know she may have made a huge financial mistake.
"Payouts for a top artist like Taylor Swift (before she pulled her catalogue) are on track to exceed $6 million a year, and that's only growing - we expect that number to double again in a year," Ek wrote in a lengthy blog post.
The "Shake It Off" singer told Yahoo Music that she wasn't "willing to contribute [her] life's work to an experiment" that she felt doesn't fairly compensate writers, producers and artists in the music industry. Nearly 1.3 million people bought her new album "1989" in its first week on sale.
Ek argued his service has paid more than $2 billion to "labels, publishers and collecting societies for distribution to songwriters and recording artists," which is compensation artists would never have seen from the countless piracy sites distributing their music for free.
"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," the Spotify co-founder wrote. "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."
Spotify business model combines ad-sponsored listening and paid subscriptions. The service has more than 50 million active users and a quarter of them are subscribers paying $120 per years to listen ad-free, plus access Spotify's library offline. Many of those subscribers come from a generation that grew up with easy access to pirate website.
"Here's the key fact: more than 80 percent 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," Ek wrote.
In the nearly 1,800 word blog post, Ek aimed to debunk three "myths" about his music streaming service, addressing artist compensation, how much Spotify pays out, and the correlation between decreased music sales (downloads and physical copies) and increased streaming.
Legal music downloads in Canada, which up until a few weeks ago didn't have Spotify, dropped just as quickly as those downloads in music markets with Spotify. The music service also has artists promoting their music on Spotify, including Ed Sheeran, Ariana Grande, Lana Del Rey and alt-J.
Whether Ek's response and the $6 million prediction will convince Swift to return to Spotify is still anyone's guess. The artist has made no public statement on the Spotify post.
