Spotify: Is U.S. Launch Good for Artists?
On July 14, Swedish music streaming service Spotify made its U.S. debut. Will Americans grasp onto it as much as our mates across the pond have?
On Spotify’s “Hello America” welcome page, the company explains that users can have “any track, any time, anywhere. And it’s free!” The service includes creating and sharing playlists, searching through its 15 million tracklist catalogue, and even downloading Spotify as an app for your smart phone. An invite is needed in order to begin registration, but once started and after a six-month beginner period, free users have access to 10 hours of streaming per month and can listen to individual songs up to five times each. One adverse feature that comes with free access is advertisements. If a user signs up for the premium package starting at $4.99 a month, then there is no need for an invite or hesitation about being harassed by advertisements, because there are none.
Created in 2006, Spotify had 1.6 million users from only the seven European countries (Finland, France, the Netherlands, Norway, Spain, Sweden, UK) it was available in prior to its recent U.S. release. According to David Johnson from Business Insider, the United States’ 80 percent of labels get 2 billion dollars of its revenue from sales, as opposed to Sweden, which in only 20% of the country’s $38 million from digital revenue, a hefty 60% comes solely from streaming. If these numbers translate Stateside, the U.S. might be looking at streaming as the main moneymaker in the music industry.
Heliene Lindvall of The Guardian is skeptical that this change is for the better, at least where artists are concerned. She explains, “Indie labels only get a 50% share of ad revenue on a pro-rata basis.” With labels only getting 18% of the shares from online streaming, artists will hardly see that income.
Spotify has a chance to gain widespread popularity in the States if it unites with Facebook, as it is rumored. On Spotify’s homepage, there is a quote from Mark Zuckerberg saying, “Spotify is so good.” It certainly will be, for him at least, if the two do make a deal.
Spotify already has one million paid subscribers and undoubtedly is looking to become the top used streaming site in the world. One can only hope that WHEN, not IF, streaming is the top resource for listening pleasure, that artists, and not just their labels, are compensated fairly.