2013 proved that the revolution will be streamed—and Spotify is leading the way
“Streaming became currency” in 2013, Spotify’s Daniel Ek says.
Initially dismissed as inconsequential, Spotify royalties have become meaningful as consumers buy a little less and stream a lot more. “Daft Punk had a record-setting first week for their album on Spotify, but since then the album has been streamed over 300 million times worldwide,” Ek says of the French duo’s 2013 release, "Random Access Memories."
“Those are significant numbers.”
Spotify, the world’s biggest subscription service, paid out $500 million in 2013, has given rights holders $1 billion to date and counts 24 million users. But in today’s fast-changing music business, the mark of a disruptive leader isn’t dollars generated but the amount of criticism. The company spent much of 2013 defending both its business model (it hasn’t reached profitability) and artist payouts. The biggest hits came from Radiohead frontman Thom Yorke and producer Nigel Godrich, who ripped Spotify’s value to artists and removed their songs from the service.
“We learned that we need to operate with a new level of transparency when it comes to communicating with artists,” Ek says.
In December, Spotify launched Spotify for Artists, a website that provides a window into this new kind of business. Ek calls the issue of artist payments “a challenge,” but insists, “This is going to be an ongoing process that we are committed to,” he says.