Spotify: Helping or hurting?

Spotify. Who ever created this wonderful app (thank you, Daniel Ek and Martin Lorentzon) is a genius!  You can listen to (almost) any artist you could ever want for free and they still get a commission off your listens.

So, Is Spotify shrinking the music business, by giving people a good reason not to buy music anymore?

Or is Spotify helping the music business, by giving people a good reason not to steal music anymore?

Yes!

That’s what a study by the National Bureau of Economic Research says, at least. Their scientists found that yes, Spotify stops people from buying permanent downloads from iTunes or other music sites, but it also does the same to piracy. And the two trends balance each other out: “Interactive streaming appears to be revenue-neutral for the recorded music industry.”

The nice thing about this study is that is backs up the arguments that Spotify has been using to defend itself for the past few years. Their argument is that if you don’t let them distribute your music, and get some money for it, then the pirates will do it and you’ll get none. But the study negates the music labels’ argument that because of Spotify, they won’t sell enough albums and singles!

So why are artist still so upset about the public being able to listen to their music for free?

We live in a society where people pay for works of art, for books, for sculpture, for craftsmanship on Etsy—all of that is worth money to them. People generally understand it takes months of work to make things, and artists and authors somehow should be compensated for that. So why do so many think that doesn’t apply to music, and that they’re entitled to it for free? When people are taking something, generally that means they want it. Why is $4 for a Frappuccino okay, but not 99 cents for a song you can listen to as many times as you want from the cloud?

In addition, people pay for art and often only think about the artist. What they don’t think about is the engineer, the backup singer on track seven, or the artwork designer. The money isn’t all going to the artist. Beyoncé may not need your 99 cents, but all those other people do. Major labels are one thing, but with a straight-up indie project, very few people are making stuff that involves no one else’s labor whatsoever.

Yet everyone hates musicians who complain about giving away their music. People hate the famous ones because it looks like an unnecessary money grab, since they’re making so much money from touring, and the same people hate the not-famous ones because, hey, they’re not famous, so they must suck. Musicians are villified when they express frustration with the current system. Many are afraid of the backlash; there’s a culture of fear around this. Anonymous commenters on the Internet can be incredibly self-righteous about what they’re entitled to have for free.

Maybe the bar was set back when Napster first came out and everyone began downloading music for free. That was when none of the labels had an answer for digital music, aside from horrendous DRM-ridden software and suing everyone they could find. But just because people decided not to pay for music doesn’t mean it lacks inherent value. Free sites are free because they’re ad-supported and because your data is valuable to marketers. With digital music, there’s literally nothing, aside from the recording; people just take it.

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The first week of sales for Swift’s album 1989—1.3 million, or more than any other album in a week since The Eminem Show in 2002—underscores her point in pulling her music from Spotify. It shows that people are still willing to pay for music, given the right incentive.

I don’t know how sustainable that is going forward. I wish I had the answer here. And even though the poor college kid in me loves Spotify and not having to pay to listen, the idea of recorded music being free will never sit well.

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