1000 words research essay

Royalties vs. Spotify

Student Name

Idaho State University

Royalties vs. Spotify

We live in a world where music provides not only enjoyment, but controversy as well. People are continuously downloading, sharing, and pirating music illegally. Pandora, Soundcloud, iTunes, and Spotify are just a few of many organizations that are helping to decrease the pandemic by paying the artists in royalties when listeners download or play their songs. However, many artists are still unsatisfied with the money they receive and demand a higher compensation; particularly from Spotify. Although Spotify doesn’t pay as well as many other organizations, that doesn’t mean the artists are getting ripped off. Song artists should not receive any additional royalty compensation through Spotify because they make enough money already, their talent is still being recognized, and the system is contributing to the prevention of piracy.

Song artists make more money than the majority of people could even dream of. According to Financial Samurai, the average American makes approximately 48,000 dollars a year (“How much money”, 2013, para. 1). While the average American is making less than $50,000 a year, song artists continuously make millions of dollars every day. Shockingly, money is still an issue for some successful artists. After Taylor Swift withdrew her music from Spotify due to low compensation, she told Rolling Stone, “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free” (as cited in Grow, 2014, para. 2). Swift’s argument against Spotify is invalid considering the fact that the music being played is not free; artists are paid in royalties. According to Business Insider, Taylor Swift’s record label said she earned approximately 500,000 dollars within 12 months (Engel, 2014, para. 12). If Swift wants money for her art, then she should leave her music on Spotify because not only is it an effective way of preventing piracy, but she is also earning more in a year than almost 11 times the average American.

The royalties that Spotify pays artists seems like nothing when you just look at the small figure that is paid for each time a song is played. However, those numbers add up when you think about all of the listeners and how many times a song is played. Business Insider states, “Each time Spotify plays a song, your favorite singer or band gets as little as 0.6 cents” (as cited in Edwards, 2013, para. 2). Shortly after the negative comment, Business Insider came back to say, “But before you get angry at the fantastically tiny amount of cash that bands get for each song, remember that those fractions of pennies add up” (para. 4). Instead of looking at the low compensation they receive from one song play, they should realize how much money they are making in the long run. Song artists make money for their music every single day and Spotify is only contributing to their wealth. It is understandable to think you are getting ripped off for your art work when you hear 0.6 cents, but with how many times one song is played, the number won’t seem so small.

When compared to Pandora, iTunes, and Google Play, Spotify is a fairly new music site where people can legally listen to songs by their favorite artists. It takes time for people to hear about a new trend, and therefore it takes longer for people to participate. Spotify is continuing to see a growth in listeners which means that artists’ compensation rates will only increase with time. “We have succeeded in growing revenues for artists and labels in every country where we operate, and have now paid out over $2 Billion USD in royalties to-date . . . as we continue to grow we expect that we will generate many billions more in royalties” (“How is Spotify”, 2013, para. 3). Being patient and waiting for Spotify to grow is very important for artists to do. If song artists leave the site now because they feel like they are not making enough, they might regret it when they notice the growth and increased royalties in the future. However, they make enough money already and don’t need to be upset about the hundreds of thousands of dollars they are currently receiving from the site.

One of Taylor Swift’s complaints about Spotify is that her talent isn’t being recognized. Spotify lists the artist’s name and album meaning that they are getting the credit they deserve. With the skyrocketing growth of the site, more listeners are discovering new artists every single day. Spotify’s CEO, Jonathan Price, explained that "Our users, both free and paid, have grown by more than 50 percent in the last year, which means that the run rate for artists of every level of popularity keeps climbing” (as cited in Engel, 2014, para. 12). Price is saying that with the growth in Spotify, every artist’s songs are being played more and more. The only reason that people would listen to a certain song is because they enjoy it, which means they most likely prefer the artist that produced the song. Clearly, artists are being recognized for their talent because fans are continuing to add them to their playlist.

The issue some artists may have is whether or not Spotify truly cares about their artwork, not just the recognition from fans. The main purpose of the system is to decrease piracy rates and help artists gain recognition for their music. Co-founder of Spotify, Daniel Ek (2014) 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” (Ek, 2014, para. 1). Ek acknowledges artists’ music by saying “amazing work”, this proves that Spotify is recognizing the beautiful talent that each and every musician possesses. Spotify cares about protecting artists and helps fans to listen to their favorite songs in a way that allows rights holders to receive compensation.

Piracy is something that has been a problem around the world for many years. There has not yet been a successful way of eliminating the crime, however there are ways of reducing the temptation. If people can’t listen to a song on their favorite music service, they might just download it illegally from an app or online source and the artist will not receive any compensation. Spotify gives fans a free alternative to enjoy their favorite songs while paying the artists royalties, hoping to decrease piracy rates. According to New York Daily News, “Daniel Ek said he co-founded the platform to protect artists from piracy” (as stated in Sacks, 2014, para. 2). It is clear that Daniel Ek cares about the music industry and wants there to be a change in the illegal activity.

Artists can either keep their music on Spotify and have a better chance of decreasing piracy, or remove it and increase the chance of receiving no compensation from other sources. With how much a single CD is today, our generation would much rather listen to their favorite songs for free and they are either going to do so illegally or legally. “Unfortunately, the majority of music consumption today generates little to no money for artists. We are working hard to fix this, and are proud to offer music fans a legal and paid service capable of generating for artists the royalties that they deserve.” (“How is Spotify”, 2013, para. 1). Not every music source is generous enough to care about the royalties artists should earn, but Spotify does. Any system that pays artists royalties for their work is benefiting the music industry whether they notice it or not. It is true that Spotify doesn’t pay artists a fortune per song that is played, but at least they are receiving money unlike if people pirated their music instead. Fortunately enough for the artists, the system is contributing to the prevention of piracy.

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