Taylor Swift and The Economics of Pop Music

Taylor Swift Magazine Covers - Businessweek and Time

Taylor Swift is currently on the covers of both Time and Businessweek. Over the summer, she had an op-ed featured in the Wall Street Journal. Impressive for a 24 year-old, more so for a female pop artist. A few weeks ago, Swift pulled her catalog from the online streaming service Spotify, saying she didn’t want to put her life’s work at risk in service of “an experiment.” Now millionaire rock star Dave Grohl has weighed in, saying he “doesn’t fucking care” and that musicians should give their music away to get it heard. Unless the band is U2, and it tries to give its music away to Apple customers (Bono apologized.) So there.

I don’t think Swift is wrong, even if her WSJ editorial was naive (many thought so) and overly earnest. Spotify is an experiment, arguably a necessary one. It allows listeners to stream music (download but not save) to their computers, phones and other portable devices. It’s like a radio station where you pick every song. Spotify pays artists between $.006 and $.0084 per song streamed. Some argue the minuscule amount is better than nothing, because after all, people are going to download music one way or another.

Music piracy has never been easier. Bit torrent is an insidious technology that allows media to be shared by Internet-connected peers (computers, phones and other devices). If I have a copy of Taylor Swift’s latest album, I can start my bit torrent program and share it with anybody else using compatible software. If I stop sharing my copy, or if authorities seize my computer, the album will still be available from somebody else. This kind of stealing is winked at by most people I know. I went to church with somebody who bragged about downloading thousands of Christian songs for nothing: “If I’d bought them from iTunes, it would have cost me a lot of money.” Well, yeah.

I’ve read arguments that Taylor Swift is hurting smaller artists by pulling out of Spotify. The logic is that Spotify needs to have as many big names as possible in order to be viable (Steve Jobs felt the same when Apple started iTunes.) If Swift won’t play, other big artists might follow suit, and pretty soon Spotify will be a niche product, and won’t ever increase royalty payments from their current fraction of a penny. If Spotify goes out of business (some argue), smaller artists will lose valuable exposure.

I’ve also read that Swift is hurting herself, because while she might have earned pocket change from Spotify, now she’s angering fans who might not come see her in person (tours are where the big money is.) And those fans are now pirating their Taylor Swift albums via bit torrent.

Most commentary seems to be concerned about whether Taylor Swift is hurting her own sales, or hurting everyone else’s. Not many are discussing the merit of her points. In her WSJ piece, Swift wrote:

“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, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.”

Setting aside the notion that Taylor Swift’s music is important or rare (I like what she does, but those aren’t the adjectives I’d choose), she made a statement and backed it up by taking her music off Spotify. She decided that Spotify’s business model didn’t value her enough, and it catered to others who don’t value her, either. The question isn’t “will this hurt her,” because she’s clearly saying she’s already unhappy with how things are. (How dare she?) It’s significant that one of the world’s biggest pop stars is making these waves, because let’s face it – there aren’t many who command this kind of attention. She’s right. “What I do is valuable and I insist that others value it too.” It’s almost subversive. I wish her well.