What the Taylor Swift breakup means for Spotify’s future

If you only read Spotify’s statement on the matter, you’d think Taylor Swift pulling her catalog from the streaming site is a colossal strike to its otherwise impenetrable success. The post reeks of desperation, even promoting the optimistically-titled playlist “What To Play While Taylor’s Away.” In their address to the singer, Spotify goes so far as to quote Taylor to Taylor: “We were both young when we first saw you, but now there’s more than 40 million of us who want you to stay, stay, stay. It’s a love story, baby, just say Yes.”

However, one struggles to see how Swift pulling her music is an oversized threat to Spotify or streaming as an industry. Like any content provider, Spotify, Pandora, and others are beholden to the content creators that make its service useful. But what’s possible for Swift is likely not possible for the rest of the music business. Album sales continue to tank overall, and Taylor Swift’s success does not mean the industry can quit services like Spotify just yet.

Swift, like Metallica before her, is abandoning the future of music in favor of dying business models. While her new album, 1989, sold over a million copies in a week (breaking Britney Spears’ record for a female solo artist, one set by 2000’s Oops I Did It Again), it was the first album to do so this year. Artists and labels who point to her success as proof that traditional models can work do so at their own folly.

Streaming, combined with heavy touring, is the new financial model for artists who want to build the kind of massive fanbase Swift has earned. Through several happy coincidences of demographics and Swift’s intense marketing of herself, she is in a better position than arguably any other artist to abandon this doctrine while retaining such levels of success, but she’s a statistical outlier in a struggling industry.

To understand who’s buying Swift’s music (as opposed to streaming with a subscription), we need to take a look at who’s buying music at all. The largest demographic still purchasing CDs today is the over 40 market, hence the high numbers achieved by packages from Michael Buble, Rod Stewart, and other dull, adult-alternative fare.

While Swift might be denouncing her younger fans with this recent move, she’s also betting on those older fans that still buy physical music. Taylor Swift has some of the deepest penetration among music consumers over 50 of any modern pop artist—running second only to Bruno Mars—and it is no mistake those people are the last to move away from purchasing music.

Swift started in the country scene, the only end of the charts that still relies on CD sales. If we look at the top albums sold in 2013, for example, we see very different results between digital and physical sales. In the top 10 digital sales, we see zero country acts, but in the top ten CD sales, there are four—five if we count the Duck Dynasty Christmas album Duck The Halls.

Thus, Taylor Swift already starts with a huge demographic boost from middle-age country fans who never escaped their Discman glory days. To them, whether they can access her music on Spotify is pointless.

But what about that huge chunk of her fan base that is moving to streaming? The highest demographics for streaming online music are twenty-somethings and teenagers, with one in two teens streaming—not downloading or direct purchasing—all of their music. As Spotify pointed out in their statement, over 16 million Swift fans used Spotify to enjoy her music in the past year alone. Like any good artist or any good marketing campaign, shouldn’t she be where her fans are?

In fact, it could be said this is the absolute worst moment for Swift to deny her fans, as she’s hardly surging through the marketplace. If we look at Swift’s growth from one release to the next, it could almost be said she’s plateauing. Her first album’s best week saw 187,000 sold, while her second saw 592,000—a difference of 405,000 copies sold. Her third, the blockbuster Speak Now, sold over 1 million copies in its first week, almost double her previous album. Compared to the massive deviation between those albums, the jump from Red (with 1.2 million copies) to 1989 (1.3 million) is paltry at best.

And this is with the help of some of the most aggressive marketing campaigns in the music business. With Taylor Swift’s last release, 2012’s Red, you could almost end up buying the album on accident. Red was sponsored by a variety of brands—including Keds and Targetand was even bundled with a single-topping large pizza at any Papa John’s location.

With her most recent release, 1989, Taylor Swift has been a marketing juggernaut, both online and off, creating numerous viral campaigns (such as #taylurking) and happily pushing products from Subway sandwiches to Diet Coke to the essence of being a New Yorker.

These two factors—her appeal to demographics that still purchase music and her persistent marketingmake Swift particularly untouchable by any streaming service. She has no need to be reliant upon Spotify when she’s already one of the most popular acts amongst the CD-buying market, and whatever fan attention she loses from ditching Spotify can be made up in endless, tireless marketing.

Except that not everyone else has that privilege. Because of her endeavor to be everywhere at all times, Swift has run out of uses for streaming, which, as Motherboard writes, is mostly good for “exposure.” The money artists earn per listen on Spotify is famously tiny, meaning all Spotify gives Taylor Swift is two things of which she already has plenty: ears and dollars.

That is not the case for most acts. The most popular ways for teens to find new music are YouTube (which will soon unveil its own streaming subscription plans) and Spotify, meaning an artist might as well be nonexistent if they don’t have a heavy online presence. Of course, that’s been true since MySpace. But with music sales dipping further every year, it’s hard to see how anyone could take Taylor Swift’s move as a serious bellwether for the industry as a whole.

Online streaming models are the doubtless new direction for the music industry. While online streams of music grew 32 percent from 2012 to 2013, digital sales shrunk by 6 percent and physical sales by 13 percent. The structures that allow Swift to break records are falling apart for the industry as a whole. Consider Taylor Swift not the hero of a new age for music distribution, but the last miner to grab her gold before the entire shaft collapses.  

Photo via dephisticate/Flickr (CC BY 2.0)

Gillian Branstetter

Gillian Branstetter

Gillian Branstetter is a reporter and essayist who specializes in the intersection of technology, LGBTQ issues, and privacy. In April 2018, she joined the National Center for Transgender Equality as a media relations manager.