Five Reasons Why Taylor Swift Is Wrong About Spotify

A lot of attention has been given over the past few days to Taylor Swift's decision to pull all of her tracks from the streaming music service Spotify. The decision has been hailed by people who don't like Spotify and used by critics of streaming services in general as another example of the small amount of money they say songwriters and musicians make from streaming.

But as is often the case, the easy headlines don't really tell the whole story. Here are five other things to think about when reading stories about Taylor Swift and whether the streaming music industry is in trouble:

1) Taylor Swift Pulling Her Music From Spotify Is About Money, But Not The Way You Think:

In a new interview with US Magazine, Swift argues that music shouldn't be free and that her decision to pull her songs is less about the money than it is about the art. But what she doesn't say in the interview is that she isn't opposed to streaming music. She just doesn't think she is getting enough revenue under the current system. At several points in recent years, Taylor's label has threatened to pull Swift's music unless it was only available to "premium" members who pay a monthly subscription fee. Oh, and Ms. Swift would like a higher rate per stream than most other artists, thank you very much. So it's pretty clear Swift would agree to streaming her music, if the price was right.

2) Streaming Isn't The Same As Buying A Track

When musicians and songwriters complain about the royalties they receive from streaming services, they always seem to make the comparison between streaming royalty rates and those they receive from iTunes. Which is roughly similar to comparing the amount of money they receive from iTunes vs. the music licensed by bars and restaurants. Streaming is no different than radio or any other use that doesn't allow ownership. I can stream music from Spotify only as long as I am a member. And even if I am a premium member, I can only download the music as long as I am an active Spotify subscriber. Musicians should be getting less streaming than from a music download. The two have very different value propositions for consumers.

3) Taylor Swift Pulled Her Music From Spotify Because She Can

Swift is one of the few current musicians with a strong enough fanbase that she can afford to ignore Spotify. She knows that her fans will buy the CD, in the same way that Garth Brooks can keep his tracks off of digital services and still sell a new repackaging of his music in CD form every few years. But let's not confuse what Swift or Brooks or Beyonce can do with the norm in the music business.

4) I Won't Say That Taylor Swift Is Greedy...But She And Her Management Are Aggressive

Since the beginnings of commercial radio, music has been played on radio stations without musicians getting paid royalties. Songwriters and publishers received payments, which is why so many musicians who sold off their publishing rights don't receive any money when their one hit gets played on every classic rock station in the world. Taylor Swift's label Big Machine changed that equation in 2012 when they persuaded radio giant Clear Channel to pay royalties to the musician every time a track is played on one of their many hundreds of stations.

It certainly was a win for Swift and somewhat for Clear Channel, which got special access to Swift as part of the deal. But it's a terrible deal for up-and-coming artists on the label as well listeners who enjoy wider radio playlists. If paying to play a track becomes the industry norm, stations are rightfully going to stick with songs they know will work. Which means, apparently, more Taylor Swift and less of that quirky indie-pop singer that doesn't have a few millions fans quite yet.

5) A Lot Of Problems With Streaming Music Payments Can Be Traced Back To The Labels

One of the many bad consequences of the consolidation of the music industry down to just three major labels is that any company that wants to license music has to nail down deals with all three labels. Which typically means giving up equity and not complaining too much about the way the labels allocate the money they get from streaming. Streaming music services are a huge part of the revenue stream for labels and thanks to bookkeeping methods that can best be described as "imaginative," they keep most of it. Spotify is correct when it claims that 70% of their revenue is paid to the musicians. Unfortunately for your favorite singer, much of that money doesn't make it out of the label's bank account to the people who created the music.

The streaming music business isn't perfect. But anyone who thinks that consumers are going to go back to purchasing large amounts of CDs or give up streaming their music is living in a dreamworld. Yes, the digital world is complicated and it's not always fair. But it is reality and the music industry needs to accept that.

No matter what Taylor Swift might do.