It’s been about six months now since Swedish streaming music service Spotify launched in the U.S. to much fanfare. In recent months, however, the shine on Spotify’s nickel has dimmed, with reports that various musicians have been dissatisfied with the amount of royalties they’ve been receiving from Spotify, claims that the presence of a musician’s album on Spotify hurts record sales, and the reality that the six-month unlimited streaming deals upon which Spotify built its user base are now expiring.
But Daniel Ek, CEO of Spotify, calls shenanigans on that claim. In an interview with Grammy.com, Ek is quoted as saying, “There’s not a shred of data to suggest that. In fact, all the information available points to streaming services helping to drive sales.” The facts that Ek points to, however, seem a bit dubious. Firstly, the fact that record sales were up in 2011 in the U.S. seems rather incidental to Spotify, and his assertation that Spotify users generate twice the gross cashflow of iTunes users does little to quell the debate on artist royalties. Suggesting this is a “golden age of music,” as Ek does in the interview, seems a little far-fetched.
Spotify is a fantastic music discovery tool, of course, but a downfall wouldn’t be inconceivable if the implication stuck that they’re doing wrong by the artists of the non-major label community. Hopefully the royalty rates toward artists improve with Spotify’s financial fortunes. If not, Ek might sound more defensive during his next interview. [NME]