Taylor Swift's record label disputes Spotify payment claims

Singer received less than $500,000 in the past 12 months for US music streaming, label tells Time magazine.

Taylor Swift's record label disputes Spotify's compensation claims. Getty Images

The war of words over how recording artists are compensated by streaming-music services heated up Wednesday when Taylor Swift's music label released revenue figures that don't appear to jibe with Spotify's.

The singer was paid less than $500,000 for domestic streaming of her music in the past 12 months, Scott Borchetta, the CEO of Big Machine, told Time magazine. Borchetta's comments come a day after Spotify CEO Daniel Ek wrote in a blog post that an artist of Swift's popularity could expect payments in excess of $6 million a year.

While Ek's figure reflects a global presence in 60 markets and not just the US, Borchetta's comments highlight the friction in an industry undergoing a fundamental change in how consumers purchase music. Streaming music is one of the top sources of music sales and is growing briskly, while sales from physical music (CDs) and digital downloads are in decline, according to the Recording Industry Association of America.

However, the payment models have not kept pace with that rapid change in distribution and sales, leading artists such as Swift, Pink Floyd and Radiohead's Thom Yorke to criticize the burgeoning streaming-music model.

"The facts show that the music industry was much better off before Spotify hit these shores," Borchetta told Time. "Don't forget this is for the most successful artist in music today. What about the rest of the artists out there struggling to make a career? Over the last year, what Spotify has paid is the equivalent of less than 50,000 albums sold."

Spotify representatives declined to comment beyond what it told Time, which indicated that its artist payout is growing with its user base.

"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," said Jonathan Prince, Spotify's global head of communications and public policy. "And Taylor just put out a great record, so her popularity has grown too. We paid Taylor's label and publisher roughly half a million dollars in the month before she took her catalog down -- without even having 1989 on our service -- and that was only going to go up."

Swift's apparent frustration with Spotify's business model led the country-pop singer to pull her entire music catalog off the streaming site last week. Spotify complied with Swift's request to remove her songs just as her latest album, "1989," had the largest sales week for any record since 2002.

She later explained that her decision was based on her unwillingness to contribute her life's work to an experiment that doesn't fairly compensate writers, producers, artists and other music creators.

"I just don't agree with perpetuating the perception that music has no value and should be free," she said in an interview with Yahoo. She let some of her music remain on other free services such as YouTube and Soundcloud.

Ek responded in his blog post Tuesday that Spotify doesn't devalue music and said that Spotify has paid more than $2 billion to rights holders -- $1 billion from 2008 through 2013 and another $1 billion in 2014 alone.

Ek said stories from artists and songwriters about receiving little or no money from streaming frustrate him as well. If Spotify's $2 billion in payments aren't "flowing to the creative community in a timely and transparent way, that's a big problem," he said, adding that the company will work with the industry to solve it.

CNET's Joan E. Solsman contributed to this report.


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