Spotify, has over the year, transformed the lives of musicians by reducing piracy rates of their property. The Company introduced the tier service to ensure that hard working musicians earn their royalties. Spotify has succeeded since in a recent report, they stated that the revenue base for artists has grown to $2 Billion in terms of royalties.
Record labels no longer run at a loss due to the anti-piracy move by Spotify. Musicians that are signed to record labels owe a lot to Spotify that have over the years reduced piracy rates by over 9%. Spotify is major players in the music industry as the royalties paid out to the music industry increases with every single subscription to the tiers. Spotify pays royalties for all the listening occurring through their service then distribute over 70% of revenue to the right owners. Right owners include; music publishers, record labels, distributors, as well as the artists, but only earns 30% of the revenue generated. The below chart from Spotify displays the positive effect that the Company has had on the crime of Piracy.
There has also been a decline in recorded music over the years due to the live streaming of music as well as an increase in digital formats like downloading songs. The music industry has over time evolved due to the advent of Spotify. It has ensured that music writers and singers gain their royalties by highly reducing piracy rates in the world. Spotify encourages its users to subscribe for their favorite songs in order to re-grow the music industry. Spotify had over 60 million-world users as at December 2014.
What are your thoughts on Spotify and what is has brought to the music industry; both on and offline?