Spotify and Lady GaGa

Lady GaGa leaves her London hotel, March 2010. Image: Rolling Stone

I don’t think I’m alone in the world in expressing my sincere admiration for the sheer artistic commitment of Stefani Germanotta, better known to her millions of fans as Lady GaGa.

While an in-depth critical dissection of the songwriting, performance and (perhaps most notably) entrepreneurial talents of contemporary music’s hottest new star are outside the scope of this blog, I will probably post something about this fascinating artist from a musicological perspective down the track. (Just one thing that intrigues me: GaGa’s Italian-American ethnicity and the clear inspiration she seems to have taken from another Italian-American, Madonna).

But GaGa’s relationship to the changing economics of the music industry certainly is a topic of this blog. And that’s been much in the news lately, with the revelation that Spotify, the hit new streaming wesbite based in Sweden, paid GaGa only US$167 for more than 1 million downloads.

The news quickly spread around global media, as horrified musicians and collection agencies mobilised to fight the latest threat to artistic livelihoods. Sam Leith has weighed in at The Guardian, as have a number of other commentators.

So, is this more evidence of the internet destroying recorded music as we know it? Well … no, actually, as Steve Lawson points out:

[The original report about the Spotify royalty] does mention that she’s had 20 million paid downloads. 20 MILLION paid downloads. (that warrants a Dr Evil pinky-in-the-corner-of-the-mouth pose).

Yup, that’s not the headline, that her digital strategy that includes Spotify has lead to her selling 20 MILLION downloads – in an age when any of those 20 million sales could’ve been grabbed from a file sharing service or copied from a friend (I’m taking a wild guess that Lady Gaga fans run in packs – she doesn’t strike me as the kind of artist that appeals to the friendless reclusive goth kid with the idiosyncratic taste).

Lawson concludes that even if Spotify only functions as a streaming radio service, the artists are still winning.

In fact, Spotify has since responded to the criticism by saying that the $167 figure was only a small part of GaGa’s royalty earnings. According to Paul brown of Spotify, quoted in Billboard,

“This figure is over 15 months out of date and relates to a short period of time, just after Spotify had launched back in late 2008 and is not an accurate or current reflection of the total royalties paid out to an artist and composer like Lady Gaga. It also only relates to royalties due from STIM (the Swedish collecting society) in respect of plays in Sweden ONLY and none of the other markets.”

On the other hand, there is no doubt that the revenue streams once available to artists from music sales are far less than they hay-days of the 1980s and 90s, as Peter Kafka points out in this post:

Remember when people used to predict that digital music sales would make up for the disappearing CD? That’s officially over now: Last quarter, for the first time ever, the number of digital songs sold in the U.S. declined.

More on Spotify: Information Is Beautiful has a typically impressive post about this very point, and the Guardian’s Charles Arthur has an excellent post breaking down the known information underlying Spotify’s business model.

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2 thoughts on “Spotify and Lady GaGa

  1. Just heard about this tonight, dinner with other cultural economists in Copenhagen. Interesting new option in music listening — not ownership (downloads) but rent (streaming online). Copyright and royalty implications?

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