War on ‘Freemium’ Music Services Rages On, Rhapsody CFO Weighs In

War on 'Freemium' Music Services Rages On, Rhapsody CFO Weighs In
Still continuing to make news, the debate over the economics of online music streaming has been reinvigorated after artists began to speak up about unfair compensation. Earlier this month, Taylor Swift suddenly pulled the plug on Spotify, withdrawing all her entire music catalog from the service, and subsequently rallied a campaign against Spotify and other similar streaming services that offer music for free. She recently told Yahoo,

I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music. . And I just don’t agree with perpetuating the perception that music has no value and should be free.”

This was the match that set the forest ablaze. Soon after, renowned country artist, Jason Aldean, followed suit by pulling his latest album from Spotify, and Sony Music big whig, Kevin Kelleher, suggested that his company is considering withdrawing its support of free music services such as Spotify.

Spotify has since spoken out to set the record straight. CEO Daniel Ek discussed the genesis of Spotify, citing piracy as a major issue that was paying artists nothing, and ultimately detracting from the music industry as a whole. “Spotify [on the other hand] has paid more than two billion dollars to labels, publishers, and collecting societies for distribution to songwriters and recording artist. . .so all the talk about Spotify making money on the backs of artists upsets me big time”, Ek says.

Regardless, as Spotify and other similar streaming services continue to be portrayed as the bad guys, online music companies that don’t utilize a ‘freemium’ model, like Beats Music and Rhapsody, stand to gain. Rhapsody CFO, Ethan Rudin, spoke out regarding the recent attacks on the ‘freemium’ model and how it is not only beneficial to his company, but also the music industry as a whole. In his statement, Rudin highlights two main flaws with the ‘freemium’ model. First, he states that listening to music is an experience that SHOULD NOT be interrupted, and that abruptly shoving advertisements in between tracks just cheapens the experience. Second, he points out that by offering ‘free’ music, services like Spotify are lessening the value of a music album for future generations, teaching young music fans to expect that music is free.

As the battle against streaming services that provide free music rages on, only time will tell who will come out on top on the other side. Until then we are left with the same old issue of artists and right-holders not getting appropriately compensated for their hard work, a problem that has been around since the emergence of music on the inter-webs. Who will make the next move?