Opinion: Taylor Swift, inescapable on air, can’t be found on Spotify

For someone whose face and voice seem inescapable these days, Taylor Swift puts a lot of faith in the power of scarcity.

Swift’s most recent release, the album “1989,” is nowhere to be found on the leading online music-on-demand services. In fact, Swift yanked all of her records from Spotify, leaving only one of her recordings available to the more than 40 million users of that service worldwide. She has similarly pulled her catalog from the free tier at Rdio, although her older releases are still available to Rdio’s paying subscribers.

This strategy is part of Swift’s full-court press to stoke sales of the new record. But the tradeoff seems likely to be lower overall revenue for Swift and her label, who are betting on a fading business model at the expense of a growing one.

The practice of delaying an album’s availability on streaming services isn’t new; Swift also kept her last record, 2012’s “Red,” off subscription services for about half a year. At the time, the head of Swift’s record label, Scott Borchetta, explained to Billboard that the services’ business model didn’t work for his label with its small roster of acts. He was particularly opposed to the extensive free, advertiser-supported streams that Spotify and Rdio use to attract more paying customers.

“I don’t have thousands and thousands of albums and hundreds and hundreds of artists, I have a finite artist roster and finite number of releases,” Borchetta told Billboard’s Andrew Hampp. “If you’re a big battleship like Sony or Universal and have tens of thousands of masters, that income stream makes sense at a big corporation. It doesn’t make sense to a small record company.”

His comments reflect the antipathy many individual artists and labels hold for the streaming services. They pay a fraction of a penny per song played, so it’s hard to generate sizable royalties unless you’re aggregating a whole lot of songs into one big river of fractional coins. The royalties are especially small for the advertiser-supported streaming tiers.

But here’s the thing. Although Swift doesn’t have many songs, she has a huge number of fans who play her tracks endlessly. The one song still on Spotify is a track from the Hunger Games soundtrack, “Safe and Sound,” which has been played more than 32.6 million times. Even if Swift and her label collected only half a cent for each of those plays, that still translates into $163,000. For one song.

Why would anyone leave money like that on the table? Because, evidently, they don’t want the streaming services to compete with CD sales and downloads that pay considerably higher royalties. This fear of cannibalization kept the music industry from embracing online services for years after the original Napster file-sharing network arrived in 1999. The major record companies and the big independent-label groups warmed to online services, however, as CD sales tanked.

Before too long, there won’t be much left to cannibalize from any kind of music sales. The revenue from downloadable tracks is starting to slide, dropping more than 10% in the first half of the year. The strongest growth is coming from streaming services -- subscription-based and ad-supported -- although they aren’t large enough yet to offset the losses elsewhere.

Spotify is the biggest of the subscription services, with more 10 million paying customers among its more than 40 million active users. Collectively, Spotify and its competitors have about 30 million paying subscribers worldwide. In the U.S., that number was 7.8 million in the first half of the year, up more than 40% from the first half of 2013.

Of course, it may be worth something to Swift to finish at the top of the sales heap, no matter how diminished. And while her core fans will buy her albums regardless, some of the more marginal ones might be happy just to stream Swift’s releases to their tablets or their smartphones. By making sure “1989” isn’t available that way, some percentage of those fans may break down and buy the thing at Wal-Mart or iTunes.

Or they may just listen to something else.

That logic has kept Beyonce’s latest album, which she released exclusively on iTunes last December, off of streaming services to this day. There are several other acts that have held their new releases off of subscription services, including Coldplay and the Black Keys. And some legendary acts don’t permit any streaming, including the Beatles.

It’s not possible to know how many fewer copies of her album Swift would have sold had it been available on Spotify, Rhapsody, Rdio and the other subscription services. She may even have sold more -- some of those subscribers buy releases that they sample or stumble over there, and Swift’s boycott means that there be no such serendipitous sales of “1989.”

It seems certain, though, that hit-makers such as Swift make more money when their material is available on streaming services, regardless of what happens to their album sales. The growing global audience for these services translates into a staggering number of plays for top-tier artists -- the last four singles from Beyonce have collectively been streamed more than 164 million times on Spotify alone. And that volume, in turn, translates into meaningful revenue.

Spotify reported that an unnamed top 10 album generated $145,000 in royalties in July 2013, while a global hit album collected $425,000 that month. Those numbers have grown rapidly in recent years, and will continue to grow as consumers gravitate toward subscription services. And in Spotify’s case, the growth is helped along considerably by the free streaming tier that’s persuading people to spend more time and money listening to music.

Swift and her record label (Big Machine Records of Nashville) weren’t commenting Monday about the rift with Spotify; instead, they were announcing details of the world tour Swift will be mounting next year. That’s not surprising, given how important concert revenues are even to (or rather, especially to) stars such as Swift who can still sell songs and albums.

With sales fading even for downloadable songs, artists have more reason than ever before to make their music available wherever fans might be found. As the steady erosion of CD sales has shown, consumers want to buy music on their own terms, not the ones dictated by labels and artists. Keeping “1989” off of the on-demand services isn’t going to reverse that trend.

Follow Healey’s intermittent Twitter feed: @jcahealey