Fans of pop star Katy Perry woke up Friday to an e-mail on their smartphones: Her new single, “Chained to the Rhythm,” is available for streaming.
They got another reminder when they logged on to Facebook, where Perry is liked by more than 70 million people. As if that weren’t enough, Los Angeles and London fans on their daily commutes were greeted by billboards.
The best part for Perry? It’s all free. Spotify Ltd., the world’s most popular paid music service, will run a months-long promotional campaign leading up to the summer release of Perry’s fifth studio album, her first since 2013’s chart-topping “Prism.” The company’s marketers will continue to work with the singer to prove they can help sell records and concert tickets better than any radio station or rival streaming service.
“They were the ones who said, ‘We want to make this a big part of what we’re doing, we want to give you every level of support,’ ” said Martin Kirkup, a partner at Direct Management Group, which represents Perry. “We didn’t ask for a billboard. They offered it.”
Stockholm-based Spotify has been criticized by artists in the past over the royalties it pays and the use of their music on its free tier — Taylor Swift famously refused to offer her new album on the service in late 2014. Amid the sparring with record labels and preparations for an initial public offering, the company spent the past year building teams and services to improve its relationship with the industry.
“We’ve done a lot of thinking about how to position ourselves and be a better partner to the artist,” Stefan Blom, Spotify’s chief content officer, said in an interview. “We didn’t have an artist marketing team before, and we have that now. That was a direct consequence of dialogues between Troy and I, and with artist managers and labels.”
Troy is Troy Carter, a veteran manager and now Spotify’s global head of creator services. A Philadelphia native, Carter started his career working with rappers like Will Smith, Eve and Nelly, before moving to Los Angeles and signing the client that would turn him into an industry giant: Lady Gaga.
Carter was already an investor in Spotify through an angel fund when he joined the company in June as chief liaison to the music industry. He recruited a small team of executives from record labels, music publishers and ad agencies to help Spotify respond better to the needs of artists.
“That’s my task,” Carter said in an interview.
Spotify has begun to see results. The head of The Weeknd’s label, Republic Records, praised the company’s “historic” support after the R&B singer smashed the streaming service’s record for plays in a single day. His album “Starboy” went on to rule the charts for five weeks. A promotion with singer-songwriter Shawn Mendes was expanded to his upcoming arena tour. Spotify helped sell advance tickets and is now talking with his manager Andrew Gertler about further promoting the tour.
Tough to ignore
Spotify’s size makes it hard for artists to ignore. The service surpassed 100 million users last year, including more than 40 million subscribers, many of whom pay $9.99 a month. Its more than 60 million free users hear advertising and don’t enjoy the same functionality. Yet Spotify continues to lose money, because of high licensing costs, and needs to strike new deals with the major labels to maintain its access to top artists.
Longtime holdouts to streaming, from the Beatles to the Black Keys, have eventually given in and put their catalogs on Spotify and other services. Some of the most popular music by Prince, who pulled his catalog from Spotify before his death last year, is returning to streaming services this weekend.
Streaming services were the single largest contributor of sales to the U.S. music business in the first half of 2016, surpassing revenue from iTunes, Amazon and physical purchases, according to the Recording Industry Association of America.
And while radio still reaches far more people on a daily basis than Spotify, broadcasters doesn’t have the same level of data about their listeners. Spotify can provide artists with a trove of information about who is listening to them, when and where.
“Radio won’t play all 18 songs off an album,” Carter said. “No rock station will pick up an R&B act like The Weeknd. With 4,500 owned and operated playlists, we can help you reach new audiences.”
For all of Spotify’s growth, it has still had to wait to offer many of the biggest albums of the past couple years. Nearly all the most-nominated artists at this weekend’s Grammy awards, including Beyonce and Drake, gave exclusive rights to Tidal or Apple Music because of their ties to those services. Adele, who will vie against Beyonce in the awards’ top categories this year, shunned streaming services altogether for seven months, denying them access to her latest album, “25.”
Those services also help market artists, have recruited well-known industry figures and are striving to improve their own ties with musicians. Pandora Media Inc. began offering data on listeners and marketing support, while Google’s YouTube has begun funding videos and advertising for emerging artists. Apple Inc. bought national TV commercials featuring Swift and Drake.
Most labels are still pushing streaming services to let them choose if they want music to be available on free services. Yet resistance to Spotify, in particular its free tier, is weakening, Carter says. Fewer and fewer artists are asking to restrict their music to paid users.
“The argument over ad-supported vs. premium, and whether Spotify pays or not, I think it’s gone,” Carter said. “You have a lot of artists just excited to get their music in the platform.”