Scott Borchetta has never been afraid to question the worth and economic stability of streaming music services.
As Taylor Swift’s manager, the US exec protects and advises the most famous Spotify holdout on the planet. (Sorry, Prince.)
And as her label owner at Big Machine, he also sees exactly what income Swift is receiving from streams vs. sales of her material.
Although Swift’s decision to pull her catalogue from Spotify hit headlines last year, it’s a misnomer to suggest that she’s ‘anti-streaming’ – much of her material can be found on paid-for services such as Rdio or Tidal.
However, her biggest record to date – last year’s 1989 – currently remains a streaming exclusive on Apple Music.
In a new interview with the Upstart Business Journal, Borchetta has stated some home truths about the ultra-competitive music streaming market.
“TEN YEARS FROM NOW, I GUARANTEE YOU AT LEAST HALF THE STREAMING SERVICES THAT EXIST TODAY WILL NOT EXIST, AT LEAST NOT FREESTANDING.”
SCOTT BORCHETTA, BIG MACHINE
His big prediction: half of the current players won’t survive in their current form – especially when profits seems hard to come by for even the largest operators in the market.
“There are going to be real breakthroughs in streaming,” he says. “If you look back 10 years ago where radio was, where online radio was, where streaming was, it was just getting started.
“Ninety percent of those outlets that we visited in that first year are out of business, so 10 years from now, I guarantee you at least half of those streaming services that exist today will not exist, at least not freestanding.”
Despite Swift’s reputation for standing up to streaming services over payouts, Borchetta is positive about the future consumption of music on demand.
He comments that “the musicians get paid” by the model, and: “When we can scale, it’s going to be really so much better for everyone.”
In a short but interesting interview, Borchetta is asked about rumours earlier this year which suggested Big Machine might be for sale.
Some suggested that Apple was interested in buying the company, which carried a $250m valuation.
“The conversation started because our distribution deal with Universal had expired,” the exec explains. “There were specific things I wanted to do, and to achieve that we had to really figure out what our market value was, and you can’t do that in-house. You have to go outside, and we found out that [the company] had quite the incredible value.
“We looked at all types of opportunities and at the end of the day, it just made the most sense to continue the great relationship with Universal Music Group.”
Alongside Swift, other Big Machine acts include Florida Georgia Line, Reba McEntire, Tim McGraw and Martina McBride.
