Cliff Burnstein, a co-owner of Q Prime, a talent management company that handles the careers of METALLICA and other major acts, spoke to The New York Times about the reports that the sales of METALLICA‘s studio albums were negatively impacted by the band’s decision to add its catalog to the streaming service Spotify on December 6.
According to Burnstein, as the Spotify subscriber numbers grow, royalty rates will also climb, a process that was previously seen whenever new technologies have been introduced.
“There is a point at which there could be 100 percent cannibalization, and we would make more money through subscriptions services,” Burnstein said. “We calculate that point at approximately 20 million worldwide subscribers.”
Spotify reportedly reaches 20 million users in 17 countries, with a quarter of those paying subscribers.
Billboard.biz reported in late December that sales were 15% below expectations for METALLICA‘s studio albums the week the titles were added to Spotify and 35% below expectations the following week.
METALLICA sales had jumped 60% to 61% in the four-week period leading up to Christmas in both 2010 and 2011. In 2012 that four-week increase was just 27.2%.
METALLICA has made all nine of its studio albums, as well as various live material, singles, remixes and collaborations, available on Spotify. The move is significant because Sean Parker, who co-founded Napster, now sits on the board of Spotify. METALLICA waged a battle with Napster more than a decade ago over the illegal sharing of the band’s music, which resulted in both legal action and a battered public image for the band.
At the press conference in New York announcing the Spotify deal on December 6, Parker and METALLICA drummer Lars Ulrich appeared together and seemingly buried the hatchet. Ulrich said, “When [Parker] and I saw each other a few months ago. We could see that we had been put down as adversaries. We realize we had much more in common and sitting down was long overdue . . . We were younger, maybe somewhat more ignorant. We sat down and had a heart to heart.”
In a statement at its web site, METALLICA said, “We are extremely proud to be a part of Spotify, who not only has a proven track record, but is by far the best streaming service.”
METALLICA is now able to make these deals directly since, as of last month, the band has complete control over the master tapes of all its audio and video recordings. The band has also launched its own label, Blackened Recordings.
The first release for the new label was the “Quebec Magnetic” DVD on December 10, which showcases footage from two Quebec City live performances recorded in 2009.