I think the thing people are missing here is that the $500,000 paid to Taylor Swift doesn't go directly to her, that is the gross royalty which presumably the publishers and label take the majority of. The artist themselves will receive a fraction of that. The situation is different for indie artists who are effectively the publisher and label too, but they have the opposite problem of lack of scale, and the per-play royalty is far more important for the long tail than for the hits, so the negative impact is greater. Taylor Swift could survive on magazine photoshoot revenue alone, an option not open to The Amazing Snakeheads or whoever.
Spotify may not be "making a profit" as a corporation but they still presumably have hundreds of salaried staff and their business model is basically jam tomorrow - their fixed costs are mostly the same whether anyone has signed up to paid subscriptions or not, so they all definitely get paid and the artists may or may not, but Spotify will sell their product in the meantime regardless. That isn't ethical. "Exposure" and "discovery" still work to the advantage of the large labels - Spotify is a new gatekeeper and being playlisted on the right Spotify list can make or break careers. There doesn't seem to be much transparency around how level the playing field is and how much influence the shareholders have.
For an artist, the contrast with iTunes is stark. Apple didn't turn round and say "we'll pay you if this is a success" - they paid the full royalty from day one. Spotify should have been regulated in the same way that radio is, and royalties should have been on a par with that, as a minimum, with a premium for the on-demand aspect.
To be honest, YouTube's history is far more ethically dubious but they don't seem to get the same heat from artists I guess because they are seen as too big/powerful to be criticised.
But like I said - that's the deal with signing to a major label - you agree that they will take a lot of the profits for your album in return for shouldering the costs of recording and promoting it. Artists can always remain independent and just pay a unit cost for distribution, but that means taking the risk of spending their own money on recording, and doesn't necessesarily come with the marketing opportunities that come with being signed to a major label.
I don't see Spotify as ethically dubious at all - they've had agreements with major labels from day one, and have only ever streamed music which they had a license for (unlike, say Grooveshark). Spotify only pays you if people lsiten to your music, in the same way that iTunes only pays you if people buy the music. It's the same deal, just on a 'per listen' not a 'per purchase' basis. The only issue with Spotify as I see it is that they don't pay artists (or their representative labels, which again, the artists signed up for) all that much, but like I said, they're not actually earning that much money either.
While your point is true in general, in the case of Taylor Swift she has a bit more sway. Not only is she, by far, the biggest act on a small indie label, she was the first artist signed by that label and her father was one of the initial investors. So while she doesn't own her own label, she is on a small indie label and no doubt has quite a bit of influence.
Spotify may not be "making a profit" as a corporation but they still presumably have hundreds of salaried staff and their business model is basically jam tomorrow - their fixed costs are mostly the same whether anyone has signed up to paid subscriptions or not, so they all definitely get paid and the artists may or may not, but Spotify will sell their product in the meantime regardless. That isn't ethical. "Exposure" and "discovery" still work to the advantage of the large labels - Spotify is a new gatekeeper and being playlisted on the right Spotify list can make or break careers. There doesn't seem to be much transparency around how level the playing field is and how much influence the shareholders have.
For an artist, the contrast with iTunes is stark. Apple didn't turn round and say "we'll pay you if this is a success" - they paid the full royalty from day one. Spotify should have been regulated in the same way that radio is, and royalties should have been on a par with that, as a minimum, with a premium for the on-demand aspect.
To be honest, YouTube's history is far more ethically dubious but they don't seem to get the same heat from artists I guess because they are seen as too big/powerful to be criticised.