Taylor Swift and Spotify: Building Reputation Capital Through Conflict

As the global market continues to expand and consumer options multiply, businesses can no longer rely on an exceptional product to succeed – they also need an exceptional reputation.  We are living in a reputation economy.

To succeed in the reputation economy, businesses must be vigilant about how the public will interpret their practices. Those that define their social purpose while balancing their costumers’ product needs will have a competitive edge over those who fail to connect with customers on a deeper personal level.

The reputation economy is an important concept in conflict – every conflict offers an opportunity for reputation enhancement.

A great example of reputation management through conflict can be seen in the recent struggle between Spotify and Taylor Swift. Spotify, a service that allows users to stream music online, and country-music star Taylor Swift are engaged in a disagreement over royalties and which Spotify users should get to listen to Swift’s new album 1989. While Swift’s original intention was to limit streaming of 1989, the dispute has snowballed culminating in Swift’s team pulling her entire catalogue of music from the site.

Since then, both sides have used public platforms to express their concerns, offering an illustration of how businesses can use conflict to enhance their brand and leverage their reputation. By using this conflict as an opportunity to express themselves and connect with fans, each side has generated reputation capital while pursuing a satisfying outcome of the conflict.

With this dynamic in play, consider Swift’s reaction to the conflict. Through her outspoken comments on the dispute, Swift frames herself as a firm advocate for the music industry, a confident feminist and even an idealist. Commenting on the dispute, she states: “I'm not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists, and creators of this music.”

Swift has been building her reputation for some time now through public engagement on this issue. This past summer, in a Wall Street Journal op-ed about the music business and her role in it, Swift writes: “My hope for the future, not just in the music industry, but in every young girl I meet…is that they all realize their worth and ask for it.” Swift is not just a performer, she’s the face and voice of a very lucrative brand, and she’s clearly taking the time to express herself with a view to building her business and brand reputation.

Spotify, too, has been working to develop its brand through this conflict. Assuming the role of the music lover’s advocate, it asks rhetorically of Swift: “Don’t you love us as much as we love you?” Along with a playlist Spotify created to woo Swift back, Spotify has commented that it “hope[s] she'll change her mind and join us in building a new music economy that works for everyone. We believe fans should be able to listen to music wherever and whenever they want, and that artists have an absolute right to be paid for their work.” Spotify has presented itself as reasonable and collaborative, with a touch of cheeky charm, while still pursuing an outcome that enhances its brand.

Whether Swift fans hear her music on Spotify again or not, this dispute has allowed both Swift and Spotify to frame their consumer message, strengthen their reputation, define their values, and push business talk beyond dollars and cents.

As we can see from the Spotify and Swift dispute, in the reputation economy a business deal gone awry doesn’t mean your reputation has to suffer. Likewise, a financial gain at the negotiation table doesn’t always mean a win for the business if business practices leave a bad taste in consumers’ mouths. Regardless of negotiation outcomes, businesses and dispute resolution practitioners would be well-advised to consider how conflict can be used to generate reputation capital, build their brand, and connect with their customers.