More than 200 labels have pulled their music from Spotify and other online music services in reaction to a new study that claims that steaming music services like Spotify discourage music buying. In addition to Spotify, music will be removed from other streaming services.
A total of 234 music labels representing mainly bass, techno and other electronic bands are no longer available on Spotify, Simfy, Rdio and Napster. The labels say they are not earning enough from the subscription music services and that they take away sales from pay-per-download sites. Their distributor, STHoldings, asked the indie labels if they wanted to remain in the music streaming services, only four of the 238 labels wanted to stay. The new study seems to have fueled their fears that the services are not encouraging members to pay for music.
The walkout follows a report released this week from NPD Group, a US market research group, and NARM, the National Association of Recording Merchandisers. The digital music study finds that services that facilitate greater access to music for consumers, like Spotify, may take away the urge to own music on CD or via download stores like iTunes. Spotify was not named specifically in the report.
STHoldings temporarily posted on their Facebook Page (now deleted) that bands have verified that online sales fell by 14 percent in the third quarter, the very first quarter that all labels offered music on the streaming services. Streaming music services accounted for 82 percent of all music consumed, but only 2.6 percent of sales increased. Revenue fell 24 percent from iTunes during the same quarter. STHoldings quoted a statement from one of their labels on their website: “Let’s keep the music special, f*** Spotify.”
Despite the complaints from the music industry the popularity Spotify is still growing. This week the music service launched in Belgium, Switzerland and Austria, and is now valued at $1 billion USD.
Also this week, Google has taken its music service, Google Music, out of beta. Google Music allows members to store purchased music for play on multiple devices. Members may also purchase downloads similar to iTunes.
Interesting article, I think the music industry will eventually find it’s way on the web. Most music sites including the new google music service are limited to US citizens all due to music industry limitations and it’s frustrating to non Americans. I use listnplay.com, grooveshark or jampri.com which are using YouTube videos and are available everywhere internationally and I find it as the only viable solution for international web users that also want to listen to music.