Spotify's success seems unstoppable, despite many labels (especially indies) removing their artists from the swedish streaming service as they pay-out per stream is extremely low.
Yesterday was a historic day as the US data from diverses streaming companies like Spotify, Rhapsody and Slacker have been added up to the Billboard Hot 100 charts, the US singles popularity chart (which is based on radio play and sales while it's solely based on sales in the UK). This move illustrates very well the change of balance we're witnessing these last two years between digital download sales (no one hardly buys CD singles no more) and streamings. To give a number, Nielsen data shows that 494.000.000 songs were streamed last week while only 27.100.000 singles were legally obtained. All those numbers may look good to the users, yes they love Spotify and streaming and why shouldn't they as the offers are very interesting, but the thing is: this is killing the smaller labels.
Do the maths: Itunes will pay the labels 0,40 Euro per download while Spotify will only retribute 0,002 Euros. If we take that with the numbers of singles sold last week in the as a simple calcalation basis, we can see that downloads would pay back 10.840.000 Euros to the music industry while streams will only see 988.000 Euros going back to the industry. See what we mean ? While streaming is the way the consumer visibly prefer, we can only gasp at the numbers of this new business model that will be, there's little doubt about that, extremely bad for the music industry in the long run. But...wait, two of the biggest music industries big guys aren't from the music industry (Apple and Spotify). Do you think they care about it or do they just milk the cow while they can ?
What is amazing is how fast the penetration of new technology has totally change the music business and it's getting faster and faster: after all we can say that the entire model started to blow open round 1999 (Napster), went thru a first major decisive change in 2003 (Itunes) and now, after merely a few months in the US public eye (Spotify started there in july 2011...) streaming is already biting a big share off what was the latest new model, the digital downloads stores.
All we need to do is to find a way so that streaming, visibly today's users' favorite way of enjoying music, sees the music community given back a fair share of its revenues so it can pursue producing music.
Or is streaming a business model solely dedicated to extract money from music while it's there, not thinking (loudly) one second it actually destroys the environment it feeds from ?
The opinions expressed here are those of the authors and do not necessarily reflect the positions of Kollector.