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The slow death of streaming music services?

November 15, 2011

One of our Facebook friends, Sanjay Kundalia, posted this today. I though it was worth repeating here and making a short comment.

Here’s word from the distributor of a UK based D’n’B act about Spotify/Simfy/Rdio/Napster and all other streaming services: ‘We have taken the decision to no longer provide content to any of the above streaming type music services. This decision is based on the fact that the revenue from such services is negligible and these services cannibalise revenue from the likes of iTunes.

The following facts have been established.

  • Q3 was the first full quarter supplying content to all the above services.
  • Overall digital revenue for the quarter was down 14%.
  • iTunes EU Q3 revenue down 24%.
  • This is the first time ever our digital revenues have fallen
  • Spotify/Simfy/Rdio/Napster accounted for 82% of all tracks ‘consumed’ in Q3
  • Spotify/Simfy/Rdio/Napster generated just 2.6% of Q3 revenue
  • Spotify/Simfy/Rdio/Napster revenues are tiny. (eg Spotify total Q3 streams = 750,000 = tracks. Spotify Q3 revenue = £2,500)

All content is currently being removed from Spotify/Simfy/Rdio/Napster.’

Sanjay has told me which distributor this was but that’s not important. The point is that these streaming services, which we’ve long been very suspicious of, are showing that they take a lot but give very little back to the artists. When we also take into account other reports that, for example, Spotify pays independents less than it pays major labels, then it becomes clear that our suspicions are well-founded. These services are the old music industry struggling to be a part of the modern digital music economy but they cannot get away from a fundamentally flawed and iniquitous economic model that continues to shaft musicians as they have for the last 60 years.

As a small, niche, independent label, our plays or sales don’t earn much at the very best of times, so being screwed by streaming services is quite annoying. We use an aggregator called Tunecore to place our tunes with all the download stores and streaming services. We get regular statements of how much we’ve earned.

Basically, streaming services pay an insulting pittance and the best rates from download sales are from iTunes and Amazon.



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