The chairman of the largest group of independent labels in Europe says more than half of their royalties now come from streaming services.
It follows recent news that 57% of music revenue in Sweden, the home of Spotify, is from streaming, confirming the vast growth that subscription services have seen in a few short years.
Beggars Group represents significant independent labels including 4AD, Matador and XL Recordings. Their chairman Martin Mills told the Telegraph that streaming has now overtaken digital downloads, allowing users to experience new music in a "friction-less" way which makes them more likely to experiment and delve into artists' back catalogues. Some of our catalogue artists earn more from streams than downloads of individual tracks [or] any other format, he said. Physical [releases are] still important to us but the lesson we learned over last few years is that you have to strike a balance between giving people what they want on the one hand and actually being a business [and charging for content].
Spotify paid more than $180m to musicians last year, and is currently on track to double that figure to $360m this year. Almost one quarter of its 15 million users pay a monthly subscription fee, which in the US is $5 per month for unlimited ad-free access or $10 for additional mobile access.
However, the company has been criticised for paying artists a relatively small share of its earnings. Observers are quick to blame Spotify when it is in fact record labels who pocket the difference, but the company refuses to share a breakdown of how its royalties are split between itself, the labels and its shareholders. Several of its early backers were major labels, which may give them a significant slice of the pie.
What do you think of Spotify's success? Is it great that streaming helps reduce piracy, or is it just another way to line the pockets of major labels? What about the quality of streaming compared to CDs? Share your view in the comments.