Spotify, other streaming services lose more than 200 labels


A webpage displaying Spotify Ltd.'s Spotify music site is seen on a computer monitor in San Francisco, California, U.S., on Thursday, July 14, 2011. Spotify Ltd., the European online music service, is now available in the U.S. by invitation and through subscription and will vie with Oakland, California-based Pandora Media Inc. for listeners. Photographer: David Paul Morris/Bloomberg (David Paul Morris/BLOOMBERG)
November 18, 2011

Concerned over a recent study from the NPD Group and music industry group NARM, music distributor ST Holdings has decided to pull its approximately 200 labels from Spotify, Simfy, Rdio and Napster.

The company said in a Wednesday statement that it made its decision because the study found that streaming services such as Spotify were discouraging sales. According to a report from Digital Music News, the study found that having access to tracks has, in some cases, decreased consumers’ desire to own the music.

“As a distributor we have to do what is best for our labels. The majority of which do not want their music on such services. They provide poor revenue and have a detrimental [effect] on sales. Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity,” STHoldings said in a statement on its Web site. The group said that of its more than 200 labels, only four said they wanted to stay on the streaming services.

Music Ally, it should be said, also noticed that one of the members of a band signed to an ST Holdings label, Blue Mar Ten, is Apple’s director of music for iTunes Europe.

In response, Spotify said Friday that it respects ST Holdings’ decision, but hopes that the group will change its mind.

“Right now we have already convinced millions of consumers to pay for music again, to move away from downloading illegally and therefore generate real revenue for the music business,” the company said in a statement of its own.

The streaming service also raised questions about how the study was conducted, saying that Spotify’s effect should be measured not by revenue markers at the labels, but by how many users pay for Spotify rather than resorting to music piracy.

“Artists can – and do – receive very substantial revenues from Spotify, and as Spotify grows, these revenue streams will naturally continue to grow,” the company said, adding that it’s driven $150 million of revenue to rights holders in its three-year history.

Related stories:

Google Music: How it stacks up

Google opens Music service to everyone

Apple releases iTunes Match

Hayley Tsukayama covers consumer technology for The Washington Post.
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