European musicians making more from Spotify than iTunes

Spotify pays out 13% more royalities in Europe, report says

Technology trends and news by Steven Loeb
November 5, 2014
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Musicians may rail against streaming services and how much they pay out, with Taylor Swift even going to far as to pull her music from Spotify entirely this week, but perhaps they should rethink that strategy. Because it is starting to look like Spotify has now started to overtake the iTunes Store as a revenue generator in some areas.

According to new data out from Kobalt Music Publishing, and reported on by VentureBeat, songwriters in Europe actually earned 13% more from Spotify than they did from iTunes in the first quarter of 2014.

The most surprising think is how much the numbers have flipped in a pretty short period of time. Writers were still getting 8% more from iTunes in the fourth quarter of 2013. In the third quarter that number was 32%. Overall, streaming revenues for its Kobalt musicians are now 10% of income, as compared to 3% in 2011.

Kobalt, an independent music publisher and music services company, that offers services that include online global copyright administration, creative and synch/licensing services, digital collections, label services, neighboring rights management and pipeline advances to rights holders.

The company says that it administers more than 250,000 copyrights worldwide on behalf of over 1,200 content holders including the world's top songwriters, artists and other music publishers. So they have access to a good amount of information to glean from. 

“Spotify overtaking iTunes in Europe is an important new milestone in streaming,” Willard Ahdritz, founder and chief executive of Kobalt, said in a press release. “The music industry’s infrastructure is failing them, unable to efficiently account for the enormous volumes of data from digital transactions.”

Of course, the writing has been on the wall for digital music purchases for a while now. Things are changing, and quickly.

Last year alone, streaming rose 32%, while digital track sales suffered their first year to year decline. And it was recently reported that iTunes sales are down a total of 13% this year so far. And so it's no surprise that seemingly every major Internet  property, including GoogleTwitter and, yes, Apple, is trying to break into the space right now.

Still, comments from musicians like Radiohead's Thom Yorke, Jimmy Buffet and members of Pink Floyd regarding the amount of royalties they make from streaming services like Spotify and Pandora, and the recent move made by Swift, show that as much as things are shifting, it is going to be a bumpy ride and there will be some big fights ahead.

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