Idolize The Innovators: Is Spotify Becoming the Music Business?•
Posted on August 02 2012
It sounds like a slightly odd idea, that a streaming service is becoming the music business, but there’s at least an element of truth to it. The amount that the company is paying in royalties is becoming significant:
Mr Mills’ comments came as Spotify revealed that it paid $180m in royalties to musicians last year and is on track to double that figure to $360m in 2012.
There’s always some confusion when people report “royalties” paid because it’s usually not made clear whether this is songwriters’ only, or the mechanical performance rights as well (that second is what the musicians or band get for playing the track).
This is indeed a significant sum:
Martin Mills, chairman of Beggars Group, said that streaming services have changed the way people listen to music, because the “friction-less” experience makes users much more likely to experiment with sampling new artists or delve into musicians’ back catalogues, and that they had given artists with substantial bodies of work a major financial boost as a result.
“Some of our catalogue artists earn more from streams than downloads of individual tracks [or] any other format,” he said. “If we didn’t have digital we wouldn’t have a business.