This may be the biggest pullout to date, and potentially part of a serious licensing problem. According to information confirmed Wednesday, UK-based digital distributor and label management company STHoldings Ltd. is now pulling 234 member labels from Spotify, Rdio, Simfy, and Napster. The decisive action was motivated by continued complaints from these member labels, specifically related to payouts, though it appears that a recently-released joint study from NPD Group and NARM ultimately triggered the move.
Here's a formal and detailed statement from the group. A complete list of member labels is here.
"STHoldings can confirm that we have taken the decision to remove all STHoldings distributed content from the following music services: Spotify, Simfy, Rdio & Napster.
"Despite these services offering promotion to many millions of music listeners we have concerns that these services cannibalise the revenues of more traditional digital services. These concerns are confirmed in our own accounts and a recent study by NPD Group and NARM.
"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 because of the poor revenues and the detrimental affect on sales. Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity. Quoting one of our labels, 'Let's keep the music special, fuck Spotify.'
All the labels we represent have been given the choice to have their music to Spotify, Simfy, Rdio & Napster. As of today (16.11.11) from the 238 labels we distribute, 4 have expressed that they would like to be on these services."
The group also shared some depressingly-low payout figures to bolster its case.
(1) During the third quarter - the first full quarter STHoldings supplied content to Spotify and others - digital revenues dropped for the first time. The year-over-year decrease was 14 percent.
(2) During that same period, iTunes revenue dropped 24 percent.
(3) During that same period, Spotify, Rdio, Simfy, and Napster accounted for 82 percent of all content 'consumed,' but just 2.6 percent of overall revenues.
(4) During that same period, Spotify paid £2,500 ($3,376) for 750,000 total streams.
Steven Finch Wednesday, November 16, 2011
This is just yet another crazy move from yet another record label. The industry should be supporting these services.. not dropping them for uninformed reasons.
If you want to get your music onto these services for FREE and keep 100% .. then check out http://routenote.com
adam Wednesday, November 16, 2011
Actually steve, this data suggests that this is not a crazy move but a smart business decision. Spotify might be great, but if it damages the bottom line, it doesn't make sense. Think about it, you can listen to all these songs one at a time on youtube, its really easy. They aren't trying to prevent that. They just don't want to make a choice that will hurt them financially. There are lots of other ways for people to buy music online than ad-supported services that pay out really tiny sums.
Steven Finch Thursday, November 17, 2011
Of course.. but it is proven that Spotify doesnt canibalise the bottom line sales.
Adam Friday, November 18, 2011
Proven, you say? Please provide a link to the proof (article, research, whatever). Looking forward to your reply.
A7 Saturday, November 19, 2011
This proves that Spotify do not help to stop piracy and that lower digital sales from artists/labels.
Dylan Wednesday, November 16, 2011
What's crazy about it?? and what's uninformed? stop trying to promote your crappy site, and what made me laugh is you saying"If you want to get your music onto these services for FREE and keep 100%" Jokes!! Why would anyone pay to have music given way??? Keep 100%??? nothing of 100% = 0!! These streaming services are only an asset to the people that own them! And the argument of "oh you will reach more listerners" is worthless....people can't make amazing underground music and be creative for free. Dick head......
TN1 Wednesday, November 16, 2011
ST Holdings is a highly respected distribution company, not 'yet another record label'. Spotify might be a good business model for Lady GaGa who earns her cash from live shows and merchandise but the average Drum & Bass label is barely earning enough from unit sales, events and the odd t-shirt combined to be able to sustain drops in their revenue as big as those ST are reporting. How can you offer services within the music industry when you clearly lack knowlege on the most basic level?
ST? Thursday, November 17, 2011
Would ST Distribution like to explain why they will still allow free streaming on Soundcloud but not these services that will actually pay them money?
Would ST like to provide a third party auditor to prove that Spotify use went up enough to correllate to their alleged drop in iTunes money. Lots of things can cause lower sales.
mdti Thursday, November 17, 2011
soundcloud is more acessible than spotify (no need to register to listen or to download software), and better integrated in sites like facebook, and you have better control over it 'can add/remove in matter of a few seconds) . there is no discrimination between big labels and smaller ones (licences and such), no ads etc etc (i don't use spotify, nor any streaming service - for listening i mean - but a big fan of soundcloud, where i have no problem sharing my own tracks too, for the fun of it).
It sounds irrational, but it shows money is just not the only issue at stake here, control and expectations (based on true or false promisses) are probably higher in the list.
soundcloud is definitely a better tool for promotion than any streaming service.... at list in the point of view of some.
soundcloud Thursday, November 17, 2011
More accessable? OK, So Spotify you have to download software. Rdio you don't, it's the same amount of effort to sign up for Soundcloud and most people don't browse Soundcloud the same way they do in a retail environment.
The point is simple, labels enable free use of their music via soundcloud and You Tube and yet point to Spotify and Rdio as problems? Pretty stupid
a user Friday, November 18, 2011
that's not stupid. That's a right business practice.
The experience you have on youtube and soundcloud isn't competing with the experience you have with iTunes, which is instead what Spotify is aiming (one of the most critical concern of Spotify's tech team is providing the stream as fast as they can, under the 200ms, so that the user can't distinguish from a local source or a remote source).
Givin' away the catalogue almost for free is not what labels are looking for. [If you've got the milk (Spotify), are you gonna buy the cow (iTunes)?]
[you don't have the whole catalogue on youtube or soundcloud, you don't stream FULL ALBUMs overthere.]
Visitor Thursday, November 24, 2011
Those tracks on Soundcloud are predominently just clips (about half of the full track) and are for promotional purposes so it's not equivalent to having the entire tracks available on Spotify etc.
@Soundium_net Wednesday, November 16, 2011
@dBridge Wednesday, November 16, 2011
This is why STHoldings RULES!! Sodify!!
@CraggzCraggz Wednesday, November 16, 2011
@dBridge Wednesday, November 16, 2011
@DavideMartine Wednesday, November 16, 2011
interesting. Dunno where I sit with this debate. Don't like labels and artists losing out though.
@stacifrenes Wednesday, November 16, 2011
"we have concerns that these services cannibalise the revenues of more traditional digital services."
@joshcumbeemusic Wednesday, November 16, 2011
Lets keep the music special, f*ck Spotify"
Blogroll Wednesday, November 16, 2011
Spotify is bad for the artist on the whole, you get the 'the fact that its on spotify means your music gets heard' crowd (really? musicians need to learn to promote themselves better then if this is your argument) only that you get paid absolutely nothing, all they care about is any potential advertising revenue through traffic, essentially you are paying them a premium to be advertised to and they are paying most artists like 0.000012p per stream. They pay record companies an advance of which the artist sees nothing. In 2010 on spotify of 10 million users only 1 million were paid subs. How do you actually expect them to make that 2nd or 3rd album? off the revenue from your streams? funny people you are. Don't give me the 'artists make their money off touring and merch these days' crap either, artist always made money this way but it serves as promotion, as does radio play, making effort to get into magazines etc not one of their only sources of income.
The fact is, it's alot of tech companies wanting to pay absolutely nothing to make a tonne of money off of someone else
Ari Herstand Wednesday, November 16, 2011
This is really sad to see. These labels have a very short memory. When the majors fought (and ignored) the onset of digital music, Napster happened and buried them. You cannot cling to the old business models that may work for the moment, but will not withstand for the future. If you don't welcome the future you will get left behind.
As an independent artist myself, I understand the disparities first hand of Spotify revenue for majors and everyone else and I won't deny that incredible streaming services like Spotify reduce iTunes sales. It does. Yes I've seen my iTunes income fall as well, but I'm not upset about. It's inspiring. It forces me to innovate new and creative ways to make money.
This is how we progress and this is how the music industry grows. If you can't see by now (or didn't realize this 5 years ago) that this is where music is heading then you will get left behind. The distributors, labels and artists should take this opportunity to innovate new ways to make money other than iTunes sales because if that's all they are relying on then they're not going to survive much longer.
People have tasted the greatness of Spotify and understand what they want with music - instant streaming of every song in an iTunes like interface. Just because you pull your artists doesn't mean these people will choose your old model over the new one. If these fans are looking on Spotify for your band and you're not there then they move on to another band. They won't go prowl the internet to try and find your music.
gaetano Wednesday, November 16, 2011
As you are an independent artist, please explain to me how you plan on having a sustainable revenue stream.
-You can't tour forever nonstop.
-Publishing is only an solution for some, and is hit or miss at best.
-Brand association/sponsors only want a piece of you if you're already in motion, have an established brand they want to appropriate/align with..and again, this isn't something that will last forever (and will only work if you yourself don't mind associating your work with them).
-Merch is great, but also involves overhead which many artists can't generate without revenue from another durable good.
What people tasted with Spotify is something for nothing, which in most cases was brokered by labels that don't have their artist's in mind. As far as what happened 5 years ago, you can't compare a format change to devaluing of the content. As the reality of Decommodification becomes apparent, the entire bottom will drop out and potentially radiate out and into other aspects of music.
Just because the customer is always right, doesn't mean they always get what they want.
PR scheme Wednesday, November 16, 2011
It is very telling that people who don't even *know* STHoldings as a company, feel the obligation to support Spotify!
@P_Leezy Wednesday, November 16, 2011
P.L.O @ A.M.
HansH Thursday, November 17, 2011
I sure hope STHoldings publishes their Q4 en 2012 Q1 results as well.
Let's see if pulling your music from streaming really leads to more sales. I doubt it ... but let's wait and see.
Labels... First it is illegal downloading, then streaming... What's the next step?
It's a surprise. Thursday, November 17, 2011
BKBuffalo Thursday, November 17, 2011
Is anyone paying for music out there? Especially for independent artists? How many of you out there go out of your way to buy music on iTunes or Amazon? How about those who aren't the type to read digital music news and just want to listen to music? Yeah they're not buying music anymore...the tides are changing in this industry and damning and pulling out of something that will pay an artist versus the record label raping the artist is a pretty solid deal. Pulling out of Spotify isn't going to stop people wanting music for free...atleast this way the artist gets something which as an independent artist I can tell you is a lot better then the nothing I'm used to getting. Promo aside, people don't want to spend money on music anymore so it's time to start thinking outside the box which is what these cloud services are doing. Clearly traditional methods have failed. Stop whining about how little the artist gets per impression on these services when labels still charge breakage fees and packaging fees for digital downloads. In a nutshell...stop being stupid people, change is coming, get on board or piss off.
steveh Thursday, November 17, 2011
Music Week STOP PRESS 17th November:- Forget EMI and Google: the news item that has most hit the UK industry's nerve this week appears to be the removal of music from Spotify - which has gone nuclear since Mercury-nominated artist Jon Hopkins claimed this afternoon that he was paid under £10 for almost 100,000 streams on the service.
Niels Schroeter Thursday, November 17, 2011
Here's the problem: 750,000 streams
That's a pathetic number. The issue is quality and whether or not people actually want to hear and share what you're making. Add 3 zeros to the stream number (as 14-year-old Rebecca Black did on YouTube with "Friday", or LMFAO) and the payouts would be in the millions.
Create something that people actually want to listen to over and over again, and you'll have a business.
gaetano Thursday, November 17, 2011
Rebecca Black. Really?
That video got views because it was LAUGHABLY HORRIBLE. It has nothing to do with meritocracy, she did the OPPOSITE of making something people wanted to listen to. Someone like LMFAO that is jammed down the general public's throat via millions in pr and marketing.
Make something people want to listen to?
More like, make something unavoidable, or make something audacious (whatever that means today), or shocking or ridiculous. Make it shiny, make it visible.
BTW, Hundreds of millions of views still wouldn't get anyone paid anything substantial, especially not the artist,check your math.
Chris Duncan Thursday, November 17, 2011
Are you kidding? Hundreds of millions of views? You could retire off the income that would generate.
gaetano Thursday, November 17, 2011
At $.00029 per spin on Spotify, 100 million views will make you, wait for it.
$29,000.00 (before taxes)
This is an artist share. We don't know how much Majors who bought in actually get, or their artists for that part as it's undisclosed. But for Joe Q Music, this is what you're dealing with.
If this was your video on Youtube, under standard license and revenue agreements, you'd make a dollar for every 1000 views, which would bring you in around 100k.
Not sure where you're retiring to homeboy...
@forcemm Thursday, November 17, 2011
STHoldings labels saw 82 percent content consumed by Spotify Rdio & Napster but only 2.6 percent overall revenues
Danny @ Kudos Monday, November 21, 2011
We are a UK based distributor, of similar size to ST Holdings. However, our experience of streaming has been remarkably different.
Here is a link to our blog post on the subject;
r Friday, December 09, 2011
But...... the people who use spotify will not go and pay for these songs once they have been removed, instead they will just go and download them illegally and not pay anything for them at all. spotify is the alternative to this. i may not know much about business models but i know people like free stuff and the internet has plenty of that.