Century Media Leaves Spotify Due To Revenue Erosion
August 11, 2011 at 3:21 PM (PT)
The independent labels under the umbrella of CENTURY MEDIA have decided to pull their product from SPOTIFY because it believes the online music service is eroding CD and vinyl sales and its streaming compensation is woefully inadequate.
On its website, the company wrote: While everyone at the label group believes in the ever changing possibilities of new technology and new ways of bringing music to the fans, CENTURY MEDIA is also of the opinion that SPOTIFY in its present shape and form isn’t the way forward. The income streams to the artists are affected massively and therefore that accelerates the downward spiral, which eventually will lead to artists not being able to record music the way it should be recorded. Ultimately, in some cases, it will completely kill a lot of smaller bands that are already struggling to make ends meet.
Physical sales are dropping drastically in all countries where Spotify is active ... This is about survival, nothing less and it is time that fans and consumers realize that for artists it is essential to sell music to keep their heads above water
"Physical sales are dropping drastically in all countries where SPOTIFY is active. Artists are depending on their income from selling music and it is our job to support them to do so ... This is about survival, nothing less and it is time that fans and consumers realize that for artists it is essential to sell music to keep their heads above water.
SPOTIFY responded to CENTURY MEDIA's move by issuing a statement that read: "We are sorry that CENTURY MEDIA have opted not to offer its music to their fans through SPOTIFY ... SPOTIFY was launched out of a desire to develop a better, more convenient and legal alternative to music piracy. SPOTIFY now monetizes an audience the large majority of whom were downloading illegally (and therefore not making any money for the industry) before SPOTIFY was available.
"SPOTIFY is now generating serious revenues for rights holders; since our launch just three years ago, we have paid over $100 million to labels and publishers, who, in turn, pass this on to the artists, composers and authors they represent. Indeed, a top Swedish music executive was recently quoted as saying that SPOTIFY is currently the biggest single revenue source for the music industry in SCANDINAVIA."
However, the L.A. TIMES reported that Classical and Jazz label MODE RECORDS Founder BRIAN BRANDT posted an essay on NEWMUSICBOX.ORG that cited some SPOTIFY figures from JUNE: "A big individual seller that month, by composer LUCIANO BERIO, was streamed 1,326 times through SPOTIFY; our income $4.18. So, we earn about 1/3 of a penny per stream. And these meager amounts should be split with the artists and composers."