Electronic music distributor STHoldings has pulled all its distributed labels from streaming music services Spotify, Simfy, Rdio and Napster. "Despite these services offering promotion to many millions of music listeners we have concerns that these services cannibalize the revenues of more traditional digital services," the company said. "These concerns are confirmed in our own accounts and a recent study by NPD Group and NARM."
The NPD NARM study concluded that music streaming and other free or low cast online music services "are more likely to cause listeners to continue to stream songs, rather than buy them". To date just 4 of the 238 labels distributed by STHoldings have asked to remain on the streaming music sites. The reaction of one of their labels reaction was, “Let’s keep the music special, fuck Spotify”.
Distributor Offers Some Scary Stats
Several other indie labels and artists have left Spotify in recent weeks, but this is the most extensive exodus to date. UK based STHoldings is also the first to share hard data:
- In the third quarter of 2011 – the first full quarter that the distributor supplied content to these services - ST’s digital revenue fell for the first time in its history, down 14%.
- iTunes revenue in the same quarter fell 24%.
- Spotify, Simfy, Rdio and Napster accounted for 82% of all ST tracks "consumed" in Q3 but only 2.6% of that quarters Q3 revenue.
- Spotify paid £2,500 or $3376 USD for 750,000 streams in the quarter.
"As a distributor we have to do what is best for our labels," states the company. "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 looses it’s specialness by it’s exploitation as a low value/free commodity."