Nobody should be surprised by this news! According to Business Insider, Spotify has been declared the second biggest source of revenue for major music labels. Apple’s iTunes is still the number one revenue, but we have to ask… for how long?
The article says that the gap is still very important, the Apple media player paid $3.2 billion to labels in 2011, and no number was given for Spotify with its 23 millions of users. However, investor Sean Parker predicted, at this year’s SXSW conference, that Spotify will probably overtake iTunes in terms of contributions to the recorded music business in less than 2 years!
I am still using Spotify for free, but many people have opted for the subscription option. It is certainly another way to listen to music, and it seems that the next generation has absolutely no problem with the idea of just streaming the music instead of owning it. The equation is very simple, many prefer listening to an unlimited amount of songs for $10 rather than downloading only 10 songs on iTunes for the same amount.
Another idea in the Business Insider article is that labels actually prefer Spotify to iTunes as the Apple application is regarded as ‘too powerful’,… too powerful because it makes you actually own the music instead of stream it? The problem will remain for artists, as Spotify will not bring significant revenue for them, except for the very big names.
Things evolve so fast in the music business, who was talking about Spotify a few years ago? Nobody, and now this is the biggest story around. Still, there are some people, like digital music entrepreneur Michael Robertson, who think Spotify will never be profitable! So who knows what will happen in 2 years?