Streaming services lose over 200 smaller music labels

Spotify and other online streaming music download services have risen in popularity among consumers in recent times, however, it looks like at least one company doesn't care for this kind of business model. VentureBeat reports that UK-based STHoldings -- a music distributor -- has pulled music tracks that belong to the over 200 labels they own from Spotify, as well as other similar streaming services like Rdio, Napster, and Simfy.

The reason? STHoldings believes that while Spotify and other companies do allow its music to be offered to millions of consumers, it adds, "[...] we have concerns that these services cannibalize the revenues of more traditional digital services." It added, "They provide poor revenue and have a detrimental affect on sales." The statement also includes a quote from one of STHoldings' unnamed music labels which bluntly said, "Let’s keep the music special, f*** Spotify."

In its own statement, Spotify refuted STHoldings' claims, saying, "Artists can — and do — receive very substantial revenues from Spotify, and as Spotify grows, these revenue streams will naturally continue to grow." It added that it hoped that STHoldings would change its mind on this matter, saying, "Right now we have already convinced millions of consumers to pay for music again, to move away from downloading illegally and therefore generate real revenue for the music business."

Streaming music services are certainly an easy way to listen to music you like as well as discover new music artists. However, such subscription services are subject to the music labels' support. If they decide to no longer provide their properties to Spotify that could leave such businesses in the dust in the long run.

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Oops, premature post. In any event, they are not keen on Spotify because they probably make a disproportionately low amount of money on sales compared to other channels where they are doing quite well, like Beatport, Juno, Trackitdown, etc. It's not really surprising that a niche player can't reap the same benefits as a global outfit like EMI, Sony/BMG, etc. There's no greed involved at all since most of these artists are lucky to sell 1000-2000 copies of each release (mostly singles). Stop jumping to conclusions and posting nonsense just because it's fashionable to rag on music labels these days.

tbcarey said,
Oops, premature post. In any event, they are not keen on Spotify because they probably make a disproportionately low amount of money on sales compared to other channels where they are doing quite well, like Beatport, Juno, Trackitdown, etc. It's not really surprising that a niche player can't reap the same benefits as a global outfit like EMI, Sony/BMG, etc. There's no greed involved at all since most of these artists are lucky to sell 1000-2000 copies of each release (mostly singles). Stop jumping to conclusions and posting nonsense just because it's fashionable to rag on music labels these days.

Exactly.

What a bunch of clueless jokers. ST Holdings supports some pretty seminal labels within niche electronic music genres. They were never a label that sold CDs at 'The Wall', but rather one of the largest vinyl distribution companies in the world (prior to the decline of vinyl sales within the DJ scene in the past 5-10 years)

Julius Caro said,
i think services like spotify have got people to actually pay again, as opposed to nothing.

I 100% agree. $10 a month to stream on my phone is nothing at all. But pull more labels out, I'm happy to save my $10/month.

"[...] we have concerns that these services cannibalize the revenues of more traditional digital services."

You're damn right they're cannibalising your revenues. While you and the rest of the litigating "traditional media" dinosaurs were stuck trying to sue people, other companies like Spotify and the like came along and saw room for improvement, and innovated where you refused to. Now you're paying the price (literally) for being so against new media.

You can't stand and complain about rampant piracy, and then also complain when services come along that reduce piracy, and not want to be involved.

Majesticmerc said,

You're damn right they're cannibalising your revenues. While you and the rest of the litigating "traditional media" dinosaurs were stuck trying to sue people, other companies like Spotify and the like came along and saw room for improvement, and innovated where you refused to. Now you're paying the price (literally) for being so against new media.

You can't stand and complain about rampant piracy, and then also complain when services come along that reduce piracy, and not want to be involved.

Read between the lines. They want more money for their ****ty artists.

I have no heard of any of those labels. So they can take their selfishness and put it where the sun doesn't shine for all I care. They are just greeding and in the end, it will be their loss.

jesseinsf said,
Why buy it when you can hear it on youtube. They need to rethink how music is heard on youtube.

Take one of my favourite bands "Neuroticfish". They have a few songs on youtube, but not many.

jesseinsf said,
Why buy it when you can hear it on youtube. They need to rethink how music is heard on youtube.

YouTube..... For music..... Seriously.... HTC's like listening to old 64k mp3's

If a company owns the 200 other labels, are they really small, independent labels? It sounds like just another media congolmerate to me, and they will reap what they sow.

GreyWolf said,
If a company owns the 200 other labels, are they really small, independent labels? It sounds like just another media congolmerate to me, and they will reap what they sow.

Picking a handful of the represented labels and looking over their releases: it seems like yes, they really are tiny independent record labels. Of the dozen or so I checked, none had more than 50-albums (including singles) released. For comparison: Trent Reznor of Nine Inch Nails fame is credited with more than 50 albums (including singles).

These are likely small production companies that do production runs of a few thousand records at a time for a handful of artists. I'm not about to count individual artists but I'd be surprised if the total catalog consisted of more than a couple of thousand albums.

Many are much smaller than what most in the west would consider the threshold for "small independent record labels". Many of my favorite bands are or were signed to "Fat Wreck Chords" which represents ~40 fairly popular punk bands including NoFX and Mad Caddies today and some bands that have gone on to major-label success (Rise Against is probably the most well known). They don't represent bands that have multi-platinum albums every other year, it's a different kind of business from what you'd expect from manufactured pop bands and American Idol winners.

Nuclear Blast records, a European label specializing in various metal sub-genres has a much larger roster of artists and almost certainly a much larger library of music (Blind Guardian alone has a discography larger than half a dozen of the STHolding's record labels combined catalog) and they're still considered independent too. Any particular band has an order of magnitude more sales than STHoldings combined catalog (ie: Nightwish has ~7m records sold world wide)

The labels owned by STHoldings are more inline with G7 Welcoming Committee which represents bands that are unlikely to sell more than 50k albums on a good run and typical shipments are going to be more like 5k/year. The sorts of artists you can still see playing playing college bars and music festivals. That's not to say the music is inherently better (or worse) than what you find on the radio represented by UMG or EMI - just trying to put into perspective the size of the businesses we're talking about.

Edited by the evn show, Nov 20 2011, 10:28am :

evn. said,

The labels owned by STHoldings are more inline with G7 Welcoming Committee which represents bands that are unlikely to sell more than 50k albums on a good run and typical shipments are going to be more like 5k/year. The sorts of artists you can still see playing playing college bars and music festivals. That's not to say the music is inherently better (or worse) than what you find on the radio represented by UMG or EMI - just trying to put into perspective the size of the businesses we're talking about.

Close, but not quite a valid comparison. Most of the labels represented by ST Holdings are independently-owned, as ST Holdings is only a distribution company. The labels are often started by a single artist within one of the electronic genres in order to gain maximum revenue from what little sales they make; most of their income is in fact from DJing live at large events on a regular basis. They're not really akin to 'college bar bands' since the vast majority of them can be seen playing out at the world's largest clubs and festivals.

However, since the labels are all self-promoting (ST Holdings only performs minimal promotion online) and they come from genres that are not well-promoted and not designed to attract a mainstream audience, their sales figures in general are always going to be much lower. That's probably one of the reasons the artists are in support of this move as well -- they need to protect what little revenue they do make on digital sales through the web, and Spotify probably offers them very little revenue in return for each release when compared to the money they would otherwise make.

Sounds like they want it like the way it was. Going to The Wall and spending $18 for a CD. Change with the times you greedy SOB's.

Get a little bit of money from streaming now, or jump ship ... and watch music piracy increase?

Not a smart decision!

Raa said,
Get a little bit of money from streaming now, or jump ship ... and watch music piracy increase?

Not a smart decision!

Exactly. I'm happy with Spotify and Netflix. But when you keep hearing about labels pulling out, people will go back to their old methods

Neillithan said,
Man that sucks. Hope this doesn't affect rdio

</facepalm>
has pulled music tracks that belong to the over 200 labels they own from Spotify, as well as other similar streaming services like Rdio, Napster, and Simfy.

shadodemon said,
If artists could come up with better music, why do I want to hear about them banging girls and how much money they have?

Stop listening to garbage music called "Rap" then

KomaWeiss said,

Stop listening to garbage music called "Rap" then

Listen to the old school rap and hip-hop from Cypress hill, Dr Dre, Bone Thugs-n-Harmony, Coolio, Warren G, TLC, Da Brat, etc..... that era was the best for that kinda music! Not hip-hop is this watered down crap we got today. Cypress Hill was the **** man. Love it. I wish we had more of that kinda rap and hip-hop. I quit listening to that Genre when the cool stuff went away.

Why didn't you mention any artists that come under this idiot company? I'd like to know what exactly was removed from Spotify.

jasonon said,
oh nobody has heard of any of them, so who really cares?

if you are in their shoes you will care... you dont care because you dont give a **** about them...
big companies get paid because they get 10 million for a service worth of 15 million and they dont worry because 5 million is not a lose but 10 million is a profit....
for small companies they need some revenue to keep them running.

still1 said,

if you are in their shoes you will care... you dont care because you dont give a **** about them...
big companies get paid because they get 10 million for a service worth of 15 million and they dont worry because 5 million is not a lose but 10 million is a profit....
for small companies they need some revenue to keep them running.

Yeah and when they remove all their songs from streaming services they get nothing, don't cut off your nose to spite your face.

TheLegendOfMart said,

Yeah and when they remove all their songs from streaming services they get nothing, don't cut off your nose to spite your face.

yes, i agree....but is fighting bad??? they are fighting for better revenue by cutting the service... hoping that they will get a good revenue..... what would you do???

TheLegendOfMart said,

Yeah and when they remove all their songs from streaming services they get nothing, don't cut off your nose to spite your face.

But it's their artists and they can do what they want for them. Are you seriously suggesting that they should be grateful for the scraps Spotify gives them? In this case, removing it entirely from Spotify will mean that true fans of them will have to buy the tracks from other legit services, so therefore giving more money to them instead of listening to the artists' tracks via Spotify and giving them scraps for the priviledge.

testman said,

But it's their artists and they can do what they want for them. Are you seriously suggesting that they should be grateful for the scraps Spotify gives them? In this case, removing it entirely from Spotify will mean that true fans of them will have to buy the tracks from other legit services, so therefore giving more money to them instead of listening to the artists' tracks via Spotify and giving them scraps for the priviledge.

The whole point of these services is for people to try music they wouldnt normally buy.

If these guys remove their tracks from the services like they have done, only 'true' fans will buy the music.

So yes, they should be greatful instead of spiteful.

TheLegendOfMart said,

The whole point of these services is for people to try music they wouldnt normally buy.

If these guys remove their tracks from the services like they have done, only 'true' fans will buy the music.

So yes, they should be greatful instead of spiteful.

doing this also reduces the promotion and discoverability of thier tracks.... how are others gonna hear of thier artists if no-one promotes them.....?

this is what ****ses me off about record labels. they are biting the hand that's feeding them. these services promote artists in better ways than a 30 second sample on itunes ever will. these services make artists bigger and better.

most labels only officially promote select artists. the rest have to desperatly promote themselves, often out of thier own pockets. they pay for tours, they arrange photoshoots and deals, however the labels often restrict where they can tour and what they can do like how Lasgo got screwed over by thier label big time. They bullied Evi Goffin into leaving even! (I miss Evi!!!!)

Also I really hate when they pull Anime Music Videos off youtube. I've discovered so many new artists that way and it makes me like them more. The labels should embrace that instead of hating it. AMVs are the cause of some artists becoming popular. Most labels only shove the artists we allready know down our throats, yet thier new artists never get any "official" promotion. Most of thier artists are discovered through services liek spotify, etc or fan works like AMVs, unoficial music videos set to movies or tv shows, stuff like that. the labels ought to be happy that other people are promoting thier artists and should hire some of these people to be music video directors if they do a damn good job.