Spotify Continues to Lag Behind iTunes as Source of Record Label Revenue
According to Business Insider
, Spotify, the on-demand free and subscription-based music streamer is reportedly the second largest source of revenue for the world’s major record labels, lagging behind Apple’s iTunes.
Although Spotify is taking the number two spot in the market, it continues to lag far behind Apple’s market-dominating iTunes. Apple paid out an estimated $3.2 billion to music publishers in 2011, which is in line with the numbers given out during the company’s quarterly conference calls. The Cupertino California company was even rumored to be in talks to buy Spotify at one point, but the speculation didn’t come to fruition.
Spotify became a popular music service in Europe after being found in 2006, crossing the ocean to launch in the U.S. in July 2011. At the time of its U.S. launch, the company had a catalog of 15 million songs but the number grew to 18 million and continues to grow by 10,000 to 20,000 tracks per day. According to recent estimates from analytics firm AppData, 23 million people used Spotify last month. Furthermore, CEO Daniel Ek mentioned there are over 10 million users in the U.S. alone over 3 million of whom are paying subscribers.
Spotify Director, Napster co-founder, and former Facebook president, Sean Parker, alleged that Apple attempted to keep the service out of the U.S. as it directly competes with iTunes, at the D10 conference in May. At SXSW, Parker said the following: "If we [Spotify] continue growing at our current rate in terms of subscriptions and downloads, we’ll overtake iTunes in terms of contributions to the recorded music business in under two years.”
We’ll have to wait and see if Parkers predictions come true but as of right now, although Spotify does seem to be doing well, it has a long way to go to even come close to the success of iTunes.
Source: Business Insider