AppleInsider Staff
In what could be a bellwether for the global recording industry, royalty payments from streaming service Spotify have reportedly overtaken earnings from Apple's iTunes music store in Europe, a drastic shift from only last year.
Kobalt Music Publishing, a company that represents and collects royalties on behalf of music makers in Europe, says its customers brought in an average of 13 percent more revenue from Spotify than iTunes over the first quarter of 2014, reports The Wall Street Journal.
Kobalt's customer list numbers near 6,000 and includes big-name acts like Bob Dylan, Dave Grohl, Paul McCartney, Maroon 5 and Max Martin, among other chart-toppers.
The data shows an abrupt trend away from music downloads and toward streaming. For example, royalties from iTunes outpaced Spotify by 32 percent during the third quarter of 2013, but that number dropped to 8 percent in the following three-month period, Kobalt notes. The company told TechCrunch that revenue from streaming services tripled over the past two years.
"Spotify overtaking iTunes in Europe is an important new milestone in streaming," said Kobalt CEO Willart Ahdritz. "The music industry's infrastructure is failing them, unable to efficiently account for the enormous volumes of data from digital transactions."
While the statistics are limited to one company from one market, the data is in line with a previous Journal report saying overall iTunes music sales were down 13 to 14 percent for the year as of late October.
For the fourth fiscal quarter of 2014, Apple announced iTunes earnings of $5.4 billion, up 22 percent from the same three-month period last year. For 2014, Apple reported a total of $10.2 billion in net iTunes Store sales compared to $9.3 billion over the course of 2013. The numbers combine revenue from other software and services, however, including the lucrative iOS App Store.
Apple rolled out its own music streaming service in iTunes Radio, which launched in 2013 alongside iOS 7. The Cupertino tech giant is also rumored to be working on a rebranding of Beats Music following a $3 billion acquisition that included the firm's headphone division in August.
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61 Comments
Obviously Apple saw this coming.
$1.29 songs are killing iTunes. Labels now pay for being too greedy.
Beats + iTunes Radio + Trent Renzor Secret Project = iTunes 2.0 (I know we are on v12 right now).
What is on the Apple anvil is a significant overhaul of the music service/ store.
The only thing is that they have to roll out their streaming service to other countries as well.
I felt this one coming - once I used Spotify it changed how I thought of music. Not something I listen to over and over like a toy I bought, but lots of new music, like cable. I went through all of the albums I could never afford. Listened to a channel for a particular mood I'm in. Listened through the billboard top 20 each week. My friends think I'm the musically inclined one all of a sudden, cause I know all the newest songs. When I saw how good Spotify was, I couldn't believe Apple wasn't already doing this. When iTunes radio came out, I realized they weren't interested in changing their profitable business, only keeping people from switching to Spotify. Now, they're losing ground. I'll be interested to see if the Apple designers, engineers, and ad machine can erase a several year head start. I wouldn't be surprised.
I felt this one coming - once I used Spotify it changed how I thought of music. Not something I listen to over and over like a toy I bought, but lots of new music, like cable. I went through all of the albums I could never afford. Listened to a channel for a particular mood I'm in. Listened through the billboard top 20 each week. My friends think I'm the musically inclined one all of a sudden, cause I know all the newest songs. When I saw how good Spotify was, I couldn't believe Apple wasn't already doing this. When iTunes radio came out, I realized they weren't interested in changing their profitable business, only keeping people from switching to Spotify. Now, they're losing ground. I'll be interested to see if the Apple designers, engineers, and ad machine can erase a several year head start. I wouldn't be surprised.
I guess that's why Apple acquired Beats. I even let my iTunes Match subscription expire because Spotify has all the albums that I ever uploaded onto iTunes Match and Spotify seems to stream faster than Apple's cloud in Hong Kong.