It has been roughly one month now since Spotify has been available in the U.S. The service has so far met with great reception from users as the future of music delivery. However, there are signs now that may not be the case, at least where some industry professionals are concerned.
Spotify is a music service that has been widely available in Europe since 2008 but has just recently made its debut in the United States, which gives the user the ability to stream any song for free right on their desktop whether they already have it in their library (on their hard drive) or not.
Spotify also offers a premium service that gives users access to services such as streaming to their mobile phone and higher bitrate files, but the premium service is not required. Without paying a monthly fee, Spotify inserts advertisement to generate its revenue, leaving most of its functions, features and, most importantly, vast library of songs available for free.
However, the nature of Spotify’s free service seems to be leaving some of the smaller labels out in the cold. According to Helienne Lindvall of The Guardian, "indie labels...as opposed to the majors and Merlin members, receive no advance, receive no minimum per stream and only get a 50% share of ad revenue on a pro-rata basis." That’s quite different than the deal Spotify has in place with the major labels.
One smaller label here in the U.S. has taken umbrage to the preferential treatment and have decided to pull almost their entire catalog from Spotify. Century Media and their affiliates have decided to pull everything from the service. Century — known for being the label of such metal/hard-rock bands as Lacuna Coil, God Forbid, Nevermore, Moonspell, Nightwish, and Strapping Young Lad, among others — cites a drastic drop in record sales in the areas where Spotify has launched as the reason for their action.
In its statement about the move, Century cited a pretty good reason for their decision: “While everyone at the label group believes in the ever changing possibilities of new technology and new ways of bringing music to the fans, Century Media is also of the opinion that Spotify in its present shape and form isn’t the way forward. The income streams to the artists are affected massively and therefore that accelerates the downward spiral, which eventually will lead to artists not being able to record music the way it should be recorded. Ultimately, in some cases, it will completely kill a lot of smaller bands that are already struggling to make ends meet.“