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Spotify is Now Generating More Royalties Than iTunes in Europe

by Killian Bell | November 5, 2014November 5, 2014 5:02 am PDT

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In Europe, Spotify is now generating more royalties for its artists than iTunes for the first time ever. In fact, during the last quarter, revenues from the popular music streaming service were 13% higher on average than those from iTunes following a drop in music downloads.

The figures come from Kobalt, a company that helps collect music royalties on behalf of thousands of popular artists, including “half of this week’s Billboard Top 10” and the likes of Bob Dylan, Macklemore and Ryan Lewis, Lenny Kravitz, and Maroon 5.

They reinforce the notion that music lovers would much rather pay a monthly fee to stream all the tracks they can listen to rather than buying and owning individual tracks or albums.

The rise in streaming popularity is quite incredible, but it’s a recent phenomenon, Kobalt says. Two years ago, less than 4% of the company’s global publishing income came from streaming — now it’s at 10%. Just two quarters ago, iTunes generated almost 60% of Kobalt’s European publishing income, while now it’s less than 50%.

In comparison, Spotify was generating just over 40% of the publishing income in Q3 2013, while now it accounts for more than half of it.

“Spotify overtaking iTunes in Europe is an important new milestone in streaming,” Kobalt CEO Willart Ahdritz told TechCrunch. “The music industry’s infrastructure is failing them, unable to efficiently account for the enormous volumes of data from digital transactions.”

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iTunes is still a hugely successful business for Apple, of course, and despite a decline in music sales, it still saw $300 million in growth last quarter to bring total sales to $4.6 billion. That’s largely thanks to an ever-increasing demand for iOS apps.

But the Cupertino company is already looking at ways in which it can solve this problem. Recent reports have claimed that Apple is working to integrate the music streaming service it acquired from Beats into iTunes to provide a greater experience for those already familiar with the ecosystem and indeed its immensely popular iOS devices.

Kobalt TechCrunch

Killian Bell

Killian Bell is a 20-something technology journalist based in a tiny town in England. He has an obsession with that little company in Cupertino...