Although Spotify has shown strong signs of hitting the ground running in the U.S. since its launch here last month, not all labels are pleased.
Indie metal-focused label group Century Media is one such outfit, announcing today its plans to pull all its content from the subscription music service. This includes associated labels InsideOutMusic, Superballmusic, Ain't No Grave Records, Hollywood Waste and People Like You.
The issue, according to a statement released by Century Media, is over the per-stream revenues earned via Spotify.
"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," reads the statement. "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." The full statement is available via the label's website.
The label group instead plans to use Spotify in a more targeted way, posting samplers of its artists on the service to take advantage of the promotional and marketing benefits it might provide, apparently in hopes of driving interested fans back to other retailing methods.
This isn't the first time Spotify has taken hits for what labels and artists feel are paltry payouts. To be fair, it's a complaint commonly leveled at all subscription streaming services, not just Spotify. But Century Media is only pulling its music from Spotify, while allowing it to remain on other subscription music services like Rhapsody, MOG and Rdio.
The issue is how little--from a per-stream perspective--artists make from streaming music services compared to digital downloads. Part of it has to do with the amount Spotify pays labels, but another part has to do with how labels compensate artists.
The issue got headlines last year when reports surfaced that Lady Gaga earned only $167 from streams of her hit "Poker Face." The figure was later found to be inaccurate, but the charge stuck. It's one reason why there are so many noticeable gaps in Spotify's catalog. (Much of Bob Dylan's back catalog is missing, for example, and there are holes in many major catalogs.)
Given that pretty much any Spotify development is fodder for headlines, it may be more beneficial (at least in the short run) for a smaller label like Century Media to come out publically against Spotify and enjoy the resulting attention such a move brings, than just leave its music on the service.
But it's not clear how removing music from Spotify helps the label or its artists out financially. The assumption is that by removing music from Spotify, fans will have to obtain the label's music from other paid services like iTunes or actually buy a physical CD. But the counter-argument is that fans could simply find any of its repertoire on P2P services -- from which the labels would make even less.