Over 200 Record Labels Pull Out of Spotify, Others

Written by John Ponio    Friday, 18 November 2011 17:39

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Over 200 record labels, under the holding company STHoldings, have pulled out of online music streaming services such as Spotify, Napster, Simfy, and Rdio. Their reason is a recent study done by NPD Group and NARM (you can read it as reported by Digital Music News here) that claims streaming music services are detrimental to revenue. STHoldings said in a statement, "As a distributor we have to do what is best for our labels. The majority of which do not want their music on such services. They provide poor revenue and have a detrimental affect on sales. Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity." In response to the study and the action, Spotify said, "Along with NARM, we’re confused by the way this research has been interpreted, since Spotify was not referenced anywhere in the research questionnaire and had only been live in the US for a matter of days when the study was carried out. The deck also makes absolutely no reference to Spotify and certainly does not draw any conclusions about Spotify, such as those made in the article." We'll see how this one plays out.