More than 200 record labels have ejected from Spotify and other music streaming sites. The labels have yanked their catalogue from Spotify, Simfy, Rdio and Napster in protest at negligible royalties, a loss of sales elsewhere, and the devaluing of music, saying goodbye with a defiant "F*** Spotify".
The 200+ indie dubstep, grime and electro labels represented by distribution network ST Holdings believe streaming services cut into other outlets for their music, as listeners choose to stream music instead of buy CDs or full-priced downloads. And although streaming is a promotional tool and earns the labels some cash, it's nowhere near enough to justify the loss of money from not selling a CD to each listener.
On a more ideological note, the labels believe that streaming presents music as a low-value commodity, a disposable thing with little or no value. One of the labels added, "Let's keep the music special, f*** Spotify."
Although the major labels -- and therefore, most major acts -- aren't going anywhere, this does mark something of a backlash against streaming services. Recently, Coldplay, one of the biggest bands in the world, decided not to release their album Xylo Myloto through Spotify, with a similar move by Adele, the artist with the biggest-selling digital album of all time.
Proponents of streaming music argue digital music is a tool for discovering new artists, after which the newly converted fans will supposedly rush to buy an album, go to a gig or buy merchandise. But it seems many listeners now stream music as an alternative to buying, rather than as a precursor. And a band cannot live on merch alone -- even successful gigs won't keep a band in guitar strings and hookers unless they reach a level of relatively sizeable venues.
Unfortunately, Spotify's revenue deals are shrouded in mystery, with four major labels having a reportedly significant stake in the service. Ultimately, as music-lovers and technology fans we want to listen in the fastest, easiest way possible and pay for our music safe in the knowledge that it will go to the people who made the music -- but with the music industry in a transitional stage, it's hard to say if that's truly happening.
The music industry needs to work out how to make money from online service, because it's not going away: just this week, Google Music, BlackBerry Music and Apple's iTunes Match all launched in the US.
How have your listening habits changed in the digital age? If you listen to music online, how do you support the artists you love? Tell us your thoughts in the comments, on our Facebook page, or at Google+.