Found a great article here that breaks down the actual revenue streams flowing to artists from digital sales and streaming sites. The actual payment per play from a service like Spotify seems shockingly low in comparison to the revenue generated from a sale on iTunes. In fact, many indie bands have reacted strongly to the article, suggesting Spotify profits off the use of indie acts, while not adequately compensating them.

To me, the real issue here is one of volume, and understanding the changing consumption habits of music fans. Less and less music buyers want to ‘own’ their music, choosing instead to merely access it in the cloud, at their leisure. What is the ‘value’ of granting such access? Clearly it must be a lot less than 99 cents, or Spotify would have no business model. And while the per-play payout put forth in the above article seems low, the more people embrace streaming services like Spotify, the more revenue it will obviously generate. If we are truly moving to a cloud-only music world, we would be looking at millions of plays an hour…which could really start to add up for acts that are somewhat ‘visible’.

In the end, we are left with the same music industry conundrum: the big acts keep getting bigger, and everyone else fights for recognition.

- Kurt Dahl, Sept 29, 2011