June 28, 2012 at 11:10 am

More Evidence That Streaming Can Pay: Label Earns Nearly 80 Percent of Revenue from Spotify

kalle magnusson hybris spotify

Hybris label head Kalle Magnusson says Spotify now accounts for 80 percent of his label's revenue.

When a Swede talks about Spotify, it helps to have a grain of salt nearby. The freemium streaming service seems to be something of a matter of national pride over there.

Some places, like England or Jamaica, invent major musical styles that traverse the world. Sweden produced the means with which some of the world’s most fervent music fans now listen to that music.

According to Swedish pop label Hybris, over the course of the last six months  – the same six months for which many recording artists aren’t seeing  royalties yet – Spotify’s current payouts to the label for a 2005 hit single have eclipsed what it made selling the song on CD, back when it was a top ten radio hit. According to the head of that label, this doesn’t quite represent a return to the glory days of the ’90s before the internets stole everybody’s candy, but it adds to our mounting pile of evidence (tag: $potify) that streaming music can pay.

In a blog post excerpted from Media Evolution’s “Access Over Ownership” report, Hybris head Kalle Magnusson claims the following:

  • The label’s revenue per play from Spotify has tripled in the past year.
  • For a single that was released in 2005 that was a top ten radio hit (listen below), Hybris receives more money from Spotify per quarter than it sold in the entire year after the single’s release. Keep in mind that this song is seven years old, and no longer receives heavy radio airplay or other promotion.
  • Spotify is “by far” the label’s largest source of cash, providing “almost 80 percent” of its overall revenue.
  • In addition, Spotify’s payments to the label are “increasing all the time” (something we also heard from a guy who manages the distribution of over 10,000 labels, most of them not Swedish, to Spotify and other services).
  • Four out of five Spotify-using Swedes now pay for the app. Again, some of this is a matter of national pride, and Hybris puts out Swedish music. However, the population of Sweden is just north of 9.3 million, which is about three percent of the U.S. population, so even with a much lower conversion rate here, overall payments to artists and labels from the U.S. could be as significant.
  • Perhaps even more encouraging, his data backs up our widely-circulated theory that streaming music will improve culture: “As of spring 2012, Vapnet [the band that recorded the above-mentioned single] has not released an album for four years. ‘Kalla mig’ hasn’t received a big boost, hasn’t been part of an ad campaign, or used in an awesome TV show. But it’s still a good song, and people have continued to listen to it and it’s attracted new listeners.”

We’ve focused a lot on Spotify during our investigation into how much artists are making from streaming. It’s the most popular on-demand subscription service. If you are a label, publisher, or artist with something to tell us about another service — or about how much you are making from all the streaming services combined — please let us know. We’re hoping to keep looking into how much artists are really making from streaming. Every bit of evidence, in either direction, counts.