Spotify royalties have passed iTunes for European musicians, report says

Apple may want to queue up a good blues playlist on iTunes.

In a report released today at the Web Summit in Dublin, music publisher Kobalt said that for the first time royalties collected by its European musicians from Spotify have eclipsed the royalties they received from iTunes.

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Kobalt reported that royalties from Spotify’s streaming service in the first three months of 2014 were 13% higher than those received from digital iTunes downloads. Just six months earlier, in Q3 2013, those artists received 32% more from iTunes. In Q4 2014, iTunes’ lead over Spotify had shrunk to 8%, according to Kobalt.

The numbers are the latest sign of the changes sweeping the music industry as consumers continue to embrace streaming and subscription services and turn away from digital downloads. It’s also an indication of iTunes’ growing struggles and the challenges Apple faces in trying to remain relevant in a digital music industry it once helped pioneer.

“Spotify overtaking iTunes in Europe is an important new milestone in streaming,” said Willard Ahdritz, founder and chief executive of Kobalt, in a press release.

While Kobalt’s numbers don’t cover the entire music industry, the London-based company can be seen as a barometer of sorts. Kobalt represents more than 6,000 songwriters and artists, a stable that includes half of this week’s Top 10 Billboard songs and albums plus the top three albums in the official UK Album Chart.

Around the globe, Kobalt reported that streaming revenues for its musicians are now 10 percent of income, up from three percent in 2011.

The latest numbers are not entirely shocking. Apple recently acknowledged that iTunes music sales declined in the fiscal year 2014. And of course Apple bought Beats Electronics earlier this year, in part to get its Beats Music streaming service.

Several reports have indicated that Apple plans to fold the Beats Music streaming service into iTunes next year.