Spotify gets canned by over 200 labels, citing detriment to music industry

Over 200 labels falling under distributor STHoldings have pulled their music loot from streaming music services believing the new business model is hurting, not helping, the industry.

The U.K. based indie label distributor confirmed the move in a statement yesterday saying, “Despite these services offering promotion to many millions of music listeners we have concerns that these services cannibalise the revenues of more traditional digital services.”

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STHoldings is pulling its labels from Spotify, Rdio, Napster, and Simfy.

Streaming music services have seen themselves as the way back to a pay-for-play music industry, which has been utterly taken over by pirated music. This ironically started with Napster, now a streaming music service of its own soon to be assimilated into Rhapsody, when it debuted in the late 1990’s. Now, sites like The Pirate Bay and Bit Torrent have made it easy for people all over the globe to access and download any music content they want. The streaming model, however, has infiltrated those black market users with guilty consciences by offering reasonable prices for monthly access to most of the music they want. It plays to the people who don’t want to shell out $1-2 a song on iTunes.

Obviously, not all artists or labels agree with these new models, however.

“They provide poor revenue and have a detrimental affect on sales,” STHoldings’ statement continues, “Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity. Quoting one of our labels “Let’s keep the music special, f*ck Spotify”

If not for money, it seems STHoldings’ labels want their art to be just that, appreciated as art and not a part of a solution to piracy. As Wired points out, there have been rumors of artists receiving tiny cuts of their music’s profit. One instance cited a $167 check to Lady Gaga for over a million plays of her songs, though this was refuted.

“Artists can — and do — receive very substantial revenues from Spotify, and as Spotify grows, these revenue streams will naturally continue to grow,” a Spotify spokesperson told Wired. “We do however hope that they will change their minds, as the Spotify model is adding, and will continue to add, huge value to the music industry. Right now we have already convinced millions of consumers to pay for music again, to move away from downloading illegally and therefore generate real revenue for the music business.”

[Daniel Ek photo via Fortune Live Media/Flickr]