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Streaming Contibutes 25% to Warner Music Group's Digital Bottom Line

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It's no secret that streaming services like Spotify and Pandora account for relatively little of an artist's revenue stream. In fact, yesterday we showed you how Zoe Keating earned a mere $300 from Spotify during a five month period, compared to $45,000 from iTunes sales in the same time-frame. However, streaming services do seem to be doing well for labels - namely Warner Music Group. The company has said that streaming services contributed to 25% of the digital revenue that its recorded music group saw last quarter.

Warner defines “streaming" revenue as money it gets from subscription services like Spotify and Rhapsody, Pandora, Sirius and Clear Channel, but does not include cloud services from Apple or Amazon. 25% of Warner's digital music revenue works out to be about $54 million, or about 8% of Warner's total revenue for the period, as reported by AllThingsD. Warner also said that after one nets out the effect of currency fluctuations, the increase in digital sales was bigger than the decrease in physical sales.

This is good news for Warner and other large labels because as streaming revenue continues to grow (marginally, but they are growing), they do not seem to be cannibalizing traditional digital sales from retailers like iTunes or from direct-to-fan sales from artists themselves.

This has always been a big concern of a number of artists and labels who refuse to put their catalogs up on streaming services, particularly Spotify. However, even some of the most outposken of them have seemingly given in to the promotional power and consumer demands of these services.


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