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Over 200 labels abandon streaming music and their future

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Over 200 record labels hastily abandon Spotify and other streaming services after a report by NPD Group says streaming music is damaging to record sales.

Panic button (flickr attribution)
Panic button (flickr attribution)

NPD Group and NARM (the Music Business Association) recently conducted a study, which concluded that streaming music is damaging to record sales. That information has now caused distributor STHoldings to withdraw all of its music content — that's over 200 labels' worth — from Spotify, Simfy, Rdio, and Napster. STHoldings reported that only four of its labels said they wanted to continue streaming their content. It's a case of confirming exactly what some publishers want to hear: cheaper, user-friendly streaming services might be encroaching on the cushy sales models of years past. The reaction is reminiscent of the industry's bitterly reluctant adoption of the mp3 format in the heyday of CD supremacy, and we all know how that turned out.

Despite this speed bump, the music industry does seem to be growing more receptive to streaming services, considering that you can stream a lot of popular music for free these days through legitimate means. We'll have to wait and see if any other labels decide to follow the doomsayers, but with most of the major labels contributing to streaming services, we're betting that the future of music distribution is already underway.

Photo credit: star5112 (Flickr)