Business News Digital Labels & Publishers

Spotify royalties top iTunes income for Kobalt songwriters in Europe

By | Published on Wednesday 5 November 2014

Spotify

The boss of music rights and label services group Kobalt will confirm at a conference in Dublin tomorrow that the songwriters it represents in total collected more from Spotify than iTunes in the first quarter of this year, 13% higher in fact. Which is a neat stat for fans of the ‘iTunes is dying, Spotify is booming’ story arc.

Kobalt CEO Willard Ahdritz will go on to say that while in the third quarter of 2013 the publishing income from iTunes for its writers was 32% higher than from Spotify, in quarter four the Apple download service’s lead was down to 8%, with Spotify outperforming iTunes at the start of this year.

It’s no secret that streaming service income is booming for the labels, and that in some Scandinavian markets it has become the dominant revenue stream. And in a number of other countries iTunes revenue has now peaked. Though Kobalt’s figures are interesting partly because they say that Spotify has outperformed iTunes Europe-wide, and partly because they offer a spotlight on the royalties earned by music publishers and songwriters rather than labels and recording artists.

The licensing of publishing rights (so the copyright in lyrics and compositions, as opposed to recordings) to digital services is arguably even more complicated than with the labels’ recording rights, not least because with iTunes it’s all about the so called ‘mechanical copy’ rights, while streaming is a combination of ‘mechanical’ and ‘performing’ rights. Throw in the complications of multi-territory collective licensing, and it can be pretty hard to work out what’s going on. While plenty of songwriters bemoan that the cheques that pop out the other end are pretty disappointing.

Though for Kobalt, the fact that streaming is becoming a serious revenue stream is important news because of the complications about the way song rights are licensed to such services, Ahdritz reckoning that his company’s rights management technology and services outperform his rivals, ensuring – he would argue – songwriters repped by Kobalt get more clarity and more money from the streaming domain. Often 30% more, Ahdritz will claim at the Web Summit in Dublin tomorrow.

Of course, it’s hard to say that stats relating to 6000 songwriters in one three month period in Europe gives us any insight into market-wide trends, other than the one we already new – streaming is becoming a serious revenue stream – though the Kobalt stats are interesting nonetheless.

Says Ahdritz: “Spotify overtaking iTunes in Europe is an important new milestone in streaming. What Kobalt offers to artists, songwriters, and publishers has become more important than ever as the music industry’s infrastructure is failing them, unable to efficiently account for the enormous volumes of data from digital transactions. We are fixing those clogged pipes and, for Kobalt clients, the money is flowing. And happy music creators means the whole ecosystem will flourish”.



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