Spotify, one of the giants in the music streaming industry has once again suffered yet another setback as STHoldings, a music distributor that focuses on techno, dubstep, grime and bass music, withdrew more than 200 + labels. Aside from Spotify, STHoldings also withdrew their labels from Simfy, Rdio and Napster citing that,
Despite these services offering promotion to many millions of music listeners we have concerns that these services cannibalizes the revenues of more traditional digital services. These concerns are confirmed in our own accounts and a recent study by NPD Group and NARM
Clearly the decision was mainly due to the research done by The NPD Group and NARM showing that cloud based music streaming services discourages listeners to buy music.
This isn’t the first mess Spotify has encountered. Back in 2009, issues concerning how much royalty was really gained from streamed music came out, questioning whether it was really worth it for small time artists.
Spotify should really address these issues with clarity and openness if they want to keep the ball rolling for them.