Spotify No. 2 Revenue Source for Record Labels, Lags Far Behind iTunes

Spotify No. 2 Revenue Source for Record Labels, Lags Far Behind iTunes

Music streaming service Spotify is now reportedly the second largest source of revenue for the major record labels, but still lags far behind leader Apple’s iTunes.

AppleInsider:

The claims, which have not been independently confirmed, come from a source close to the company who notes that even at number two, Spotify has a huge gap to overcome to reach a level of success enjoyed by iTunes, reports Business Insider.

According to the report, iTunes paid out an estimated $3.2 billion to music publishers in 2011.

Spotify was founded in 2006 in Europe, it launched in the U.S. in July 2011. At the time the company had a catalog of 15 million songs but that number has risen to 18 million and continues to grow by approximately 10,000 to 20,000 tracks per day.

Analytics firm AppData estimates that about 23 million people used Spotify last month. Spotify CEO Daniel Ek has stated there are about 10 million users in the U.S. alone, over 3 million of those are paying subscribers.

Spotify Director Sean Parker has alleged that Apple attempted to keep the service out of the U.S. as it directly competes with iTunes.

“If we [Spotify] continue growing at our current rate in terms of subscriptions and downloads, we’ll overtake iTunes in terms of contributions to the recorded music business in under two years,” Parker said at SXSW.

Spotify continues to grow and is looking to raise $220 million at a $4 billion valuation for 2012 following last year’s $100 million at a $1 billion valuation.

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