Spotify overtakes iTunes in Europe for Kobalt

Spotify streaming revenues have surpassed those of iTunes downloading in Europe by 13% for global music publishing and music services company Kobalt Music Group.

Kobalt’s founder and CEO Willard Ahdritz will announce this today, calling the shift as “an important new milestone in streaming.”

Kobalt represents 6,000+ songwriters and artists, comprising half of this week’s Top 10 Billboard songs and albums and the top three albums in the Official UK Album Chart.

Its clients include Dave Grohl, Macklemore & Ryan Lewis, Skrillex, Bob Dylan, Maroon 5, Lenny Kravitz, Nick Cave & The Bad Seeds, Gotye, Pitbull, Ellie Goulding, One Republic, Simon & Garfunkel, Passenger, Akon, Thom Yorke, Ryan Tedder, Paul McCartney and Disney Music Group.

In a keynote speech at the Web Summit in Dublin, Ahdritz will point out his acts’ European iTunes publishing income was 32% higher than that for Spotify in the third quarter of 2013. That dropped to 8% in the last quarter of 2013.

During this nine-month period from Q3 2013 to Q1 2014, Kobalt saw a 5% growth of combined iTunes and Spotify publishing revenues in Europe.

Kobalt’s numbers mirror recent figures from other sources that consumers are moving from downloading to streaming. Apple revealed that its iTunes Store generated $10.2 billion in net sales during 2014 but suffered a decline in sales of digital music. It didn’t provide figures for the decline but the Wall Street Journal claimed it was a 13% to 14% drop since January 1.

The mobile app Shazam witnessed the number of songs sold from 1 million in March 2013 to 400,000 in September 2014.

Globally, streaming revenues for Kobalt writers tripled over the past two years, accounting for 10% of overall global publishing income in the second quarter of 2014. This includes subscription services, YouTube, Internet radio and royalties from live performances of compositions, radio performance and those from CDs and concert DVDs. The share of publishing income made up by streaming has grown steadily, trebling since Q4 2011, when it was 3%.

Ahdritz will point out how streaming can prove a viable business model when tracked and collated properly. He will also claim that Kobalt, through its technology and business model, is able to collect more revenue, on average securing 30% higher revenues than other publishers for exploitation of the same work.

“Kobalt is changing the future of music. 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.”

Ahdritz will be tweeting throughout the conference at @WillardAhdritz and @Kobalt.