Spotify, good for you and the music industry.

We all love Spotify, wether you choose to see the value in paying for it to remove those ads or not, it remains a great thing. Fortunately it seems that not only is it good for us music loving consumers but it also good for the music industry. Despite the perception that nobody wants to pay for premium service on Spotify, music label execs are reporting a healthy income from their relationship with Spotify which is extremely encouraging in that it clearly is working as a viable business model  and therefore is unlikely to just vanish overnight.

Rob Wells, the senior vice-president of Digital for Universal Music Group, has today revealed that Spotify is returning good revenues to the labels that have invested in it. As reported by The Telegraph, Wells revealed some of the details behind the way the service pays out to labels. It appears that in the UK and Spain royalties are paid out for every song streamed, whereas elsewhere labels get paid a more general share of revenue from advertising and premium account subscriptions.

Interestingly, Wells revealed that only 10 to 12% of users per territory need to be premium subscribers in order to make a profit there. In the UK and Spain this hasn’t been achieved yet despite the service’s popularity. Spotify recently returned to ‘invite only’ status in the UK in order to control user numbers.