Spotify a loss for musicians?

Recently a new service has emerged from a swedish company Spotify. They offer a gigantic music library available for streaming, a brilliant idea at first and we at Gramtone got on the bus. Through our distributor Phonofile in Norway, we are avaliable on Spotify since last week. Our three releases The Modesty, Tree full of people and PAN are all available. Our coming releases Ralph and Kallocain wants to be published too.

But when talking about the economy, the terms are not particilarly ok for the musicians. First, the income generally is modest, where enormous amounts of artists will share a fairy small cake of money from ads and some paying for subscriptions. Then Spotify shares it 50/50. After that the distributor get 20% and the rest goes into the record company. Since Gramtone has a philosophy of high percentage to our bands, 80-90% of our income, they will get what they can. But as our distributor explained a bit ironically:
“…which will come down to about 0,000000001 euro per play”.
So if an atist is played about one billion times, the will get one euro from Spotify. A revolution? No, but hopefully a complement.

An other thought: Will streaming services really benefit music in the long term? The huge amounts of small labels and independent bands will be forced to work with the few, huge companies that can afford this kind of technology. Now when web publishing is cheap, one can set up their own webshop and work directly with the audience without middlemen, this kind of service maybe puts a gigantic middleman to separate this direct contact. But I might be wrong. It would be cool to hear about Spotifys strategies. I will call them. I also have a few more subjects to talk with them about.

This article (in swedish though) tells about recent development. As usual, the comments are very interesting:
http://www.dn.se/kultur-noje/musik/den-strommande-musikrevolutionen-1.822297

Edit 8/8 2009: Read the post after our first report from our distributor “Spotify money report”:
http://gramtone.wordpress.com/2009/08/08/176/

Streaming or downloading?

Regarding one of my latest post, where some comments pointed at issues regarding these techniques. I would like to ask this question to anyone reading: Would you prefer to download or to stream the music you listen to? One prerequisite would be that the sound quality is equal – which is not really the case today. My question is more for a future strategy. I suppose the underlying question is Do people want to own a file on their own hard drive or do they want to access thair music from someone else’s server.

Pros and cons of these different techniques? What do you think?