In their latest fiscal report, Warner Music Group is reporting that streaming music services contributed 25% of the income for their recorded music division. This comes out to about $54 million dollars for the third quarter, and approximately 8% of the total income for Warner Music Group.
Even more encouraging for the music studio is the fact that streaming services are not cutting into their digital sales from sites like iTunes and Amazon. And this increase in revenue from digital sales is more than offsetting the decreasing sales of physical media.
Services like Spotify, Rhapsody and internet radio like Pandora pay royalties to Warner and the other music studios. Their popularity is undeniable, and it seems to be a working solution for both the studios and consumers so far. High licensing fees have held back some startups in this field. Wahwah.fm closed its doors just this week, blaming the fees from the studios as a major reason. But a few are doing well, and if the major studios can make significant profits from the streaming sites, they would do well to support them, rather than choke them off with inordinate fees. Keep your fingers crossed for some sanity from the studios.
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