We have mused quite a bit on here about the sustainability of Spotify and its impact on artists and record labels. This article makes interesting reading.

Revealing for the first time today how the commercial relationship works between the streaming service and the record labels, Rob Wells, the senior vice-president Digital for Universal Music Group International, declared Spotify a very sustainable financial model which was paying out well to the record labels which it has entered into licensing deals with. Mr Wells disclosed that Spotify is paying Universal Music Group a royalty per stream in only two of its territories: the UK and Spain. In its other four territories: Sweden, Norway, Finland and France, Spotify pays the record labels from the money generated by subscriptions and advertising and not on a per stream basis.

Apparently we in the UK, along with the Spanish, are the freeloaders (guilty as charged, m'lud - they'll have to make the ads a lot more annoying and intrusive to force me to switch!)

Mr Wells said it was “lagging behind” in the UK and Spain because of the extremely high quantity of people using the service for free – meaning it was a more difficult task to convert 10 per cent of a much larger number into subscribers. Spotify has recently re-turned on the ‘invite only’ mechanism in the UK to limit the amount of users on the site.
No official figures have been released to show how many people pay £9.99 a month to subscribe to Spotify’s premium service in the UK, which offers an advert free experience. However, it is still thought to be a low number.