This has been quite a week for music streaming sites and services. Amidst all of the shrewd verdicts of the Lala and imeem deals there is a silver lining from Rajar’s Midas report released on Thursday. The report revealed that this year music streaming services like Spotify and Last.fm were “the fastest-growing internet-delivered audio services” in the UK, outpacing “listen again” services and podcasts. User numbers have doubled for Spotify and Last.fm, reaching 4.5 million by November (up 55.2% from October 2008).

There was also a report yesterday from Music Week, who was given exclusive access to six months of Spotify user data. Spotify remains to be one of the most popular services in terms of usage, with the data suggesting “no discernible ‘honeymoon’ drop-off period”. From February to July 2009 there were 1 billion streams from 2.7 million users, meaning each user “streamed an average of around 370 tracks in the six months”.

The report also claims Spotify “drives ownership as, via its deal with 7digital, the service is now the second largest download site in Sweden”. This is reassuring news in the wake of the imeem/MySpace deal with news of independent artists getting left high and dry through imeem’s Snocap music storefronts on MySpace. Wired reports, “MySpace Music bought “certain assets” from imeem, and they do not include imeem’s liability to more than 110,000 independent artists with Snocap storefronts…Some artists have been owed money for more than a year, and the chance of them seeing any money now is, for all intents and purposes, zero, the source says”.

However it should be noted, news has also come that MySpace Music has struck a deal with Tunecore to allow any artist to distribute songs directly through MySpace Music starting Thursday. Wired suggests with the evolving of such cloud-based systems services, MySpace Music and Spotify “are expected to play a bigger role in artists’ revenue streams” for independent labels.

This yields another question though, how lucrative are these services for independent artists? With the constant struggle for balance between adequate streaming rates for labels and survival for the services, how do things fare for the artists? The Music Week report revealed some interesting conclusions about the ‘long tail’, namely that even with Spotify it doesn’t really exist, “users are still not exploring the furthest reaches of that catalogue, stopping at the 3m-track mark. Of the 4.5m tracks on Spotify in the analysis period, some 1.5m tracks were not even streamed once”. The top 100,000 tracks on the service accounted for around 80% of the usage.
The only ray of hope was amongst paying users, who “stream on average more tracks than those on the free tier, suggesting the long-tail theory may start to make more sense when a transactional cost is added in”.

This could come into play with more success if Spotify’s launch in the states is more subscription-focused. Whether or not it will be though, is up for debate. Even with all the funding it has secured, a US launch seems uncertain. Labels are having second thoughts about the strength of ad-supported downloads and debates over subscriptions are most likely halting the progress.

Others are fearing “the company is getting too popular and as long as it remains so, will almost always face immense infrastructure costs”. Spotify was one of the biggest achievements in an otherwise slowing year for innovation and progress, and digesting the past week’s news of its successes in the UK (and with the fates of Lala and imeem still not totally clear), Spotify should be considered one of the industry’s lesser headaches.

Other users also read:

TMV Looks back On Our Predictions to See Where We Were Right and Where We Got It Wrong
Lala Land: How Apple’s Deal Gives It A Leg-Up To The Cloud
MySpace Music Is No Spotify Challenger