Spotify now top-tier music revenue source in Sweden

In spite of its detractors, music streaming service Spotify appears to be really starting to make significant revenues for some labels. The company has shared figures -- and we'll come to the reason why shortly -- that show payouts of more than 40 million euros since launch.

If you spread that out evenly, it's just 1.6 million per month -- not bad, but nothing to write home about. However, three quarters of the total results from the first eight months of 2010, and the figures from the start of the year are understood to be considerably lower than the figures from the last few months.

That could make it an extremely significant revenue producers for music labels around, and both Sony and Universal have confirmed that to be the case. In Sweden, in particular, Spotify is making more money for labels than any other retailer -- online or off.

Music Ally quotes Sony Music Sweden's director of digital sales, Jacob Herbst, who said: "Looking at the past few months, it is the most revenues for artists and record companies… We already have several artists who receive 80 percent of their revenues from Spotify. An artist who draws in half a million kronor can get 200,000 to 300,000 from Spotify."

Of course, the penetration of Spotify is likely to be highest in Sweden, where the company was founded and where the download market is rather more advanced than in the UK and the USA. No breakdowns for the UK have been published, but it's highly likely that iTunes remains on top over here.

The music streaming company has about 650,000 paying subscribers (compared to its 10-million-strong userbase), 90 percent of whom are paying the £10/month premium tier. The remainder pay £5 each month for no ads, but no mobile access.

Adding that up means that the company is raking in about 6.2 million euros of subscription revenue each month, in addition to any revenue from advertising to its non-paying users. Even allowing for significant advertising money flowing in, it's clear that Spotify isn't yet profitable, particularly once you allow for staffing, development, marketing and server costs.

However, if it's able to bring in significant cash for rightsholders in Sweden and other European countries, that may not matter for the moment. What's important right now is to convince US labels that it has the potential to bring in more dough than it'll cannibalise from the likes of Amazon MP3 or iTunes. This sudden sharing of data, after so long with no figures, is no doubt calculated to achieve that very objective.