STHoldings, a major distributor in the music industry, has announced that all tracks from over 200 of its record labels will be removed from Spotify, Napster, Simfy and Rdio due to concerns over steaming media affecting sales.
A recent study by market research groups NPF and NARM (published on DigitalMusicalNews) put the fear in the distributor by showing that with the increased access that streaming music gives them, end users are less likely to buy a CD or download the tracks.
In a statement addressing the removal of content, STHoldings said: "As a distributor we have to do what is best for our labels. The majority of which do not want their music on such services. They provide poor revenue and have a detrimental affect on sales. Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity."
Wired has a somewhat complicated run down of who has their fingers in the Spotify pie, and it turns out quite a few of them are major record labels. They also discuss how the streaming service doesn't do itself any favours by being so secretive about its royalty rates.
Business practices like these are what's thought to be keeping some artists from using the service and, with their catalogues of content set to be dramatically reduced, the future of Spotify and other streaming outlets seems a little more shaky.