When I talk about Spotify with local musicians here in Cleveland or, for that matter, anyone who's concerned with their welfare the question they ask is will the artist see any revenue. There's much skepticism from this new form of music distribution called streaming. I tell them that, yes, there is revenue sharing and it'll increase as more and more people sign on to listen.
The reality is that the days of rock musicians being able to afford Lear jet travel and weeks at the Ritz is over. There's so many reasons for this, and the idea of it being solely the loss of revenue due to stealing mp3s is inaccurate. The music buying demographic, kids in their twenties, are spending money on other things like video games. The good news is they aren't stealing near as much music.
They're signing up for Spotify and that's bringing in more revenue to the indie labels. A new report from Merlin, reported here at Evolver, Report Shows Big Increase in Spotify’s Payouts to Indie Labels seems to indicate significant growth in revenue. No actual figures were given but those involved are happy with the direction.
The other thing to keep in mind is that the new model means a continuing revenue stream. An album that's years old may be listened to as much or more than it was at its release. The more times people listen to a song the more money going to the artist.
And, again, I must add that I'm still surprised at how many people I talk with are unaware of Spotify. There's going to be explosive growth in the upcoming year.