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Spotify can increase iTunes sales, says music label chief

The boss of a classical music label has told how Spotify helped increased album sales, rather than cannibalising them.

Here's an interesting tale about the relationship between music streaming services and album sales. The common fear is that if people can stream the songs for free or next to nothing they won't buy the album. But actually the reverse is true. That's according to one label chief, anyway.

Johan Lagerlof, CEO of classical music label X5, told TechCrunch that when it launched an app within Spotify, streams of one album increased 412 per cent in a month. That same month, sales of the same album on iTunes shot up by 50 per cent.

The album, The 50 Greatest Pieces of Classical Music, reached number one on the iTunes Classical charts, and broke the overall top 200 albums, peaking at 152.

"People use the Spotify free service as a discovery tool and then go to iTunes for buying their music," Lagerlof said. "The recent sales spike for 50 Greatest Pieces of Classical Music follows the same trend we have seen in Sweden, where there is a positive correlation between Spotify streaming and digital sales."

The album's spike in sales is even more unusual given that it was released in 2009.

Spotify launched apps at the tail end of last year, letting developers and media companies make their own apps for use within Spotify. X5 got involved, and the results speak for themselves. Critics argue streaming services offer artists tiny royalties, but Lagerlof says it's a different business model. "With a streaming service, artists get paid every time you listen to something, not just once upon download," he says. "The revenue is spread out much longer."

Still, some artists like The Black Keys and Paul McCartney refuse to make their tunes available on said streaming service.

Spotify's iPad app launched recently, with high resolution retina display album art. Its US rival Rdio launched at the same time.

What do you think of music streaming services? Are they helping music sales, or harming them? Let me know in the comments, or over on our Facebook page.