Music charts, based on album sales, are seeing a big change in the United Kingdom today.
The Official Streaming Chart, which lists the top 100 digitally streamed songs, launched today. It compiles information on streamed songs from digital outlets like Spotify, We7, Napster, Deezer, Zune and ChartsNow, MediaGuardian reported last week.
The chart will include the 100 top songs and rank audio streams from a mix of free (ad-funded) and subscription services.
According to the report, the most streamed artist of 2012 to date is Ed Sheeran. Lana Del Ray is ranked in second place, with David Guetta, Rihanna, and Coldplay filling the third, fourth, and fifth positions.
Spotify’s head of content, Steve Savoca, praised the Chart as “a defining moment in the evolution of digital music as it shows music consumption as a whole,” according to the RadioTimes.
The “legitimate” streaming market, which is ad-funded, makes up just 4.5 percent of the music industry’s overall revenues, according to the Independent. Nevertheless, it “is seen as the potential saviour of an industry decimated by piracy.”
Different from its competitor Pandora, which is only available in United States, Spotify claims 10 million active users in 13 countries, with three million paying subscribers, according to Reuters.
The increasing popularity of Spotify is in tandem with the expansion of Facebook, through which users music with their friends on the site.
Comparing the business models of Pandora and Spotify, Seeking Alpha explained that Pandora was faced with huge royalty expenses and a troubled advertising-supported model. Spotify has established a subscription model with free advertising supported service, which might eat into Pandora’s share in the advertising market.
What’s more, by making music available on demand, Spotify must conclude licensing arrangements with each artist it offers, the Reuters reported.
“With Spotify now offering a free Pandora-like model in addition to true musical ‘On-Demand’ they could begin to woo away consumers from services like Sirius XM and Pandora,” Seeking Alpha noted.
Image: Official Charts Company