The music industry has been grappling with the following question for the last few years: Do streaming services such as Spotify, which allow users to listen to albums for free, cannibalize sales?
Leave it to a banjo-wielding English folk-rock band to provide one very loud answer.
Babel, the sophomore album from Mumford & Sons released on Glassnote Records last week, has had the biggest debut sales week of 2012, selling approximately 600,000 copies in the U.S., according to Nielsen SoundScan.
That number bests first-week totals from such pop stars as Justin Bieber and Madonna, and did so while being streamed about eight million times on Spotify, which is available in the U.S. and much of Europe but not Canada.
Before the release of Babel, the bestselling debut of 2012 belonged to Bieber's Believe, which opened with 374,000 copies sold. "You're talking about a much different artist," said Dave Bakula, a senior executive for Nielsen. "This is an album-driven artist. They're not going to have one single solitary hit that defines the album. People want everything they can get from this artist, and that's where you get large album sales."
Babel's eight million-plus streams are more than three times that of the previous record-holder, said Kenneth Parks, Spotify's chief content officer, although Parks refused to reveal the title. "Our streaming numbers sit alongside a very healthy sales volume," said Parks, whose service boasts more than 15 million worldwide users.
Spotify has been criticized for offering lower royalty payments than labels and artists would get from album sales.
Other big-name artists, such as Coldplay, have opted to withhold new albums from Spotify during the week of release, fearing that the ad-driven free service would hurt sales.
Glassnote Records founder Daniel Glass said that Spotify is "retraining people to buy music through streaming services.
Could we be getting better compensation? Yes, but I'm not going to hold it back from them. That's old thinking."
Mumford & Sons, which will headline a sold-out Hollywood Bowl show on Nov. 10, has been playing most, if not all, of the songs on Babel live for months.
"The fans can take the songs off YouTube, obviously, but they want the produced album. So there's still a record business," said Glass. "For now."
