Music streaming sites such as Spotify and Deezer now makes up half of the income for many musicians, says record label boss Martin Mills.
Mills claims streaming sites have changed the way people listen to and access music, saying streaming sites offer a 'friction-less' way of listening to music and making listeners more likely to explore an artist's back catalogue.
Mills, chairman of Beggars Group tells The Daily Telegraph that the impact of streaming sites means that for some artists, streaming sites are the main source of income.
"Some of our catalogue artists earn more from streams than downloads of individual tracks or any other format," he tells the broadsheet. "If we didn’t have digital we wouldn’t have a business.
"Physical is still important to us but the lesson we learned over last few years is that you have to strike a balance between giving people what they want on the one hand and actually being a business and charging for content."
Beggars group includes record labels such as XL, Rough Trade, 4AD and Matador.