Martin Mills, chairman of Beggars Group, which includes Adele's label XL, said services such as Spotify have provided a major financial boost to artists.
> Spotify helps drive music sales, says boss
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"Some of our catalogue artists earn more from streams than downloads of individual tracks [or] any other format," he said, according to The Telegraph.
"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."
Spotify paid $180 million (£115 million) in royalties to musicians last year, a figure that is expected to rise to $360 million (£230 million) in 2012.
The service has 15 million users, 4 million of which pay a subscription fee to listen to unlimited music without adverts.
Kenneth Parks, chief content officer at Spotify, told the British Business conference: "There are a few myths around Spotify and if I want to debunk one of them it is that we don't pay back to artists. We just passed the 4 million paying user mark, a great number of those were stealing music."
Mills's went on to describe Adele's success as a "miracle", attributing it to her music's personal connection with audiences worldwide rather than the current structure of the music industry.
Adele's 'Rolling In The Deep' was the most played song on Spotify throughout 2011.
Her album 21, as well as Coldplay's Mylo Xyloto, were only made available on Spotify months after their release.