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Why Spotify Will Never Be Profitable 0
Great read from the folx over at hypebot:
In the article MP3.com founder, Michael Robertson, gets into how the big four three remaining record labels use their weighty leverage to squeeze all potential profitability out of streaming services such as Pandora, Spotify, Rdio, and others. As expected label lawyers use all kinds of complicated pricing models to charge streamers for content, high upfront costs, and mandatory music play reporting procedures to ensure their own continued profitability.
The truth is, I don’t blame the labels. They know that without access to their catalog, you Spotify/Rdio/Mog have absolutely NO business model. As much as I would like to see these services do even more to promote independent artists, I know full well that whatever meager profitability they get is going to be from the ability to provide The Beatles, Beyonce, and Beiber to the casual music fan. This is why, even as a paying Spotify customer who uses the service daily across several devices, I’m pessimistic about the company’s long-term prospects. The business model for these services must evolve. Lots of them rely on advertising revenue to help keep them afloat, but it’s going to take even more than that to maintain over the long haul. This is still a really young business area, so we’ll see how it continues to grow.
Read the full article here.
P.S. Spotify actually have access to The Beatles catalog (not surprising), I just like to use “The Beatles, Beyonce, and Beiber” to connote all things pop music.