Music streaming pioneer Spotify earns more than £1m a month from its premium subscribers, OUT-LAW.COM can reveal. Earnings could be as high as £72m a year. The figure is derived from statements made by Spotify executives. Spotify has been reluctant to reveal how many of its users have upgraded to its premium version. Costing £9. …
Its a good business model - since the record companies are major share holders they can take an initial hit on things like streaming by lowering their charges to almost zero and plan to make their money from dividends and an increased share price.
One major profit-driver for them is that this approach reduces the amounts they have to pay to song writers and artists, which are based on a % of gross income, to practically zero.
In other words, the record companies have given up on how to make money from the internet for the 'music business' and decided to concentrate on their own interests.
Whoop de do.
So Spotify costs nearly 3 times as much to run as it gets in revenue. Way to go on sustainablility in the Web 2.0 era...
Tried and liked, but its just too expensive.
I like the service, but the costs are too high.
I love being able to browse from artist to simalar artist and being able to explore music and learn abit about it as I go. You can't do that on the iphone. Just play the music.
Also the player is slower to load than the native Iphone player, and not working in background is annoying if I'm listening and want to check an email that just arrived.
It inspires me to want to go and buy tracks, so the music industry should like it. But it doesn't inspire me to want to stay subscribed. I'd rather buy one album a month to have to hold, than turn over £10 a month to not have anything. The price point would need to be less. I'm not sure how much less.
I wonder . . .
. . . if/when Payola comes to Spotify. The music biz was always willing to pay for its songs to be played to us; why should Spotify be any different?
re: "I'd rather buy one album a month to have to hold"
Napster now include 12 drm-free MP3s with their £10 a month unlimited. There is also a £5 per month unlimited option coming soon if the desktop software is to be believed. I have an iphone, so spotify was tempting, but napster works really well with SONOS, you can have 2 PCs authorised to play/store, and play from anywhere via the web interface (e.g. friends house, work etc)
Once you get over the subscription model, napster is fantastic (and spotify might get there one day with more development). As for paying for something you can't keep... Surely unlimited music for a tenner is better than unlimited crap (with adverts!) on Sky for £50 a month.
What will happen when/if it hits the US?
I am wondering what will happen once their service is available in the US? I understand how bug their market is right now but I am trying to understand if the current services in the US will outpace Spotify. And I am not referring to just iTunes or Rhapsody. There are newer artist promotion sites such as TuneCore and MusicSubmit that are offering artists more than what Spotify can offer. In the age of independent artists it looks like they are more likely to move towards these sites and other types of services being offered up my MixCloud and MusicXray who promote the ability to intelligently find music and let artists music be found. Other technologies are on their way and constant invention and integration to these newer more intelligent ways of distribution and song selection are taking the industry in new directions. blah blah blah... point is I am not sure if Spotify can really keep up even if they had an unlimited budget.
Spotify (or Napster) and Squeezebox
Does anyone know if there's any integration between Spotify (or Napster) and a Squeezebox? I remember seeing something about streaming from a PC to the Squeezebox, but I'd prefer to not have to keep the PC on whilst listening to the Squeezebox.
The Americans have Rhapsody which can do this, so technically it's possible to do.
@Spotify (or Napster) and Squeezebox
I've heard they're going to look at getting onto various types of hardware such as internet radios, etc.
Where are your figures from?
"One major profit-driver for [record companies] is that this approach reduces the amounts they have to pay to song writers and artists, which are based on a % of gross income, to practically zero."
That's a very interesting revelation
That means that when internet music streaming takes a significant market share, then artists will have a huge amount to gain by getting out of their record company contracts and selling their music directly to Spotify.
Which could mean that record companies will find it increasing diffcult to sign up new artists, as the artists begin to go it alone.
I like Spotify - the adverts are less intrusive than a DJ on an advert free BBC radio service and I get to choose the music I want to hear. The search service turns up music that I would not otherwise have known about and as they get to know you they feed well targeted suggestions to you. I have no need to download a recording, it just takes up disk space and I can listen anytime I want over the Internet.
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