Seriously, Spotify needs more cash? This could go down as one the best major label rackets of all time. “My sources say Spotify is seeking more capital,” MP3.com founder Michael Robertson just emailed a group of executives on PHO. “This is after raising several hundred million.”
We’ve actually lost track of the full financing total, though it’s up there. Just last year, Spotify raised a flush $100 million, which brings the total financing level to more than $200 million according to our tallies. Crunchbase pegs the overall valuation at a more ‘modest’ $183 million, all since late-2008.
This could be a disaster for investors, but as far as the majors are concerned, this money keeps going straight to the bank. Which is why at Midem, several major label executives were stumping for the startup. That includes Universal Music Group digital topper Rob Wells, who continued to spread the gospel that Spotify doesn’t cannibalize more traditional sales. “He’s annoyed that bands are pulling out,” one source within earshot told Digital Music News.
Earlier in London, Wells told an audience that any claims of Spotify stealing sales from other platforms are “totally bogus,” while citing results from an embarassingly limited, six-month ‘study’.
Back in Cannes, Sony Music Entertainment head of global digital business Dennis Kooker was the latest to say it out loud. “At this point we don’t see any evidence that any one area is significantly cannibalistic to any other,” Kooker told a Midem audience on Saturday morning, according to liveblogging from Music Ally. “Is there substitution? There is always going to be some as people move around and have choice. At this point there is no evidence that any one model is seriously damaging any other model.”
Of course, not everyone’s buying it, especially those not on board the money train. And the more we talk to artists and their managers, the more we’re finding resistance. “It’s simple,” one top manager told Digital Music News at the Carlton. “The [major] labels are getting direct payments from Spotify, and that’s going straight to their bottom line. But for a band that really has two or three years to capitalize, it doesn’t make sense.”