iTunes Chart-Toppers (a/o February 21st):
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."
james andy Wednesday, February 15, 2012
Joda Saturday, January 28, 2012
The labels are playing a game of how do we get these companies that seem to know how to raise VC money to give us all their money up front.
It's not about usage.
It's not about sales.
It's definitely about money for artists.
It's all about the up front fees from the digital suckers, and the VC's who love them, that they get to keep without paying anyone else.
It's a great short term game for them, but it's killing the overall longterm health of the industry.
Paradox Sunday, January 29, 2012
The average American pay about $22.5 a year for recorded music.
$7 billion in revenue in 2010 / 310 mil population = $22.5 a year
The average Itunes downloader pay $37 a year for recorded music.
The average Spotify paid subscriber pays $111 a year for recorded music.
Half of those surveyed in Sweden said they stopped pirating and now using legal streaming like Spotify instead.
So why is it that Spotify is bad for the music industry?
LG Sunday, January 29, 2012
Totally disagree with the premise of this post.
Spotify are churning 100's millions in revenue already and haven't even started to scratch the surface of whats possible globally.
They have the potentially to net intial investors a killing.
David G Sunday, January 29, 2012
In a couple of years time, iTunes will be marginalized and Spotify (or some similar concept) will be the only real channel for releasing music. Look at the numbers. Look to Europe. Its no longer a matter of opinion. the stats are clear.
steveh Tuesday, January 31, 2012
No the stats are not clear....
All we get is spin, smoke and mirrors.
And please do not use Sweden as an example. It is a small and completely non-typical market where iTunes had only a tiny penetration. Very different to the UK, for example, which is a large market.
Mrbeat Sunday, January 29, 2012
Yeah, Spotify is the future. iTunes the past. It's that simple. Anyone who doesn't understand this, simply hasnt used Spotify yet. It's the best thing the internet has given us since Google.
NoraBarnacle Sunday, January 29, 2012
In fairness, you can't really compare buying and streaming. That's tantamount to saying that if you can listen to the radio, there's no need to purchase recorded music- which has clearly never been the case.
Visitor Monday, January 30, 2012
James Tuesday, January 31, 2012
I can't tell if Mr Beat's post is supposed to be ironic. I'm guessing it is, considering the numerous crimes against the artistic community that Google has perpetrated over the years - hardly the model we want for Spotify.
HansH Sunday, January 29, 2012
Micheal Robertson is probably just being jealous because he couldn't pull this off. After MP3.com all of his start ups failed.
Obviously Sunday, January 29, 2012
Of course they're looking for more capital.
That 200 Million was for the initial US rollout, now they're growing.
They're not going to in the black for a long, long time.
It costs X amount to become visible to the consumer (which they need to continue doing aggressively), Y amount to exist daily as a service, and Z amount to handle growth.
The current level of subscription and Ad revenue cannot do all of this.
@Opdiner Sunday, January 29, 2012
The increasingly messy Spotify. Given the label's double dipping here, when do the FBI send in the copter's and cops?
steveh Monday, January 30, 2012
http://www.guardian.co.uk/media/2012/jan/29/spotify-facebook-partnership-apps
All these myriad Spotify comment debates on DMN are getting sterile.
There are two distinct camps:- the users/fanbois and professional artists/small labels.
By professional artists/small labels I mean entities reporting 1000 or more Spotify streams a month. That disqualifies HansH and other fanbois like him!
Of people getting 1000 or more Streams streams per month I have not heard of one - not one - speaking positively about Spotify.
We all get our monthly, quarterly or biannual royalty reports and we look at the Spotify income and cry "W T F!!!!!!". It's getting marginally better but it's still Shockingly Bad!!!
As far as I'm concerned Daniel Ek is another Kim Dotcom who's managed to conceal his tech company takeover of music under an elaborate smokescreen of false legitimacy.
gaetano Monday, January 30, 2012
I hear all of those arguments,
The thing is, Spotify is not going anywhere. Whether it succeeds on it's own merit and work or is bought by someone else down the road who enables it to stay together, it's here and streaming as a concept within the industry is here to stay, showing growth and people like it.
That said digital and physical sales are staying too, but the there will be shifts between all of them.
I wouldn't compare Ek to Dotcom, though it's an easy thing to do. Where Dotcom was a blatant, unapologetic and unrepentant criminal (on a myriad of different counts, in multiple countries through the years). Ek, while spearheading a service that is in bed with the majors and has a knack for lack of transparency, is just another millonaire doing business with other millionaires.
He's not showing his cards at this point, mostly because their whole system is based on value of the content (and therefore the service) is dynamic. That means the returns for both the artist, label, and of course the investor are beholden to the consumer and the way they use the service. It's not different than most startups in some ways, but there is a different spin in the end.
The speculation that happens here functions in a different way than that of a startup that provides or sells a specific service or durable product for a specific price.
Artists and labels should be unhappy with the payouts. They're measly and don't compare to sales. They should jump ship if they're not happy. Chances are, the Major's catalogs might just be enough to garner more and more users to get the service scaled up, and then they can come back when it makes sense.
James Tuesday, January 31, 2012
Chances are, the Major's catalogs might just be enough to garner more and more users to get the service scaled up, and then they can come back when it makes sense.
But will the deal ever get better? It would be nice to think so, but I honestly don't see why it would. If Spotify are allowed to become the dominant music platform, they could simply offer a 'take it or leave it' deal to artists, knowing that leaving it was really not an option. A lot of people are currently saying to jump onboard the platform now and it will be better in the future; I think that could be a very dangerous assumption.
My feeling is that if streaming is going to be viable for artists in the future, at the very minimum we will need serious competition (for example, Deezer and others). But then the question becomes, with the consumer base spread out to allow for such competition, will there be enough money for any of these companies to ever turn a profit?
gaetano Tuesday, January 31, 2012
The deal may never get better, maybe it will, no one has any idea at this point. Artists have been dealing with "take it or leave it" forever up until now, I know the internet was supposed to change that, but the fact is Spotify is better at the internet, so they get to call the shots.
The fact of the matter is, majors have the longest legs right now. If they took their catalogs off of any of the major digital distribution platforms, those platforms would not be able to charge what they do, and probably wouldnt' even exist.
I agree that the competition has to be created, however if Spotify is to streaming what Itunes was to Digital download sales, we're seeing a clear and obvious frontrunner who could easily keep a healthy lead.
If we were to make the Netflix comparison, it's biggest rivals are cable on demand services and things like HBO GO. Exclusive on demand content straight from the content creators. Sony is dabbling in that now a bit, it will be interesting to see how that works for them.
truth Monday, January 30, 2012
The Major labels are never going to signup to a licesning deal that lasts 'forever' with spotify.
And subscribers will cancel if any one major pulled their content.
As a result, the majors will always be able to "hold up" spotify from time to time for more cash advances, or they won't renew their licesning deals.
At the time of the holdup, the majors will successfully extract the maximum amount available (the cash on hand) from spotify.
The initial investors will win if they can get bought out by the next investors, or, with luck, take the company public and sell it to the masses that don't understand why they will never make any money.
Ultimately, Spotify is only 'renting' the content, and they don't have any rent control.
David Allan Monday, January 30, 2012
steveh Monday, January 30, 2012
Please understand - most of the strongest complaints about Spotify come from small labels or artist-owned labels who are NOT beholden to major label artist contracts.
So that kinda demolishes your mean-spirited point.
Surely the original excitement about selling music on the internet was that it would empower and enable smaller artists and labels.
This tendency to level the playing field is being savagely reversed by Spotify and its woefully non-transparent major label pay-offs. It's a scandal!
gaetano Monday, January 30, 2012
Spotify made no bones about the fact that they paid the majors to get access to their catalogs.
Majors have 18% of that company. By no means controlling shares, though the use of their content is another story.
The playing field will never be level, it doesn't have to be. More listeners care about the Major's catalogs than anyone else's, that's the reality.
In my opinion it's only been a recent idea that any indie artist or label could even think about playing the same game as the majors, we're seeing a lot of people make some great strides, that's very inspiring and exciting, and I think we're going to see more and more of that.
However, in this arena it's just not going to be the same, because this is about who owns the most content that the most people want access to, and that's the big three.
visitor Tuesday, January 31, 2012
well done david. the absolute archetype of the sort of clueless commentary that litters this entire debate.
Trust a Reporter? Monday, January 30, 2012
Just wondering if Michael Roberston agreed to be quoted on this? I realize that PHO is not totally private but I feel like there is some level of trust there. It feels a bit slimy to pull quotes for articles from there without permission. Then again maybe Paul asked and I just didn't see that go through the list. On the other hand, he has written some false articles realating to me in the past.
Paul, you have anything to say on journalistic integrity?
PartlyCloudy Monday, January 30, 2012
It's great reporting in my book. And if Robertson wanted privacy then blabbling on Pho is not a great idea.
Yves Villeneuve Monday, January 30, 2012
james andy Wednesday, February 15, 2012
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Yves Villeneuve Monday, January 30, 2012
David G Tuesday, January 31, 2012
Well Yves
I guess no-one is twisting your arm so if you do not like the Spotify idea/model, then just stay away from it. One thing is the grooveshark situation where people find themselves on the service without wanting to be there. But Spotify is not forcing anyone, so all should be well in streamingland as far as they and you are concerned. Freedom of choice will decide in the end. IF more people think like you spotify will end up being a mainstream service. if they dont, then Spotify will be more diverse and possibly more interesting. I think the latter will be the case. The train is not "leaving the station" on this issue, it actually left a long time ago.
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