Top UMG Executive: Spotify Is Helping the Industry, Pandora Is Hurting It

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So who’s adding revenue, and who’s cannibalizing it?

Here’s what Universal Music Group’s head of Digital Business Rob Wells had to say about Spotify and Pandora in a recent interview with Topspin CEO Ian Rogers.  This is one of the top-ranked guys at the largest major label.

> On Spotify:

“I’m a fan of [Spotify’s] model, I’m not just a fan of that company, although they’re all great guys, they’ve got great tech, great engineering, I mean the Facebook integration is amazing.  But I’m a fan of that model, and why am I a fan of that model?  Because that’s clearly what consumers – some consumers – want to do.

There’s massive debate raging throughout the whole of the industry about does it cannibalize, what are artists doing holding back from these services…

…but what if it’s incremental revenue and not cannibalistic revenue?  So this is all additional money.”

> On Pandora:

“The disappointing thing with Pandora is that it’s a very dumb service, it’s a very passive service.  They kind of spoonfeed their consumers music…

…my view is they should have more to engage consumers especially in the opportunity of upsell.  They need to bolt on something like a premium subscription service, and then it’s interesting.

They’re doing something right, but I don’t think they’re doing the music or the recording industry any favors by doing what they do.  Yes they pass royalties, but if you ask any of the other business partners, who – with the exception of YouTube – who is cannibalizing their business, they’ll probably turn around and say Pandora.”