Is streaming music a good business?
Streaming has taken over as the dominant music format and is attributed with revitalizing the moribund business of record labels big and small. But for streaming companies, the answer is not as clear-cut.
Stuart Dredge over at Music Ally is reporting Spotify’s losses widened to $600 million last year. Read his article here. I just wanted to point out that some significant portion of these widening losses are due to currency swings. March 29th 2016 Spotify announced a $1 billion US denominated convertible debt deal with […]
According to MusicAlly, Spotify has recently taken dodging songwriters to a whole new level by refusing to pay the Swedish authors’ collecting society Svenska Tonsättares Internationella Musikbyrå or “STIM.” That’s right—Spotify the Swedish company is stiffing the Swedish collecting society STIM for payments to Swedish songwriters (and any other writers STIM collects for). And in a great example of Spotify’s seemingly endless right hand/left hand problem, Spotify is stiffing STIM at the same time as Spotify is launching its high profile charm offensive for superstar songwriters (“Spotify Secret Genius”) and trying to get a federal judge to approve a class action settlement.
While Spotify’s technocrats may be breathing a sigh of relief after the company’s most recent multimillion dollar settlement with songwriters, it is well to remember that the company is probably not anywhere close to out of the woods. As others have learned the hard way, once you replace the rights of songwriters and artists with your own lust for IPO riches, the lawsuits can go on for a very long time indeed. You would think that after nearly 20 years of massive infringement online, the obvious answer would suggest itself to the “get big fast” group: Don’t use music you don’t have rights to use.
Yes, that’s right. Just say no.
The typical reason given by interactive services about why their need to offer unlicensed music exceeds their desire to offer only licensed music is because of competitive pressure from YouTube. Why do they feel this competitive pressure? Because their investors tell them at every board meeting that they should feel it. But let’s be clear–I doubt that Tim Cook gets Eddie Cue in a headlock over the issue over at the Infinite Loop. If you agree, then that kind of narrows it down.
But entertain that idea for a moment, however ill founded. Why is YouTube able to sustain this competitive position that supposedly makes otherwise licensed services soil themselves with fear of being undercut and overrun by YouTube?
That’s right–the “DMCA license”, or YouTube’s absurd use of the “safe harbors” granted to them under the U.S. Copyright Act which YouTube likes to think makes them bullet proof. (Which is also what Cox Communications thought until they weren’t and is probably what Facebook thinks, too.)
So get that straight–some would say that The Golden Child (aka Spotify) is to be allowed to limp their way to the increasingly inexplicable goal of some kind of big financial reward (or “exit”) in an IPO of whatever stripe while we are all asked to look the other way and allow them the same shite arrangements that YouTube enforces through lobbying, litigation and unprecedented monopoly position (aka crony capitalism).
And you thought it was all about the “Value Gap”? Apparently not.
Last year when Spotify took on $1 billion in debt, we reported that it did so under terms that forced rate increases if it failed to IPO. Now, those terms could force Spotify to IPO quickly, which leaves the music industry in a strong negotiating position.
Another insightful post by the author of Free Ride! We’re looking forward to Mr. Levine turning his attention to the racketeering at Facebook.
As Spotify begins to prepare for an IPO, which sources say the company is planning for late 2017, the relationship between the Swedish streaming giant and its trifecta of major-label frenemies (Universal Music Group, Sony Music Entertainment and Warner Music Group) is going through some drama.
Finding compromise is more important than ever for both sides. Spotify needs the majors’ vast catalogs and without long-term deals in place, it would be hard for the company to go public — which it essentially has to do in order to satisfy the terms of a financing deal.
What do you expect from people who steal from songwriters? Where is the Justice Department now?
The past 72 hours have been especially fun in the world of streaming exclusives.
On Friday, Bloomberg ran a story which accused Spotify of actively ‘burying’ the promotion of stars who have windowed their music on Apple Music or Tidal.
Spotify has done so, said the report, by excluding artists and tracks from its highly influential playlists, in addition to demoting them from search results.
The Swedish service has now hit back at the article, calling it “unequivocally false”.
Well, to be precise, Spotify says that the allegation of it burying search for Apple/Tidal-friendly artists is “unequivocally false“.
That’s because the other bit – the bit that suggests Spotify is blackballing these artists on its top playlists – is completely true.
There’s no debate here. We’re telling you, it’s happening.
Just ask Katy Perry…
Perry’s big comeback single – her first for two years – is called Rise.
You may or may not have heard it. That’s kind of the point.