THOUGHTS: Spotify Asking For More Money
Spotify, the music streaming service is now asking record labels for money to promote artists and their music within the app. How does something like this happen? Basically Spotify isn’t making enough money to cover the royalties for the music there streaming, which doesn’t make much sense if you really think about it. Record labels charge a fee for every time their song is played or streamed, so streaming services will either charge an annual fee to cover that or put advertising into the app to generate revenue to cover royalties or perhaps even both. People get music, record companies get paid, and streaming services can keep running, that all makes sense. So how does Spotify not have enough revenue to cover royalties? I don’t know but they got a great solution… ask record labels for more money, in the form of advertising their artists.
Promoting on the homepage and suggesting artists if they’re paying is one thing, but Spotify can put songs into user’s playlists. That’s messed up. I can understand putting songs into Spotify created playlists but not in the user ones. This also favors the artists and companies with money, so all those small artists are going to be dust in the wind. Although all this isn’t set in stone, it’s in the works. It seems like the last thing Spotify wants to do is charge people more money a month for their services which I can appreciate being a Spotify user myself, but all this seems to be a dumb move. Charge a couple extra dollars a month and give everyone an equal chance to be heard. Spotify has over 270 million users, at 3 extra dollars a person, that’s 810 million big ones to bring home to the investors. Is it that simple? Probably not. Are we going to complicate things for no reason? You betcha. I’m Doug Quimby and this is off the record.