No Music Streaming Site has never made a profit

[RTF]

Spotify/Pandora etc. get criticised for not paying artists much money and the record labels are still moaning.
But yet they've never turned a profit.
Speak on it brehs.

 

[zoo]

*ever

 

[swerve]

Spotify for example, pay the label. It is up to the label then to pay the artist via different agreements. And the label get a certain amount depending on how much their tracks are played during a certain amount of time.

Spotify get their Money from different VC, and dont know exactly they are slowly building up a good cash flow. But yeah, profit is still a few years away.

 

[ThaPrez]

Spotify COULD make a profit, but they're choosing not to because their focus is on growth.

They could either limit streams or up their subscription (to $12.99, it's been calculated) and they would be profitable.

They've decided not to, and are instead going with the Amazon model of becoming an all consuming juggernaut before worrying out bringing in profit.

 

[The_King_of_Everything]

Hmmm I jut got an idea

 

[Ranger21]

Spotify also makes a good deal of money on advertising space...

 

[RTF]

Spotify also makes a good deal of money on advertising space...

okay and not a single dollar in profit.

 

[Ranger21]

okay and not a single dollar in profit.

right but that is mainly because of the music licensing fees

Its also still a pretty young platform. I believe Spotify was released in late 2008. With 500 million dollar revenue streams hopefully they will turn profits soon

 

[KushSkywalker]

do you know how trailblazing new business models works?

 

[ThaPrez]

Is Raising Rates Even Possible? With high-profile indie artists beginning to pull out of the service? Maybe so. But wait: By now, you’ve probably heard that Spotify isn’t even profitable. How is it supposed to find that extra cash? Well, the reality is that Spotify isn’t profitable because the company’s CEO, Daniel Ek, doesn’t yet want it to be profitable.

“The question of when we’ll be profitable actually feels irrelevant,” he said just last year. “Our focus is all on growth. That is priority one, two, three, four and five.” (Consider it “The Amazon Approach”: Undercut everybody and become a near-monopolistic behemoth that the competition just can’t touch. Then start worrying about profit.)

With a few minor tweaks, the company could easily pay out higher rates or even become profitable quite soon. They’d just have to give up their goal of growing to a market-dominating size as swiftly as possible. There is a legitimate question as to whether some artists have a slightly better deal with their labels or with Spotify than others do. (People who have exceptionally great contracts usually don’t like to discuss the details too openly. Such is the nature of leverage.)

But with that aside, the fundamentals of Spotify’s business model aren’t that cryptic at all: Basically, the pay-per-stream is calculated as a percentage of gross revenues, divided by the total number of plays across the service. (This is done separately for the ad-supported and premium streams.) Spotify actually claims to pay out 70% of gross revenue, which is right on par with iTunes. So the problem isn’t so much the split – rather it’s the company’s income, when compared with the total number of streams. Fixing this simple problem would require either raising income or lowering the number of steams. To do this, Spotify’s options are:

A) Put caps on how much listeners can stream,
B) Raise subscription fees,
C) Increase advertising rates or the frequency of ads,
D) Eliminate or restrict the ad-supported model,
or E) Some combination thereof.

That’s pretty much it. If they were smart, Spotify could get creative with these fundamental options. Back in 2012, I suggested that they let artists cap listening on their albums after a certain number of plays. Then, they could allow listeners to “unlock” unlimited listening of an album by “tipping” the artist, say $5. Not only would this be an immediate source of revenue and a way for fans to directly support their favorite artists, but it would also significantly lower the number of streams in the pool, raising pay rates across the entire service! If Spotify doesn’t adopt creative ideas like these, some other company will, and not too long from now, and they’ll be the ones to attract all of the best artists

http://www.sonicscoop.com/2013/07/3...t-pay-now-and-how-much-should-artists-demand/

 

[JasonSJackson]

yea youre right, showing proof is overrated

 

[CrimsonTider]

profit is very much overrated and that is why its taxed by the gov because from a society perspective profit is inefficient

 

[SpacelySprockets]

Grooveshark>everything

 

[really]

Youtube didn't have any income stream for YEARS.... no ads no nothing....


Now once they suck everybody in the world in, MONOPOLIZE the entire market, make it IMPOSSIBLE for any competition to survive, their is ads all over the place... where you gonna go, break.com?



Youtube's first year of profit = 2010... and now they are making billions per year.

 

[Carl Spackler]

The double negative in the title of this thread tells me all I should know