Spotify – Where’s the money?

You’ve been living under a rock somewhere, then no doubt you will have discovered Spotify.  I came across it a few months back and since then I find that I rarely bother with iTunes anymore.

Spotify seems almost too good to be true – thousands and thousands of free music tracks! Or is it?

I’ve just finished reading an excellent article on El Reg, “The Great Spotify Mystery”.  Here’s some of the highlights:

• Major labels own 30%+ of Spotify through equity investments. Most of that money is simply being recycled in royalties.
• Spotify’s business model basically consists for selling user data and listening stats back to the record companies.
• Most users are 30-50 year olds, and are using it for rediscovering music.
• 35% of playlists are whole albums
• Spotify has spent a total of £5000 on marketing

It seems to me that Spotify represents the the last gasps for air by the old Majors Labels as they drown in an ocean of free music.