Spotify – Where’s the money?
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.