I don't think that's fair. These 2 companies have done more for music and promotion of music than anyone in the modern age - from an industry renown for collusion between the four majors (one falls into line and they all do etc). They have basically rescued a dying industry that essentially built its modern day business model on litigating everyone through RIAA and so on. That's not innovative - that's stupid and idiotic.
Instead, what you have now is two companies who are trying to save a dying industry through subscription and the music industry trying to milk every single penny out of them. The dichotomy that creates is that these companies aren't sustainable long term - they are hemorrhaging cash re-the article:
Spotify’s accounts for the last year, recently filed in Luxembourg, show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million ... On top of that it had more than $30 million in salaries, and more than $30 million for various other expenses. That is how you lose $57 million on $236 million in revenue.
That's just sad. The only incentive these companies have is to be ultimately purchased by the recording industry who can then dictate pricing on their own terms - and that's bad for everyone because then they are going to push prices up insanely. In fact, if these were purchased by the recording industry - it might be the worst thing to happen to music because we are all again at the mercy of the industry. They will want to maximise pricing and I believe, given their history, they will maximize anti-competitive behavior by essentially price fixing competing services out the market. By staying out the USA for 2 years, it was evident Spotify pushed (to some degree) the music studios to capitulate on their pricing - they both gave a little because the industry was desperate for cash. It's obvious to anyone that's the only reason Spotify weren't in the USA sooner - it wasn't economically feasible because the model was already proven to be a hit in Europe.
I don't, for one second, believe that the Music studio's are paying this out to the artists. They are dumping this straight into the bank - the industry in that regard is now basically running on live shows and tshirts for artists to survive. So don't be so quick to judge "giving away for free" - because thats not what they are doing. They have produced amazing services in my mind - and there should be some reward for that by the industry in recognizing and enabling them to create sustainable businesses.
Not to mention that Spotify and Pandora are making it possible for young, poor people to be active music consumers without turning to piracy. When I was in high school, my options were to pay $15 an album, and thus only have access and exposure to a tiny music collection, or pirate music, hear a lot of great music, especially from smaller artists, and drag my friends to their concerts every time they were in town.
Now I'm in college and still broke, but I pony up the $10/month for Spotify, and I continually encourage my friends to do so as well. They've created an experience that's dramatically better than piracy (even with nice private trackers), pays out at least some to the artists along with the moneypile that goes to the labels, and enfranchises people like me. I've always listened to an extremely wide selection of music, and now that I can pay to do it, I'm very happy to.
And I still drag my friends to every good concert in town.
Exactly, I'm proud to pay my Spotify membership and I feel I get my money's worth... I'd probably pay more. I have now gone over 2 years without torrenting a single album (the exception being one quite-large Canadian band who happened to not be on Spotify at the time ... I'd already bought the album on vinyl so I didn't feel to bad about it).
Before Spotify my best effort at trying to be legal was to splash out every couple of months on some vinyl copies (nice to own... I still do this sometimes) of albums I'd already stolen via bittorent.
Spotify, is a music-lover's dream and it's how music distribution should work.
Instead, what you have now is two companies who are trying to save a dying industry through subscription and the music industry trying to milk every single penny out of them. The dichotomy that creates is that these companies aren't sustainable long term - they are hemorrhaging cash re-the article:
Spotify’s accounts for the last year, recently filed in Luxembourg, show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million ... On top of that it had more than $30 million in salaries, and more than $30 million for various other expenses. That is how you lose $57 million on $236 million in revenue.
That's just sad. The only incentive these companies have is to be ultimately purchased by the recording industry who can then dictate pricing on their own terms - and that's bad for everyone because then they are going to push prices up insanely. In fact, if these were purchased by the recording industry - it might be the worst thing to happen to music because we are all again at the mercy of the industry. They will want to maximise pricing and I believe, given their history, they will maximize anti-competitive behavior by essentially price fixing competing services out the market. By staying out the USA for 2 years, it was evident Spotify pushed (to some degree) the music studios to capitulate on their pricing - they both gave a little because the industry was desperate for cash. It's obvious to anyone that's the only reason Spotify weren't in the USA sooner - it wasn't economically feasible because the model was already proven to be a hit in Europe.
I don't, for one second, believe that the Music studio's are paying this out to the artists. They are dumping this straight into the bank - the industry in that regard is now basically running on live shows and tshirts for artists to survive. So don't be so quick to judge "giving away for free" - because thats not what they are doing. They have produced amazing services in my mind - and there should be some reward for that by the industry in recognizing and enabling them to create sustainable businesses.