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This is definitely a case of good luck luck with that whole profit making idea given that Spotify is having to deal with some recently leaked secret demands from the record labels. It’s not bad enough that the record labels are doing everything that they can to destroy music streaming sites like Spotify with exorbitant fees but some of the things being held to the company’s throat are insane.
In a post at GigaOM web veteran Michael Robertson, CEO Founder of MP3tunes, outlines 8 of the secret demands that Spotify had to acquiesce to in order to stream the music that they do. Here is a few of those points:
- General deal structure: Pay the largest of A) Pro-rata share of minimum of $X per subscriber, B) Per-play costs at $Y per play, C) Z percent of total company revenue, regardless of other business areas.
- Labels receive equity stake.
- Up front (and/or minimum) payments.
- Detailed reporting, including monthly play counts.
- Non-disclosure.
Personally I don’t use streaming services like Spotify, even though in Canada I can’t get that specific service, because the amount of money that a musician actually makes from streaming services is fractions of a penny. I much rather actually buy the MP3’s of my favorite artists, that way I know they are at least making some money.
