Monday, April 2, 2018

The Business of Streaming Music

Keith Nelson Jr. (via Dan Masters):

There’s just one problem: All of the biggest streaming services are losing money.

The biggest reason for these massive losses are the large amounts of money in licensing fees those services have to pay to rights holders, primarily record labels, in order to stream copyrighted songs. Spotify has spent nearly $10 billion in licensing since 2006, while concurrently incurring $2.9 billion in losses over the same time period.


[Elizabeth Moody of Pandora]: “What we have done, and we’re continuing to do, is take the artist into the studio, in a nice, smaller setting, and record some of those performances live. In live recordings that we work on with them, we’ll have a period of time where we’ve got exclusive rights to those unique recordings. So, what we’ve done that way, as opposed to try and take an exclusive right on the album recording, we’ll have a unique sound recording that we create with the artist at that event, and that’s where our exclusive rights come into play.”

Update (2018-05-01): Erin Griffith:

A new study by internet radio service Pandora shows that too many ads can motivate users to pay for an ad-free version, but push many more to listen less or abandon the service. The study found that the additional subscription revenue does not make up for the lost ad revenue from those who listen less or leave the service.

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