![]() Milking the streaming services for all they’re worth while they’re still flush with funding is the only sensible way of going about it. I hope that last bit, at least, is not in dispute. Not only is it always going to pay peanuts – it operates on the basis of a reverse health-club model, as it were (the punter always pays less than they would have if they paid by unit, or they have no incentive to subscribe in the first place) – it undermines other forms of monetizing recordings. ![]() There is actually no wisdom in letting streaming services grow before turning the screw – the business model is even worse for the music industry than for the services themselves. Obviously, they’re not going to do so, because turning a profit comes a distant second to cashing big, fat checks out of a liquidity event – and growing fat grows the valuation, sadly. Seriously, though, Spotify could become profitable overnight if they trimmed the fat. I’d say that the main reason so many investors are staying away from this space is that the business model is crap. Here are the two of the critical filings: first Aspiro, then Tidal US. Most impressive is that roughly half of those subscribers are paying approximately $20 per month for higher-end fidelity packages, also according to the company. Those royalty obligations appear to be crippling Tidal during its early stages, though the company has been able to attract a respectable 4.2 million subscribers (at least at last count). Shifting back to the umbrella, Aspiro AB filing, it looks like major labels Universal Music Group, Sony Music Entertainment, and Warner Music Group are draining Tidal of nearly 300 million Swedish kronor, or roughly three-quarters of all revenue. If you’re getting confused, please join the club. That suggests that a healthy subset of the losses are coming from the US battleground, where competition against incumbents like Spotify and Apple Music is especially fierce.ĭigital Music News also found a third document, simply attributed to ‘Tidal International,’ which points to far smaller net losses in the 4 million Swedish kronor range. Separately, a number of indie labels and artists have been complaining to Digital Music News of delinquent payments.Ī separate, second document, specifically for ‘Tidal US,’ outlines net losses of 130 million Swedish kronor, or $15.2 million.
0 Comments
Leave a Reply. |