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How Spotify Can Become Profitable
journovampire writes: Spotify just posted another big net loss, but it can become profitable with some specific changes according to one analyst. He suggests the following three options: Cut royalty costs to the music industry, freeze expenditure year-on-year, and what seems like the least likely option, somehow make free users pay $1 every three months. He points out: "if Spotify’s current free user base just paid €1/£1/$1 every three months, it would be a profitable company."
If investors have been dumb enough to prop up the company for this long without seeing any sort of profit (and instead, big fat losses) why should I be worried about whether or not it can turn the tables? The worst that can happen is the service gradually winding down before the name is sold off to some other schlubs who will either:
A - repeat the mistake and run their own version of it at a loss
B - change some shit and run their own, slightly worse (for users) version of it at a mild profit
C - change a lot of shit and kill it in the same way Napster was killed
D - sit on it and do nothing
In A and B, users win.
In C and D, users lose until a new copycat (or 5) come along and get the same idiot investors to buy in and keep it running for free (to users) and at a loss (to investors) for years to come.
you know, you're right, but I think it's for the best. Spotify's current approach is unsustainable, not only for themselves but also for musicians, labels, and the music industry. we all shake our fists at music labels, but I for one want a thriving industry where musicians and labels make money so they're incentivized to make more music.