“Virtually every new dollar of revenue went directly to music companies as royalty payments, evidencing the fact that the more members Spotify adds, the more money the company loses. In almost a one-for-one scenario, every dollar Spotify is generating immediately exits the company due to licensing fees.”
This predatory relationship has to stop if the record companies want to exist at all in the future. I don't think they realize that they're pointing the gun at their own foot.
Their goal is to stripmine music startups as a revenue strategy. They'd rather have the companies there as an alternative to piracy, but they don't want them to have any power at all, so they string them along and siphon as much investment as they can.
I don't think the parent was claiming that Spotify would necessarily outlive the record labels, but rather some new paradigm for music recording/distribution would disrupt the label's current stranglehold.
“Virtually every new dollar of revenue went directly to music companies as royalty payments, evidencing the fact that the more members Spotify adds, the more money the company loses. In almost a one-for-one scenario, every dollar Spotify is generating immediately exits the company due to licensing fees.”
This predatory relationship has to stop if the record companies want to exist at all in the future. I don't think they realize that they're pointing the gun at their own foot.