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Your people in the know are wrong. The labels own a very small part of e.g. Spotify - around 5% - and the rest is VC and the founders. Deezer's IPO documents we

Your people in the know are wrong. The labels own a very small part of e.g. Spotify - around 5% - and the rest is VC and the founders. Deezer's IPO documents were clear on where the ownership of that service lies.

bsimpson 11y ago
Sadly the edit window has passed for that comment. Apologies for spreading old/erroneous information.
- wodenokoto 11y ago
  I read it more like, because the music startups are so dependent on the licenses they are practically owned by the music industry ( though not technically) which I thought was kinda insightful. But I guess you meant litterally.
davidu 11y ago
But royalty payments are far more than 5%.
qq66 11y ago
It's not that the labels own Spotify -- it's that by issuing limited-term licensing deals, and owning all of the music, they'll be able to charge whatever they want for their music, leaving just a little bit on the table to keep Spotify in business. Spotify reports $100m in profit? Just raise licensing fees by $90m at the next contract. Spotify won't have the leverage to walk away. Similar to Netflix, Spotify will need to create some reason for consumers to stay with Spotify, likely with some kind of music or music experience that is Spotify-exclusive like Netflix-exclusive TV shows. Also, Spotify has invested a lot of effort into its curated playlists -- this is an attempt to get people to listen to Spotify the way they watch Netflix -- fire it up and watch/listen to "whatever's on," instead of searching Taylor Swift and getting angry when they can't find it.
- austenallred 11y ago
  For every $1,000 in music sold the artist gets average musician gets $23.40 https://www.techdirt.com/articles/20100712/23482610186.shtml https://www.techdirt.com/articles/20100712/23482610186.shtml
  - pyre 11y ago
    This doesn't mean that the studios are leaving a big cut to Spotify, it just means that the artists aren't getting much.
    - austenallred 11y ago
      The article explains that Spotify's cut would be tiny.

bsimpson 11y ago

Sadly the edit window has passed for that comment. Apologies for spreading old/erroneous information.

wodenokoto 11y ago
I read it more like, because the music startups are so dependent on the licenses they are practically owned by the music industry ( though not technically) which I thought was kinda insightful. But I guess you meant litterally.

davidu 11y ago

But royalty payments are far more than 5%.

qq66 11y ago

It's not that the labels own Spotify -- it's that by issuing limited-term licensing deals, and owning all of the music, they'll be able to charge whatever they want for their music, leaving just a little bit on the table to keep Spotify in business. Spotify reports $100m in profit? Just raise licensing fees by $90m at the next contract. Spotify won't have the leverage to walk away. Similar to Netflix, Spotify will need to create some reason for consumers to stay with Spotify, likely with some kind of music or music experience that is Spotify-exclusive like Netflix-exclusive TV shows. Also, Spotify has invested a lot of effort into its curated playlists -- this is an attempt to get people to listen to Spotify the way they watch Netflix -- fire it up and watch/listen to "whatever's on," instead of searching Taylor Swift and getting angry when they can't find it.

austenallred 11y ago
For every $1,000 in music sold the artist gets average musician gets $23.40 https://www.techdirt.com/articles/20100712/23482610186.shtml https://www.techdirt.com/articles/20100712/23482610186.shtml
- pyre 11y ago
  This doesn't mean that the studios are leaving a big cut to Spotify, it just means that the artists aren't getting much.
  - austenallred 11y ago
    The article explains that Spotify's cut would be tiny.