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With respect to accounting, you don't recoup your investment (where you purchased part of a company) by collecting licensing fees (which you'd have received any
by delinka 10y ago
With respect to accounting, you don't recoup your investment (where you purchased part of a company) by collecting licensing fees (which you'd have received anyway) from the same company.
- bogomipz 10y agoSure, I didn't mean in any kind of GAAP sense, just that the investment has already borne fruit is all.
- delinka 10y agoBut it hasn't. Until they sell. They didn't need to make the investment to get those licensing fees.
- bogomipz 10y agoTheir actual financial investment in the company was likely nominal if anything at all. Spotify likely offered an ownership stake as an incentive to get the labels to take a chance on an unknown company and an unproven model. Whether Spotify goes public or not the labels have already made out very handsomely was my point. That's the $5 billion that Spotify often states that it has paid out to rights holders. So yes it very much has borne fruit, $5 billion worth. If the company goes public its basically gravy for them. The record labels were decimated back in 2006/2007 when Spotify started. Things looked pretty bleak for the industry as a whole. So yes the labels needed to do something as their revenues has pretty much dried up comparatively to a decade earlier.