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I was in the original beta-trials of Spotify (started second half of 2007), and the info then seemed to indicate that the intended model was ad-financed. A lot

by mzl 16y ago

I was in the original beta-trials of Spotify (started second half of 2007), and the info then seemed to indicate that the intended model was ad-financed. A lot of people apparently asked about paying to get rid of the ads. As for smaller artists, compare it with the situation in commercial radio. A few radio-plays will not get you very much money, but the number of people that listened to your song is actually quite high.

Tycho 16y ago
Comparing it to radio is where the trouble starts. A potential customer cannot rely upon radio to access your music/product. At best they'll hear a few of the artist's tracks, if they're patient and lucky. Therefore the radio is in no way a substitute for owning the LP, it's more like an advert/complement than a competing service. But Spotify DOES let the potential customer access your product in full, removing the main incentive to buy your LP. Furthermore, you're not only competing with a free version of your own product, your competing with a vast catalog of other music, millions of records that can be accessed effortlessly. "Should I spend £10 on this one album, or should I spend £10 for a month of unlimited access to endless high-quality music?" The economic position this puts individual artists in is dire. Also, another thing about the ads is sometimes they're hardly ads at all, they're just Spotify announcements. I can't believe they'd be wasting spots like that if they were really pulling in serious advertising money.