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Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a doll
by nixy 15y ago
Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a dollar. Thus, there's no room for profit in companies like Spotify.
- dmk23 15y agoThat is exactly their problem. Spotify owns neither the customer nor digital contents. They can play their "music discovery arbitrage" game till it grows big enough that their partners have enough incentive to step in and take over their business. No different than what happened to Facebook app makers. Even Zynga's profit outlook is questionable as it is crystal clear from their latest filing... Spotify's best bet is to sell themselves at the peak. But they are pretty expensive already.
- Happer 15y agoI don't think Spotify can easily sell themselves. It would immediately void all their current licensing agreements.
- blake8086 15y agoYou are describing the classic example of a parasite that is so virulent it kills its host. A more pragmatic music label will charge as much in license fees as they possibly can without killing Spotify.