Spotify music4/29/2023 (Streaming companies pay out over 70 percent of their revenue to various rights holders, and last year those payouts accounted for almost two-thirds of recording industry revenues in the U.S.)įrom the outside, it looks like Spotify and the labels have settled their differences at the negotiating table, but underneath the two sides are still pointing guns at one another (though the safeties are now on). The Recording Industry Association of America still terms this recovery "fragile," but acknowledges that streaming is the only path forward. Spotify's playlist content is determined by a staff of editorial tastemakers, in combination with a suite of proprietary machine-learning algorithms, an approach to song selection that Spotify execs describe with the gruesome neologism " algotorial." With the aid of these playlists, the music industry has recovered a bit over the past two years - it's now the same size it was in 2008, when Spotify first débuted. "Hell, you've become a gatekeeper! You might not think you have, but you have." "Look we talk about gatekeepers, and he's saying 'I wanna smash the gatekeepers' - but now, 35 percent of all streamed music is directly from their playlist," Portishead's Geoff Barrow, one of the few artists still willing to criticize Spotify, says. In correspondence with investors, he employs the sort of emancipatory Internet rhetoric that mostly went out of fashion a decade ago, claiming Spotify's ultimate goals are to "democratize the industry" and "empower artists to break through." In truth, the path to fame hasn't changed much. The Record Spotify Cops To Its Problems And Reveals The Massive Ambitions Of Its FounderĮk is soft-spoken, modest and polite, but he's also a 35-year old genius billionaire, whose shaved head and otherworldly affect can make him seem like the creation of a screenwriter. Compare Ek's holdings to the size of whole companies within music: Vivendi, the French parent company of the world's largest record label, is worth around $27 billion - and is also diversified into European film and television production and distribution Live Nation, which is so pervasive and dominant in the touring industry that the Department of Justice is reportedly investigating it, is worth around $8 billion Tencent Music, China's dominant streaming platform, is estimated to be worth $12.5 billion. And Daniel Ek, its co-founder and CEO, now owns shares worth at least $4 billion (including warrants and options), making him the richest man in the history of music. Despite its pre-eminence, Spotify still hasn't made any money, but it does have 71 million paying subscribers - and the most valuable agglomeration of listener data in the business. The founders of the Pirate Bay have all been sent to prison, and, for a new generation of listeners, BitTorrent technology is likely as unfamiliar as the fax machine. Ten years later and paid iTunes downloads are shrinking by 25 percent a year. Spotify, trying to exploit an exhausted niche between the pirates and the iPod, seemed a long bet. Steve Jobs had called the streaming business model "bankrupt," and Apple was instead promoting the sale of downloadable MP3 files from the iTunes Store. Headquartered in Sweden, a country whose recording industry had shrunk to a third of its previous size due to piracy, the company was located far from the Silicon Valley sphere of influence. The question now is: Where to?įollowing its successful public listing yesterday, the music streaming service Spotify is now worth around $25 billion, making it the largest music company in the world - but when Spotify first débuted, back in 2008, it was reasonable to think it would fail. The Spotify banner hangs from the New York Stock Exchange on the morning that the music streaming service begins trading shares, on Apin New York City.
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