The music selling and radio business is increasingly being commoditized. Profits are being squeezed to the point of unsustainability. This spells pending doom for imeem, Pandora, Myspace Music, Slacker and the newest entrant Spotify unless there is an industry-upheaving royalty rate change.
After analyzing both the massively hyped Spotify and the under Best Buy rebooted Napster he mentions that most similar sites, such as Pandora and MySpace Music, so far have failed in making a paid subscription model a viable solution. Music streaming services world wide are living a hard time and UK-based, but CBS owned Last.fm also switched to a compulsory subscription for users outside of the US, UK and Germany because so far they have failed to monetize ads sufficiently in other pats of world.
These may seem dire times, but unless streaming platforms can become more global, it seems that they will struggle to sell ANY real advertising at all and if, the question is will it be sufficient to pay royalties and the rather high wages developers benefit in startups.
Read the complete TC entry here.
Originally posted on August 8, 2009 @ 1:14 pm