Originally posted on MUSIC • TECHNOLOGY • POLICY:
Greg Sandoval is one of the great reporters on tech and music. While I don’t always agree with him, I think he’s fair and one thing I know for sure–he is old school when it comes to getting facts and sources right. So when Sandoval says Spotify is going back to the well to drive down artist royalties even further, you better believe that I believe him.
According to his story at the Verge:
About 70 percent of Spotify’s revenues pays music-licensing fees while another 20 percent covers customer acquisition, these sources said. That leaves 10 percent to pay all of the company’s other costs, including its much praised technology platform. Insiders have told The Verge that this cost structure zeroes out Spotify’s profits.